ABSTRACT
The era of contemporary theoretical economics was ushered in during the period George L.S.Shackle has so eloquently called ‘the years of high theory.’ Writing in the mid-1960s, and looking back, he tells us that ‘there began in the mid-1920’s an immense creative spasm which completely altered the orientation and character of economics.’1 The most substantial among the major innovations of theoretical economics was J.M.Keynes’s General Theory, which was clearly intended to reflect Keynes’s rejection of the critical ‘second postulate’ of neoclassical theory with its implicit conclusion that labor markets tend to achieve full employment equilibrium. When Keynes wrote to George Bernard Shaw that he expected his General Theory of Employment, Interest and Money to change the way people think about economics he was, in effect, expressing the view that his work would lay the foundation for a new paradigm in the discipline. To qualify as a paradigm, a particular scientific achievement must attract an enduring group of adherents away from competing modes of scientific activity.2 It must also be sufficiently openended to leave all sorts of problems for the redefined group of practitioners to resolve. There are many examples of paradigmatic breakthroughs in the natural sciences. The works of Ptolemy, Newton, and Lavoisier brought about whole new modes of thought in their respective fields of astronomy, physics, and chemistry.
