Keynes on Probability, Uncertainty and Tragic Choices

Abstract

Right from 1904-6 Keynes was interested in the problems of moral dilemmas which are typical of Greek tragedy. His constant attention to the incommensurability and incomparability of magnitudes (probability and economic magnitudes such as real income, real capital and general price level) derives from this early interest in dilemmas and his concept of uncertainty is connected with rational dilemmas and tragic choices. So, in Keynes, incommensurability and uncertainty are connected with Greek tragedy. Keynes deals with the incommensurability of reasons which are at the ground of probable judgement in his A Treatise on Probability : rational dilemmas arise when there is conflict between incommensurable, opposite and heterogeneous reasons which cannot be weighed down one against the others on a common balance. The dilemmas of the umbrella in A Treatise on Probability, of Buridan's ass in Keynes' s letter to Townshend in 1939, of the two Queens Victoria and Elizabeth in The General Theory are some of the examples to which Keynes refers in his writings. These dilemmas characterise situations of indecision, of irreducible conflict, that is of uncertainty.