The Lack of Ultimacy in Price Theory; Prices are Last in the Analysis and Purely Relative

Leave a reply

DRAFT

Contents

.1. Preliminaries and preview

.2. Functional Macroeconomic Dynamics is a normative theory

.3. Microeconomics vs. Macroeconomics

.4. The normative systematics of prices is last in the analysis – We are not doing microeconomics

4.a Preliminaries

4.b Reference to other treatments

4.c Prices are treated in several contexts

4.d Prices are formally treated last in the analysis

4.e The intelligibility of prices as real and relative.

4.f “Absorbing several trillion Dollars of Free Money”

4.g Miscellanea

.5. Monetary stability -correlation and concomitance of magnitudes and frequencies with magnitudes and frequencies

.6 Lonergan’s three assumptions in treatment of pure expansion

.7. Inflation due to scarcity or to mistaken anticipations – instances of inflation

8. Divergences of particular flows and the requirement of systematic correction

.9. Miscellanea

.10. CWL 15, Section 28 spreadsheet

.11. Appendix: Indexes of textbooks re prices

Continue reading →

The Necessity of a Diagram

Leave a reply

Lonergan brought knowledge from several other fields which was foundational to his work on Functional Macroeconomic Dynamics.  During the writing of these pages, two different ideas frequently occurred to the author: 1) it was important to communicate the key background that Lonergan brought to Functional Macroeconomic Dynamics from mathematics and the sciences, and 2) perhaps specialists in pure and applied mathematics and physics, rather than economists, might be better candidates for understanding and appreciating Lonergan’s work.  If the readers themselves had backgrounds adequate to appreciate the full context of Functional  Macroeconomic Dynamics, they would be more intrigued and interested.  How could the person who authored Insight not be innovative, perhaps revolutionary, when he sought to discover a scientific macroeconomics?  So, below are some background things about a) insight into diagrams and images, b) the importance of images to Einstein and other physicists, and c) the theoretical breakthrough represented by the particular diagram entitled Diagram of Rates of Flow. Continue reading

Just Thinkin’ 4/26/2024

Leave a reply

Would Diogenes be successful in finding an honest person in the Halls of Congress or the enclaves of the Executive Branch, where the getting and keeping of power outranks any obligation to grasp and speak the truth?

Recommended reading: Graduate school professors of macroeconomics should assign the reading of CWL 3, Chapter 2, Sections 2.2.3 “Classification and Correlation”; 2.2.4 “Differential Equations”; 2.2.5 “Invariance”; and 2.2.6 “Summary”. And the professors should require a report on the relevance of those sections to scientific Functional Macroeconomic Dynamics. Wrestling with Lonergan’s presentations will help the students appreciate the mind that Lonergan brought to Functional Macroeconomic Dynamics.

I’m told that Burton Malkiel’s stock-market acumen (A Random Walk Down Wall Street) has been exceeded as to excellence only by his excellence in declamation at Boston Latin School   –  something about Shakespeare’s Julius Caesar and a “mewling infant.” Arma virumque cano …

Continue reading →

Facing Facts: The Ideal Of Constant Value Of The Currency vs. The Fact Of Inflation

Leave a reply
    • Ideally, (dummy) money would be constant in exchange value.
    • Scarcity is the normal cause of inflation
    • The maladaptive cause of inflation is maladjustment of incomes as required by the current phase of the pure cycle of expansion
    • The quantity of money infused by the Central Bank must be properly calibrated to serve the normative requirements of the actual magnitudes and frequencies of turnovers in the productive process

      • Economists must carefully consider tiers of basic incomes and propensities to consume:

      I’ = Σwiniyi   (35) [CWL 15, 134]  and

      dI’ = Σ(widni + nidwi)yi (36) [CWL 15, 134]. 

      • Also, Economists must carefully consider expansion in phases and the interpretation of its effect on the Basic Price-Spread Ratio. (CWL 15, 156-62):

    • P/p = a’ + a”p”Q”/p’Q’   (CWL 15, 156-62) (45)

      i.e.,   J = a’ + a”R   (CWL 15, 156-62) (45)

      so,  dJ = da + a”dR + Rda”   (CWL 15, 156-62) (47)

Note: The treatments of price changes in CWL 15 are mainly in 1) pp.75-80, 2) 128-44, and 3) 156-62.

Sequence of Contents

  • Ideal and practical aspects of the economic process 
  • Ideally, money would be constant in exchange value 
  • The condition of constancy in exchange value 
  • Characteristics of dummy money in an exchange economy 
  • Promise and trust between two parties
  • The dynamic structure of the productive process and classes of monetary flows 
  • But prices do change.  The changes have causes and intelligibilities and the changes must be interpreted.
  • Concomitance and intensity among flows
  • Real analysis and the everyday use of money 
  • Price tendencies (prescinding from excess or deficient money supply) 
    • The first kind of cause of inflation – ordinary scarcity
    • The second kind of cause of inflation – disproportion between monetary and real consumer income
  • Misconceptions of professional economists as to interest rates and responsibilities
  • Adjusting the rate of saving to the phase of the expansion
  • Further re interpretation of price changes 
  • The basic price-spread ratio

To continue reading click here

Thanks to Catherine Blanche King for a Clarifying Paragraph

Leave a reply

Thanks to Catherine Blanche King for recommending the following paragraph re description vs explanation.

Seventhly. however, the questions that are answered by a pattern of internal relations are only questions that ask for explanatory system.  But besides things-themselves and prior to them in our knowing, there are things-for-us, things as described.  Moreover, the existents and occurrences, in which explanatory systems are verified, diverge non-systematically from the ideal frequencies that ideally would be deduced from the explanatory systems.  Again, the activity of verifying involves the use of description as an intermediary between the system defined by internal relations, and, on the other hand, the presentations of sense that are the fulfilling conditions.  Finally, it would be a mistake to suppose that explanation is the one true knowledge; not only does its verification rest on description but also the relations of thing to us are just as much objects of knowledge as are the relations of things among themselves. (CWL 3, 345)

We have often pointed out Lonergan’s intention to explain scientifically the dynamic economic process.  The above paragraph clearly points out the existence and importance of description in human knowing. A frequent quote:

A distinction has been drawn between description and explanation.  Description deals with things as related to us.  Explanation deals with the same things as related among themselves.  The two are not totally independent, for they deal with the same things and, as we have seen, description supplies, as it were, the tweezers by which we hold things while explanations are being discovered or verified, applied or revised. … [CWL 3, 291/316]

A Must-Read: Editors’ Introduction to CWL 15, Sections 5 and 6

Leave a reply

Serious readers – especially graduate students in economics – must do themselves a huge favor.  They owe it to themselves to read carefully two sections of Frederick G. Lawrence’s Editors’ Introduction of CWL 15,

[CWL 15] Lonergan, Bernard (1999), Macroeconomic Dynamics: An Essay in Circulation Analysis, ed. Frederick G. Lawrence, Patrick H. Byrne, and Charles Hefling, Jr., vol 15 of Collected Works of Bernard Lonergan, (Toronto: University of Toronto Press) [CWL 15]

Section 5: Macroeconomic Dynamic Analysis as a New Paradigm of Economic Theory

Section 6: The Systematic Significance of the Fundamental Distinction Between Basic and Surplus Production and Exchange: A Normative Theory of the Pure Cycle

6.1 Profit

6.2 Interest

6.3 Lonergan’s Critique of ‘Supply-Side’ and Demand-Side’ Economics

Eventual mastery by serious readers of these sections plus the main text will help them secure influential professorships, research grants, board seats and other important advisory positions.  They will have the satisfaction of influencing beneficially those with whom they interact professionally and casually.

Two other key works:

[CWL 21] Lonergan, Bernard (1998), For a New Political Economy, ed. Philip McShane, vol 21 of Collected Works of Bernard Lonergan, (Toronto: University of Toronto Press) [CWL 21]

[CWL 3] Lonergan, Bernard J. F. (1957 ) Insight, A Study of Human Understanding, Longmans, Green and Co. Ltd., London; and (1997) Toronto: University of Toronto Press [CWL 3, 1957/1997] 

 

An Einsteinian Relativistic Context: Space and Time Become Space-Time; Price and Quantity become Price-Quantity; An Abstract Set of Invariant Explanatory Relations

Leave a reply

Contents

.I. Relations and Relativity in General

.II. Einstein’s Special Relativity and General Relativity

.III Lonergan’s Double-Circuited, Pretio-Quantital Relativity Theory

.IV. The Basic Price Spread; The Co-ordinated Relativity of Three Major Pretio-Quantital Flows and the Co-operative Relations Within Each Major Flow

.V. The Macroeconomic Field Theory Equations

.VI. Concerning Verification

.VII. Miscellaneous Selections

.VIII. Conclusion

  Click here.

The Einsteinian Context: Curvature and Relativity

Leave a reply

Albert Einstein, Steven Weinberg, Lillian Lieber, Douglas Giancoli, Raymond A. Serway, Bernard Lonergan, Philip McShane, Peter Burley,

.1. Introductory

Graduate students seeking a thesis topic may expand this treatment of the Einsteinian context of Functional Macroeconomic Dynamics.  It should be of special interest to those having a strong background in theoretical physics and, thus, able to appreciate the analogies from physics.  “Similars are similarly understood.” (CWL 3, 288/313)

Philip McShane alerted us to the resemblances between Lonergan’s context of general macroeconomic dynamics and Einstein’s context of general relativity.

(Part Two entitled Fragments) belongs almost entirely in what I call the Einsteinian context of Part Three, in contrast to the Newtonian achievement of Part One; … [CWL 21, Index, 325]

A new science has emerged.  Lonergan has elevated conventional macrostatics to a macrodynamics explaining economic accelerations. (Continue reading)

The Acceptance of a “New Horizon” in Scientific Macroeconomics; A Spectacle of Insecurity

3 Replies

… a new scientific theory gets across when the present generation of professors is retired. (Max Planck) (CWL 10, 93)

… a recession of the horizon within the scientific field meets with resistance.  The (human) subject dreads to change, to remodel the organization that is himself, his living in the scientific world. (CWL 10, 93)

Scientists will disagree; they will fight; the period of crisis and reformulation presents a spectacle of insecurity; (CWL 10, 94)

Lister’s discovery, one of the most important advances in medical history, was lightly dismissed. … By 1876, Lister’s steady and astonishing success had silenced nearly all of his detractors at home and in Europe.  The United States, however, remained inexplicably resistant.  … (Candice Millard: Destiny of the Republic (Doubleday, New York, 2011) pp. 14-16)

By ‘scientific development’ I mean development in mathematics or natural science.  The scientific horizon recedes, expands, when there occurs a crisis in existing methods, procedures, theories, assumptions, which are seen to fail.  They cannot handle known results, known observations or data, known conclusions. (CWL 10, 92-3)

It is this (eventual universal acceptance) of scientific development that commands the great esteem in which science is held. (CWL 10, 94)

Continue reading →

The Real Issue Is Truth; Civilization Rises from Vague Symbols to Differentiated Consciousness and Universal Truths

Leave a reply

Contents

Part I: Preliminaries

Part II; The Issue of Truth: Heuristics, Criterion, Canons, Verification

Part III: Symbols; Civilization’s Need for their Enucleation

III.a Symbols and the process from the primitive to the civilized

III b: Symbols and their enucleation toward objective truth and verification

Part I: Preliminaries

 

Harvard Crimson Alternate Logo (1636) - University Shield | Harvard ...

To preview fuller content we provide six brief excerpts:

“Functional” is for Lonergan a technical term pertaining to the realm of explanation, analysis, theory;  … a “function” … specifies “things in their relations to one another” … [CWL 15, 26-27  ftnt 27]

The proximate criterion of truth is reflective grasp of the virtually unconditioned … Essentially, then, because the content of judgment is unconditioned, it is independent of the judging subject.  Essentially,  rational consciousness is what issues in a product that is independent of itself.  (From) absolute objectivity … there follows a public or common terrain through which different subjects can and do communicate and agree. (CWL 3, 549-50/573)

A symbol is an image of a real or imaginary object that evokes a feeling or is evoked by a feeling. (CWL 14, 64/62)

No less than scientific language, symbolic language intends a truth yet can be wrong.  … … things have only one way of being, but humans do not have only one way of knowing.  One who knows scientifically knows universally; but this universality does not belong to things (as though each individual thing were a universal) but to the scientific way of knowing. CWL 11, 381)

Symbols obey the laws not of logic but of image and feeling.  For the logical class the symbol uses a representative figure.  For univocity it substitutes a wealth of multiple meanings.  It does not prove but it overwhelms with a manifold of images that converge in meaning.  It does not bow to the principle of excluded middle but admits the coincidentia oppositorum, of love and hate, of courage and fear, and so on.  It does not negate but overcomes what it rejects by heaping up all that is opposite to it.  It does not move on some single track or on some single level, but condenses into a bizarre unity all its present concerns. (CWL 14, 66/64)

progress is from the compactness of the symbol to the differentiation of philosophic, scientific, theological, and historical consciousness.(CWL 10, 55)

On this website, we attempt to concentrate our work on only the systematics and dynamics of Bernard Lonergan’s Functional Macroeconomic Dynamics.  That is, we treat only the formal cause or immanent intelligibility of the pure science of Functional Macroeconomic Dynamics rather than the efficient and final causes of concern to applied science.,

Continue reading →