Subjectivism and Economic Analysis: Essays in memory of Ludwig ...

CARLO ZAPPIAThey both recognise that the question is not so much that ofincorrectly perceived opportunities by individual agents—which isusually dealt with in neoclassical economics—as that of unperceivedopportunities. Still, Kirzner admits that equilibrating actions can beconsistently defined, thus sticking implicitly to a (perhapsgeneralised) constrained optimisation approach in the Robbinsiantradition. As Vaughn contends, ‘he has improved upon a model ofmarket behaviour that still fails to capture the central problem ofhuman action’ (150). In fact, ‘he rejects the notion thatentrepreneurs create anything ex nihilo, instead arguing that bydiscovering opportunities already “there” to be discovered, they areintroducing genuine novelty into the system’ (148). Thus it wouldseem that, from Vaughn’s viewpoint, ‘genuine novelty’ andunperceived opportunities are distinct.In contrast, Lachmann thinks that, if equilibrium is no longer auseful tool, then the notion of equilibrating action is unintelligible.Therefore he argues for an entirely different approach. FollowingShackle, Lachmann maintains that it is the undetermined nature ofthe future that explains why the consequences of creative choice areunpredictable. ‘Genuine novelty’ rests in the fact that ‘no two mindsare alike’ (153), so that neither individual choices nor their outcomecan be fully predicted. As a consequence, economic theory mustdraw on the notion of a plan ‘to make the world intelligible in termsof human action’. But the passage of time accounts for the fact that‘revision of plans is the norm rather than the exception’ (154), thusrendering co-ordination almost unachievable as a state of theeconomy. Lachmann’s suggested solution, Vaughn contends, is thento be sought in the study of those institutions that can favour ordereven in the face of unco-ordinated patterns of behaviour. But, asregards the possibility of having a formal theory of economicdecisions, we are only left with a series of negative statements. InVaughn’s words ‘Lachmann, in an attempt to take radicalsubjectivism and real time seriously in his interpretation ofeconomic action, tries to devise an alternative to equilibriumtheorising but fails to produce the kind of overall theoreticalstructure that would seriously challenge the neoclassical hegemony’(161). In particular, one might add, Lachmann does not provide anydescription of the characteristics of the domain encompassing notonly unperceived but also inconceivable opportunities.The fact that the modelling of individual behaviour is crucial tothe whole of Vaughn’s reassessment of the Austrian tradition isdemonstrated in her attempt to summarise what aspects can be128