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Imagination, Expectations, and Economic Calculation in an Open-ended Process

Summary:
GLS Shackle famously argued that while the future was unknowable, it was not unimaginable.  Shackle's great strength as a thinker was to get his reader to take seriously the agony of choice in an uncertain world.  However, Lachmann's notion of institutions as nodes of orientation, and Mises's idea of the necessity of a particular institution -- private property in the means of production -- for individual decision makers to be able to use the tools available to them to make rational economic calculation of alternative investment paths.  The decision to Mises, I want to stress, is never trivial, it always entails both agony of choice, and a bold venture into the unknown.  But the actor within a private property market economy is now cast upon that voyage without "aids to the human

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GLS Shackle famously argued that while the future was unknowable, it was not unimaginable.  Shackle's great strength as a thinker was to get his reader to take seriously the agony of choice in an uncertain world.  However, Lachmann's notion of institutions as nodes of orientation, and Mises's idea of the necessity of a particular institution -- private property in the means of production -- for individual decision makers to be able to use the tools available to them to make rational economic calculation of alternative investment paths.  The decision to Mises, I want to stress, is never trivial, it always entails both agony of choice, and a bold venture into the unknown.  But the actor within a private property market economy is now cast upon that voyage without "aids to the human mind" that enable to them to pierce through the dark fog of time and ignorance and the system possess processes of coordination that sort from the imagined desirable to the reality constrained feasible to the economically viable.  It all does begin with imagination, but our imaginations are not unchecked. 

This is worth listening to from roughly a year ago.

Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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