ABSTRACT
Economics is a human and a social science, a study of both individual actions and the behaviour of complex systems; as taught to students, the key concept in the former is optimization and in the latter equilibrium. Although in principle the theoretical procedure purports to explain system behaviour as the result of individual choice, in practice choice within standard models can be explained only in an equilibrium setting, by endowing choosers with expectations about the configuration of the system which will ensure that their ex ante choices will turn out ex post to be rational. The equilibrium which is deduced is therefore the product not only, as Shackle insisted, of pre-reconciled choice, but also of pre-reconciled expectations. How these expectations are arrived at is not explained; their formation – and even their epistemic possibility – is outside the system, and outside time. As is most clearly seen in the Arrow-Debreu model, time, space and uncertainty become dimensions of the system, and cannot therefore be characteristics of the decision-making process; this is extremely convenient, because the decision-making processes which appear to be envisaged – contracting in more traditional market models, individual yet interdependent ratiocination in game-theoretic analysis – are unable to accommodate them.
