The Review of Austrian Economics, 14:2/3, 181–191, 2001.
2001 Kluwer Academic Publishers. Manufactured in The Netherlands.
Alfred Sch¨utz and George Shackle: Two Views
ROGER KOPPL firstname.lastname@example.org
Department of Economics and Finance, Fairleigh Dickinson University, Madison, New Jersey 07940
Abstract. Within the Austrian school of economics, Ludwig Lachmann identiﬁed Alfred Sch ¨utz and George
Shackle as master “subjectivists.” Subjectivists trace aggregate economic phenomena back to the subjective
thoughts and expectations of individuals. Sch¨utz was a member of the “Mises Circle” of Austrian economists.
Shackle was a student of the Austrian economist F.A. Hayek, but a follower of Hayek’s great rival, John Maynard
Keynes. Austrians respect both ﬁgures as important subjectivists who offered valuable accounts of the role of
uncertainty in human action. The paper serves two purposes. First, it is a useful primer on the distinct theories
of Schuts and Shackle. Second, it draws attention to the problem of change and novelty in the work of Sch¨utz
and Shackle. Sch¨utz underemphasized the role of novelty in society. Shackle, by contrast, exaggerated the role of
novelty in choice. A middle ground position is defended.
JEL Classiﬁcation: D8, B4, B5
The sun is new every day
Each day the sun rises in the east, crosses the sky, and sets in the west. This cycle is a
paradigm of regularity. And it is a paradigm of acting man’s knowledge. The knowledge
of the philosopher, the scientist, or the mystic may depend less on regularity than on other
things, but the everyday knowledge of acting man depends ﬁrst on regularity.
But time marches on and with time comes change. Every choice situation presents acting
man with something new. His knowledge is incomplete. All things bear the aspect of novelty.
How does this ignorance affect acting man?
Two answers suggest themselves, both denials. We may deny either the reality of change
or the reliability of knowledge. G. L. S. Shackle gives the second answer. We “cannot
claim knowledge so long as we acknowledge Novelty” (1972:26). In at least some of his
For comments on an earlier draft, I thank Nicolai Juul Foss. An earlier version of this paper was written as a
term paper for a class in methodology taught in 1982 by Fritz Machlup, whose comments are also gratefully
acknowledged. At the time I was writing this paper, O’Driscoll and Rizzo were writing their book (1985) whose
inﬂuence will be obvious to those familiar with it. Since the paper was written, interest in Sch¨utz among economists
has increased. A few people, especially Mie Augier and Peter Boettke, have encouraged me to publish it even
these many years later. I thank them for their encouragement.