Quotes from The Economics of Time and Ignorance

By Gerald O'Driscoll & Mario Rizzo (1985)

• There is a “sponginess” to neoclassical economics that enables it to absorb divergent elements around it without ever emphasizing their main points. These fringe ideas become footnotes to which theorists can refer as evidence that they have taken the ideas into account.#
  Methodology
• While it may not be appealing to assume that individuals make errors that they themselves could have predicted (ex ante error), it is not obviously wrong to suppose that others could have predicted the errors of the first group. Any act of entrepreneurship or speculation involves trying to outguess the market, to do better than the crowd or the median asset-holder. Entrepreneurs and speculators are constantly taking actions that assume that most people make “predictable” errors (predictable by entrepreneurs).#
  MethodologyExpectations
• Data on forecasts that were correct, ex post, tell us little about the optimality or rationality of these forecasts.#
  Expectations
• The mutual determination of prices is a characteristic of general equilibrium, not a method of attaining that equilibrium.#
  Methodology
• The marginal utility of money depends on its exchange value, the reverse of the ordinary relationship for goods.#
  Money
• Any attempt to impute economic meaning to the period of time between the objectively defined original factors and the resulting consumption activity will be in vain.#
  Capital
• A given stage [of production] does not correspond to a particular industry or even to a particular, objectively defined, collection of capital goods.#
  Capital
• It is a misnomer to speak of “calculating” the benefits and costs of intervention, when the evident effect of such intervention is interference with the market’s calculational procedures.#
  Policy
• Were individuals to know enough to rationalize a rule, they would generally know enough to abandon it.#
• The existence of purely speculative markets requires the divergence of expectations.#
  Expectations
• Neoclassical economics conflates the plan with the process of planning, the completed act with the process of acting.#
  Methodology
• Creativity can exist only within a framework that provides at least some degree of predictability.#

Axel Leijonhufvud, “Rational Expectations and Monetary Institutions” (1983)

• When theorists are not sure they understand, or cannot agree, it is doubtful that they are entitled to the assumption that private sector agents understand and agree.#

Ludwig Von Mises, The Theory of Money and Credit (1953)

• It is a display of considerable naiveté to recommend openly a monetary system that can work only if its essential features are ignored by the public.#
  MoneyPolicy

John Hicks, The Crisis in Keynesian Economics (1974)

• Liquidity is not a property of a single choice; it is a matter of a sequence of choices, a related sequence. It is concerned with the passage from the known to the unknown—with the knowledge that if we wait we can have more knowledge.#
  Money

D.J. O'Connor, “Determinism and Predictability” (1956)

• No prediction can distinguish the predicted event in such a way as to discriminate it from any of the other possible events that could fall under the same set of measurements…. The statement which expresses our prediction is never capable of identifying without ambiguity one and only one event whose occurrence would satisfy the prediction, for a description can do no more than specify a class of closely similar events, whose differences lie beneath the threshold of discrimination#
  Science