Abstract
Thirty years ago, Jim Buchanan elucidated and developed the subjective nature of opportunity cost and its relation to choice. Ten years later, Jack Wiseman and I were hoping to write a textbook embodying a thorough-going subjectivist approach. Jim kindly offered to host our work at the Center for Public Choice, VPI, in Blacksburg in the summer of 1980. This was an invaluable opportunity: Jim’s own understanding of and sympathy for the approach and his openness to discussion, as well as the active intellectual milieu and unfettered working conditions at the Center, made this an ideal environment. No matter how early we arrived in the office there would be a typed note from Jim on our desks, reflecting his even earlier morning thoughts on the discussions of the previous day.
I am grateful to Lawrence White for helpful comments on this paper; and to Ms. Kathleen Cann, Manuscripts Department, Cambridge University Library and Mr. Adrian R Allan, University Archivist, and his colleagues at Sydney Jones Library, Liverpool University, for assistance in accessing the material referred to below.
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References
J. WisemanAnd S. C. Littlechild: “Crusoe’s Kingdom: Cost, Choice and Political Economy”, Chapter 7, in: Stephen F. Frowen (Ed.): Unknowledge and Choice in Economics,Basingstoke (Macmillan Press Ltd.) 1990, pp. 96–128.
James M. Buchanan: Cost and Choice: An Inquiry in Economic Theory,Chicago (Markham Publishing Company) 1969.
Stephen C. Littlechild: “Disreputable Adventures: The Shackle Papers at Cambridge”, Chapter 14, in: Peter Earl And Stephen Frowen (Eds.): Economics as an Art of Thought: Essays in Memory of G.L.S. Shackle,London and New York (Routledge), 2000 (forthcoming). Letters to and from Shackle cited in this paper are generally to be found in this collection, at Add. MS 7669 in Cambridge University Library. Miss Kathleen Cann has prepared a helpful guide to the collection, reprinted in the above volume.
James M. Buchanan: “Introduction: L.S.E. cost theory in retrospect”, Chapter 1 in: James M Buchanan And G.F. Thirlby (Eds.): L.S.E. Essays on Cost,London School of Economics and Political Science (Weidenfeld and Nicolson) 1973, pp. 316; quotation at fn. 5 p. 12.
RichardEbeling: “On the Theory of Costs”, Austrian Economics Newsletter,vol. 1, No. 1 (Autumn 1977). Reprinted in Stephen C. Littlechild (Ed.): Austrian Economics,3 volumes, Aldershot (Edward Elgar) 1990 (paper in vol. 1, pp. 253–4).
Lawrence H. White: “Comment on Shackle’s Notion of Opportunity Costs”, Austrian Economics Newletter,vol. 1, no. 2 (Spring 1978), p. 10. Reprinted in Stephen C. Littlechild (Ed.), Austrian Economics,op. cit., vol. 1.
S. C. Littlechild: “Shackle on Cost”, 6. June 1978 (unpublished manuscript, 2 pages), SCL to LHW 12 June 1978, LHW to SCL 12 September 1978, SCL to LHW
G. L. S. Shackle: Expectation, Enterprise and Profit, London (George Allen and Unwin) 1970, p. 146.
SCL to GLSS 3 October 1978. (Unfortunately, I do not seem to have sent Shackle a copy of my note of 6 June 1978, which contained the example from his own writing, but this may also have meant that he was forced to consider the matter anew.
G. L. S. Shackle: “Opportunity-cost and the concept of focus-outcomes”, manuscript dated 22 October 1978 (6 pages). A copy of this manuscript is attached as an annex to the present paper.
You are like a swordsman of superlative skill and intrepidity successfully attacking a dozen simultaneous opponents and exposing their ineptitude. I am sorry you intend some `toning down’. I do hope this glinting blade will be allowed to flash undulled. “ GLSS to LHW 17 February 1979.
G. L. S. Shackle: Epistemics and Economics, Cambridge (Cambridge University Press) 1972, pp. 123, 130. The volume in which Buchanan’s paper appeared was published on 28 June 1973 but his paper was written over the period 7–10 June 1972 and sent to the publisher on 15 June 1972. (I am grateful to Betty Tillman for this information.) The publication date of Shackle’s book is given in the book as 1972, but in fact it was not published until 1 February 1973.
G. F. Thirlby: “The economist’s description of business behaviour”, Economica,(May 1952), at footnote 24 (reprinted in LSE Essays on Cost).
G. L. S. Shackle: Decision, Order and Time, p. 156, as quoted by White to Shackle, 16 January 1979.
Shackle’s friend Professor (now Sir) Charles Carter has made cogent arguments along these lines. See for example his papers “On Degrees Shackle: or, the Making of Business Decisions”, in: C. F. Carter And J. L. Ford (Eds.): Uncertainty and Expectation in Economics, Oxford (Basil Blackwell) 1972, pp. 30–42, and “George Shackle and uncertainty: a revolution still awaited”, Review of Political Economy, Vol. 6, No. 2 (April 1993 ), pp. 127–37.
James M. Buchanan: “The Domain of Subjective Economics: Between Predictive Science and Moral Philosophy”, Chapter 2 in: Israel M. Kirzner (Ed.): Method, Process, and Austrian Economics: Essays in Honour of Ludwig von Mises,Lexington, Massachusetts and Toronto (Lexington Books, D. C. Heath and Company) 1982, pp. 7–20, at pp. 17–18.
James M. Buchanan: Fiscal Theory and Political Economy: Selected Essays,The University of North Carolina Press, Chapel Hill (Oxford University Press) 1960. Reviewed in Economica,vol. 30, no. 120 (November 1963), pp. 420–422.
Shackle Papers in the Department of Special Collections and Archives, Sydney Jones Library at Liverpool University, reference LXIII 19.
GLSS to JMB 8. July 1981. It is satisfying to record that Buchanan reciprocated the testimony. In replying to an invitation to participate in a conference in Shackle’s honour, he wrote, “Shackle is one of the most underrated persons in economics, and someone who richly deserves all honours.” (JMB to Dr. S. F. Frowen 4 May 1983 )
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Littlechild, S.C. (2002). Buchanan and Shackle on Cost, Choice and Subjective Economics. In: Brennan, G., Kliemt, H., Tollison, R.D. (eds) Method and Morals in Constitutional Economics. Studies in Economic Ethics and Philosophy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04810-8_7
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