The human mind seeks understanding of the whole.

For the human mind is such that it does not wonder about things just individually but, understanding individual elements, goes on to ask how they are connected with one another. [CWL 12, 17]

Lonergan was seeking the explanatory intelligibility underlying the ever-fluctuating rhythms of economic functioning.  To that end he worked out a set of terms and relations that ‘implicitly defined’ that intelligible pattern. [CWL 15, 179-80]

Forms are grasped by mind in images.

… just as a mathematical equation may be said to be the most adequate expression of purely intelligible relations among explanatory terms in certain instances – for example, Einstein’s gravitational field tensor equations – something closely akin to Lonergan’s diagram (and the equations it represents) seems necessary for the realm of dynamic economic functioning.  So, for example, the existence and manner of dynamic mutual interdependence of the two circuits of payment, basic and surplus, is not adequately expressed either by descriptive terms (since this pattern does not directly relate to the senses of anyone operating in a common-sense way in a concretely functioning economy) nor by the series of (simultaneous) equations that do not explicitly manifest the interchanging of ‘flows.’ [CWL 15, 180]

Lonergan held the diagram to have both explanatory and heuristic significance.  First, then, the later versions of the Essay in Circulation Analysis text draw ever-greater attention to the fact that (again) Lonergan was seeking the explanatory intelligibility underlying the ever-fluctuating rhythms of economic functioning.  To that end he worked out a set of terms and relations that ‘implicitly defined’ that intelligible pattern. [CWL 15, 179-80]

The two circuits of the Diagram of Rates of Flow are in dynamic mutual interdependence.  They explicitly manifest the interchanging of ‘flows.’

the existence and manner of dynamic mutual interdependence of the two circuits of payment, basic and surplus, is (purely relational and) not adequately expressed either by descriptive terms (since this pattern does not directly relate to the senses of anyone operating in a common-sense way in a concretely functioning economy) nor by the series of (simultaneous) equations that do not explicitly manifest the interchanging of ‘flows.’ [CWL 15, 179-80]

… the diagram as itself a visual image can facilitate the occurrence of insights.  For example, while the text of Section 13 works out in great detail sets of relations among terms, the diagram makes it easy to understand that the exchange economy consists of two circuits of payments, basic and surplus; that these circuits are mutually and dynamically interdependent (because of the crossovers); and that these circuits are dependent upon the activities of the redistributive function. [CWL 15, 180]

Establishment economics is on the wrong track.

Lonergan’s intention was ‘to formulate the laws of an economic mechanism more remote and, in a sense, more fundamental than the pricing system…laws which men themselves administrate in the personal conduct of their lives. Lonergan’s interest … was to emphasize that prices and their changes are not explanatory but accountants’ entities………Lonergan insists that the mechanism of the pricing system does not furnish economists with distinctions among significant variables of aggregate surplus (or producer-goods) and basic (or consumer-goods) supply and demand with their determinate yet flexible velocities and accelerations, any more than Galileo Galilei’s discrete measurements of distances and times at the Tower of Pisa of themselves provided the law of the acceleration of falling bodies…….the lack of ultimacy that Lonergan ascribes to prices and price theory can scarcely be overemphasized. CWL 15 xlvi-xlvi