Expectation, Enterprise And Profit: The Theory Of The Firm (studies In Economics)

STUDIES IN ECONOMICS J. Wilczynski The Economics of Socialism Margaret Capstick Economics of Agriculture in preparation R. C. Tress The Public Sector and the Private Sector R. J. Ball Macroeconomic Planning Hans Singer and Caroline Miles The Rich and the Poor Countries A. B. Cramp Theory and Practice of Monetary Management I. G. Corina Wages and Earnings Ian Brown Demography and Economics A. P. McAnally Economics of the Distributive Trades F. S. Brooman Money and Financial Institutions K. D. George The Structure of British Industry G. A. Phillips and R. T. Maddock The Economic Development of Britain 1918-1968 A. I. MacBean The Institutions of International Trade R. D. C. Black The History of Economic Thought Charles Kennedy The Distribution of the Product Theo Cooper Economic Aspects of Social Security Gavin McCrone Economic Integration A. J. Brown Regional Economics W. J. L. Ryan Demand D. J. Horwell International Trade Theory STUDIES IN ECONOMICS Edited by Charles Carter Vice-Chancellor, University of Lancaster 1 Expectation, Enterprise and Profit BY THE SAME AUTHOR The Years of High Theory The Nature of Economic Thought A Scheme of Economic Theory Decision, Order & Time in Human Affairs Economics for Pleasure Time in Economics Uncertainty in Economics & Other Reflections Mathematics at the Fireside Expectation in Economics Expectations, Investment & Income Expectation Enterprise and Profit The Theory of the Firm BY G. L. S. SHACKLE London GEORGE ALLEN AND UNWIN LTD RUSKIN HOUSE MUSEUM STREET FIRST PUBLISHED IN 1970 This book is copyright under the Berne Convention. All rights reserved. Apart from any fair dealing for the purpose of private study, research, criticism or review, as permitted under the Copyright Act, 1956, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, electrical, chemical, mechanical, optical, photocopying, recording or otherwise, without the prior permission of the copyright owner. Enquiries should be addressed to the Publishers. © G. L. S. Shackle, 1970 ISBN: 0/04/330160/6 Printed in Great Britain 10 on 11 point Times Roman by Alden & Mowbray Ltd Osney Mead, Oxford To H. M. Boettinger Editor's Note Economics is a large and rapidly developing subject, and needs, as well as elementary works for the beginner, authoritative textbooks on special subjects. This book belongs to a series of such textbooks (more than forty titles are planned): the general level is that of the second or third year in a British university course, but the books are written so as to be intelligible to other readers with a particular interest in the subject concerned. Those who study this book, or others in the series, must not expect to find an exposition of a settled body of Truth, which all economists must accept. Economics is not like that. It is at all times necessary to select, from the immense complexity of the real world, manageable sets of elements to study. This selection will rightly vary with time and place, and new insight will be given by authors who make their choice in a different way. An economics textbook trains students to think, in part by looking at things from an unusual angle. This book by Professor Shackle is an example: it is not the 'standard' textbook discussion of the decisions of firms, but it is all the m