In his reply to my critical book review, ?Don't Shoot the Messenger: Caldwell's Hayek and the Insularity of the Austrian Project,? Bruce Caldwell criticizes my account of Carl Menger's ?imaginary goods,? and rejects the line of reasoning I advanced in drawing Keynesian conclusions from Hayekian premises. But Caldwell's proposed methodology for assessing the significance of ?imaginary goods? in advanced market economies is ill conceived; and my pathway from Hayek to Keynes merely pursues a thoroughgoing subjectivism to its inexorable conclusion, which (...) is not, as Caldwell suggests, countercyclical fiscal policy. (shrink)

G.L.S. Shackle stood at the historic crossroads where the economics of Hayek and Keynes met. Shackle fused these opposing lines of thought in a macroeconomic theory that draws Keynesian conclusions from Austrian premises. In Shackle 's scheme of thought, the power to imagine alternative courses of action releases decision makers from the web of predictable causation. But the spontaneous and unpredictable choices that originate in the subjective and disparate orientations of individual agents deny us the possibility of rational expectations, and (...) therewith the logical coherence of market equilibrium over time. (shrink)