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]

Lonergan’s basic explanatory terms are rates of so much or so many every so often; i.e. the foundational and superstructural explanatory terms of the economic process are velocities.  What at first seem to be everyday commonsense descriptive utterances are “remeaningized”, given another meaning, or redefined, and precisely distinguished and related as functional point-to-point activities or functional point-to-line activities; and they are scientifically employed as abstract technical terms in an explanatory formulation.

… V. Lenzen in his Nature of Physical Theory emphasizes the genetic process that begins from experiential contents of force, heat, extension, duration, etc., to move through a process of redefinition towards terms implicitly defined by empirically established principles and laws. [CWL 3, 81-82/105]

Lonergan went on to identify the contemporary notion of a “function” as one of the most basic kinds of explanatory, implicit definition – one that specifies “things in their relations to one another” (CWL 3, 37-38/61-62)…In Lonergan’s circulation analysis, the basic terms are rates – rates of productive activities and rates of payments.  The objective of the analysis is to discover the underlying intelligible and dynamic network of functional, mutually conditioning, and interdependent relationships of these rates to one another.  [CWL 15, 26-27  ftnt 27]

The correlations that explain the objective economic process are patterns of laws which must be honored.

Our immediate task is to work out the correlations that exist between the velocity and accelerator rhythms of production and the corresponding rhythms of income and expenditure.  The set of such correlations constitutes the mechanical structure, a pattern of laws that stand to economic activity as the laws of mechanics to buildings and machines. [CWL 21, 43] 

(Types of functional) payments form a class by themselves.  They stand in a network that is congruent with the technical network of the productive process. …above all, their connection with production is immediate: they …  are, so to speak, the immanent manifestation of the productive process as a process of value. [CWL 21, 114]

Lonergan discovers an intelligible, normative, pure cycle of expansion for which the process has an exigence; and he discovers the systematics of the process as a macroeconomic field theory.

This pure cycle stands to our ordinary apprehension of economic booms and slumps as the explanatory (abstract) conception of acceleration stands to our ordinary (concrete) apprehension of going faster and slower.  It sheds the ‘new light on equilibrium’ that Schumpeter was seeking.  (CWL 15, lxiii)

The Bureau of Economic Analysis’s Gross Domestic Product consists of aggregate quantities in non-explanatory accounting categories.  The BEA describes but does not scientifically explain.  “An accountant’s unity is not an adequate index for the normative, explanatory analysis of the productive process.”

Criticism requires a normative theory and framework.

Ftnt. 26 -An ‘accountant’s unity’ is a category used in (GAAP Generally Accepted Accounting Principles, i.e. conventional) accounting.  For Lonergan, accounting generally denotes an enterprise within common sense, which uses descriptive, as contrasted with explanatory terms (on these terms see CWL 3, 37-38/61-62, 178-79/201-3, 247-48/272-73).  Insofar as that is true, the accountant’s unity is not an adequate index for the normative, explanatory analysis of the productive process. [CWL 15, 26, ftnt 26]

Thus Gross Domestic Product does not constitute a “normative, explanatory analysis of the productive process”, which can be used as a basis for criticism.  For criticism requires a normative theory as its basis of criticism.

There is a sense in which one may speak of the fraction of basic outlay that moves to basic income as the “costs” of basic production.  It is true that that sense is not at all an accountant’s sense of costs; … But however remote from the accountant’s meaning of the term “costs,” it remains that there is an aggregate and functional sense in which the fraction… is an index of costs.  For the greater the fraction that basic income is of total income (or total outlay), the less the remainder which constitutes the aggregate possibility of profit.  But what limits profit may be termed costs.  Hence we propose ….to speak of (c’O’  = p’a’Q’) and (c”O” = p”a”Q”) as costs of production, having warned the reader that the costs in question are aggregate and functional costs…. [CWL 15, 156-57] 

For Lonergan’s use of  the vector dot product as an index see CWL 15, Section 23: “Measuring Change in the Productive Process (II), pp. 107-113.

Footnote 27 – Abstract, explanatory, technical terms are defined by the functional relations in which they stand with one another; i.e. explanatory terms are defined by their functional relations among themselves.  The meaning is fixed by the relation – not by Webster or willy-nilly usage.

“Functional” is for Lonergan a technical term pertaining to the realm of explanation, analysis, theory; it does not mean “who does what” in some (descriptive) commonsense https://functionalmacroeconomics.com/2021/09/22/common-sense-vs-science/ realm of activity.  ¶ Lonergan illustrates his basic meaning of ‘explanation’ by referring to D. Hilbert’s method of implicit definition: 

‘Let us say, then, that for every basic insight there is a circle of terms and relations, such that the terms fixthe relations, the relations fix the terms, and the insight fixes both.’  … ‘Thus the meaning of both point and straight line is fixed by the relation that two and only two points determine a straight line.

‘In terms of the foregoing analysis, one may say that implicit definition consists in explanatory definition without nominal definition.’ (Insight 12, 36/37) (end of footnote 27)

The productive process always is the current, purely dynamic process

Thus the productive process is a purely dynamic entity.  We began by saying how broadly the term was to be taken.  But it is also necessary to insist how narrowly.  It is not wealth, but wealth in process. … It is none of its own effects, if by effects are understood what has been completed.  It is neither the existence nor the use of durable consumer goods, of clothing, houses, furnishings, domestic utensils, personal belongings, or indeed any item of private or public property that can be listed as a consumer good and has passed beyond the process to become an element of the community’s standard of living.  On the other hand, with regard to producer goods a distinction has to be drawn: they are in the process as a means of production; they are in the process in the sense that labor is in the process or that management is in the process, namely, their use forms part of the process; but once they are completed they are no longer under process, any more than labor or management is under process and being produced. … factories and machinery, railways and power units, warehouses and offices are in the productive process only while being produced; once they are produced, they themselves have passed beyond the process to enter the category of static wealth, even though their use remains a factor of production.(CWL 15, 21-22)