Something of a Copernican Revolution

Prior to Copernicus (and perhaps others) the prevalent thinking about the sun and planets was a geocentric theory.  The earth was the center of the universe, and the sun and known planets revolved around the earth.  Astronomers deduced what they could from their assumption of a geocentric universe.  Copernicus proposed a revolutionary heliocentric theory: The earth and other planets revolve around the sun. (Wikipedia has a good animation)

In macroeconomics, most theorists assume that human utilities and preferences are the primal ground of all analysis.  From this they deduce what they can and what they will.  In opposition, Functional Macroeconomic Dynamics considers the system of laws of production and exchange to be primal.  And humans must adapt to these laws for the process to be continuous and equilibrated.  Thus the system of iron laws of production and exchange are at the center, and humans must adapt to the norms yielded by these laws.

The primary relativities of the overall functioning process are the interdependent relations of functionings, implicitly defined by the functional relations in which they stand with one another.  The whole structure is purely relational.  Pricings and quantities are the secondary determinations in the coincidental manifold of economic activities.  Humans must adapt to the system of laws generally governing the process of production and exchange.  These laws are constituted by primary, objective, functional interrelations, not by humans’ shifting preferences or by coincidental pricing and quantities.  Humans “revolve” around the laws, so to speak; the laws do not “revolve” around humans.  “… something of a Copernican revolution is achieved.”

our inquiry differs radically from traditional economics, in which the ultimate premises are not production and exchange but rather exchange and self-interest, or later, exchange and a vaguely defined psychological situation.  Our aim is to prescind from human psychology that, in the first place, we may define the objective situation with which man has to deal, and, in the second place, define the psychological attitude that has to be adopted if man is to deal successfully with economic problems.  Thus something of a Copernican revolution is attempted: instead of taking man as he is or as he may be thought to be and from that deducing what economic phenomena are going to be, we take the exchange process in its greatest generality and attempt to deduce the human adaptations necessary for survival. [CWL 21,42- 43]

We set out to indicate the existence of an objective mechanical structure of economic activity, of something independent of human psychology, of something to which human psychology must adapt itself if economic activity is not to become a matter of standing in a tub and trying to lift it. [CWL 21, 56]

A study of the mechanics of motor-cars yields premises for a criticism of drivers, precisely because the motor-cars, as distinct from the drivers, have laws of their own which drivers must respect.  But if the mechanics of motors included, in a single piece, the anthropology of drivers, criticism could be no more than haphazard.[1]CWL 21, 109

The edifice of formulae of Functional Macroeconomic Dynamics does not include any terms or relations from the human psyche; rather the edifice regards only the relations of functioning to one another.  The whole structure is purely relational and independent of human psychology.

[1]Haphazard means marked by lack of plan, order, or direction (Webster)

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