Taking uncertainty seriously, either by accepting the non-ergodicity of economic decisions or that probabilities, however arrived at, come with a potentially very low “weight”, can lead to a number of attitudes and reactions. The aim of the post-Keynesian school is to take such an issue seriously, but we are going to start first with what has been the standard reaction in mainstream theory. As very often is the case, the post-Keynesian stance turns out to be critical or antagonistic to that position for its own independent reasons.

Nihilism, “as if” assumptions and the “epistemic interval”

One approach to irreducible uncertainty is what has been described as “nihilistic”, which is a despairing attitude whereby nothing of any scientific rigour can be said about how an economic agent comes to operate. This is the position taken by Robert Lucas, according to whom, in “situations of risk, the hypothesis of rational behavior on the part of the agents will have usable content”, whereas in the case of “uncertainty economic reasoning will be of no value” (Lucas 1981: 224).

To an extent, that is the position effectively also taken by George Shackle (1955). The stark terms in which Keynes puts it (“[W] e simply do not know”: Keynes 1937a: 214) seem to invite such an attitude.

Others “call into question the idea that there is anything peculiarly subversive in the analytical consequences of broaching problems of uncertainty in economic decision making … that as an analytical issue it is … either innocuous or else quite indiscriminately destructive” (Coddington 1982: 480). In other words, such stark terms may even not matter much, in the end.

Another characterization of this attitude, without agreeing to it, is given by Tony Lawson when he seeks “to assess the claim, frequently made, that acknowledging the fact of future uncertainty leads necessarily to subjectivism and ‘irrational’ behaviour” (Lawson 1985: 915).

Therefore, there is no denying that a nihilistic reaction to the existence of fundamental uncertainty is possible and understandable. The issue, however, is that it is, equally understandably, unlikely that the entire field of economics would meekly resign itself to such a despairing silence.