He was born in Cambridge, son of Robert Walker Shackle (1851-1934), a mathematics-teacher father who had coached John Maynard Keynes to an Eton scholarship, and Fanny Sharman (1865-1936).
He started work on a PhD under the supervision of Friedrich Hayek at the LSE but switched to an interpretation of Keynes's General Theory of Employment, Interest and Money.
Following a number of academic posts, at the outbreak of World War II in 1939, Shackle was appointed to S-Branch, Sir Winston Churchill's inner office of economists.
Shackle was influenced by Keynes and Gunnar Myrdal and challenged the conventional role of probability in economics, contending that it failed adequately to deal with "surprising" events.
When realizing that economic decision makers lack the knowledge necessary for probabilistic analysis, the ability to consequently make rational expectations off of said data is almost impossible.
To make matters even more complicated for the New-Classical economists, Shackle proceeded with his analysis, already attacking one of the core foundations of modern Mainstream economics, perfect knowledge.
Entrepreneurship is probabilistically irrational, it makes little sense to embark upon an economic decision in which its fate is determined by millions of other contingent human beings and their subjective needs and preferences.
Shackle's potential surprise theory was fundamentally based on the role of imagination in economics, bridging the great asymmetry of knowledge of entrepreneurs to make actions which consequently determine the future: "At the heart of Shackle’s theory of choice is the idea that, when people consider the possible consequences of taking a decision, they give their attention only to those outcomes that they (a) imagine and (b) deem, to some degree, to be possible.
At the centre of Shackle's kaleidic vision was the ability for economic actors to keep their options open and due to imperfect knowledge and the nature of imagination, proceed with the dual analysis of possibilities rather than entire probability distributions.
However, the reference to ex ante and ex post analysis has become so usual in modern macroeconomics that the position of Keynes to not include it in his work, is currently considered as an oddity, if not a mistake.
As Shackle put it:[6] Myrdalian ex ante language would have saved the General Theory from describing the flow of investment and the flow of saving as identically, tautologically equal, and within the same discourse, treating their equality as a condition which may, or not, be fulfilled.Shackle has also made important contributions to the history of economic thought, especially with regard to twentieth century economic schools of thought.
[9] In these writing Keynes formulated a theory of uncertainty about the future that exploded the entire edifice of traditional economics which rested, implicitly, on the notion of timeless equilibrium conceptions which implied full access to knowledge on the part of all actors.
In outlining this Shackle sought to marry what he considered Keynes' best insights in the Treatise on Money with his later notion of liquidity preference in the General Theory.
When they tried to justify this method neoclassical economists, beginning with Léon Walras and Francis Ysidro Edgeworth invoked the principle of tâtonnement or "groping".
This implied that the system of simultaneous equations was being used as a sort of shorthand for a result that was actually reached dynamically through a series of trials and errors.
But Shackle claimed that this type of reasoning based on an analogy between a static system of simultaneous equations and a dynamic process of tâtonnement was extremely misleading.
He thought that the foundations were too at odds with the nature of the material being dealt with to salvage it by relaxing some of the stronger assumptions as, for example, Neo-Keynesian and New Keynesian economists try to do.
Deliberative conduct, choice, the prime economic act, depend for their possibility, when they go beyond pure instinctive animal response to stimulus, upon the conceptual power of the human mind.
It should move away from abstractions that could not account for time or proper, free choice and instead should try to make sense of a world where both imagination and reason played a role in determining economic outcomes.
In 'The Black Swan', Nassim Nicholas Taleb writes about Shackle (emphasis added): Hayek is one of the rare celebrated members of his "profession" (along with J. M. Keynes and G.L.S.
Tragically, before the proliferation of empirically blind idiot savants, interesting work had been begun by true thinkers, the likes of J. M. Keynes, Friedrich Hayek, and the great Benoit Mandelbrot, all of whom were displaced because they moved economics away from the precision of second-rate physics.