On this website, we attempt to concentrate our efforts on only the pure 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. Without knowledge of the pure science, applied science, which is concerned to treat human efficient causality, is in the dark. Fed, Treasury, BEA, NBER, CBO, university professors, financial analysts, and corporate strategists please take note!
It would be beneficial to Niall Ferguson and to the readers of his descriptive history, The Ascent of Money, were a macroeconomist to select an episode and, rather than describe the event, explain it using the tightly knit explanatory conjugates and relations of Lonergan’s Functional Macroeconomic Dynamics. A scientific analysis would provide both greater clarification and explanation in Ferguson’s work, and further cumulative verification of Lonergan’s hypothesis-become-theory. A similar recommendation would apply to Ray Dalio to assign and supervise an in-house economist to clarify and deepen Dalio’s excellent catalog of historical financial blunders., Also James Mackintosh of the Wall Street Journal could take the same course to make even better his “Streetwise” articles. Mackintosh might also enjoy reading Lonergan’s seminal Insight: A Study of Human Understanding, called by P. McShane “the most significant book of the twentieth century.”
For both graduate students of macroeconomics and their professors, the understanding and implementation of Functional Macroeconomic Dynamics, AKA Macroeconomic Field theory, could provide the basis of a happy and rewarding career.
Einstein said in connection with Special Relativity Theory, Everything is relative. Lonergan said regarding macroeconomic dynamics, The analysis is functional and purely relational. In normative Monetary Field Theory all velocitous and accelerative flows of products and payments are connected in a purely-relational, unitary, coherent system. And coherence means that all the explanatory conjugates and equations “hang together in a single unified theory.”
On one hand, in Centesimus Annus we affirm and emphasize the freedoms of the person, including the right to own what the person crafts, and we emphasize the dignity of the person. On the other hand, we note in the totalitarian system of government:
As healing can have no truck with hatred, so too it can have no truck with materialism. For the healer is essentially a reformer; first and foremost he counts on what is best in man. But the materialist is condemned by his own principles to be no more that a manipulator. He will apply to human beings the stick-and-carrot treatment that the Harvard behaviorist B.F. Skinner advocates under the name reinforcement. He will maintain with Marx that cultural attitudes are the byproduct of material conditions, and so he will bestow upon those subjected to communist power the salutary conditions of a closed frontier, clear and firm indoctrination, controlled media of information, a vigilant secret police, and the terrifying threat of labor camps. [CWL 15, 104] (A Gathering of Entries re Marxism) Click here)
Einstein would characterize Faraday’s and Maxwell’s electromagnetic theory as the “greatest alteration … in our conception of the structure of reality since the foundation of theoretical physics by Newton.” (quoted in Hirshfeld, 2006, p. 212) Perhaps we might say something comparable about Lonergan’s macroeconomics, gnoseology, and theology.
It’s unfortunate that people can’t rise above instinctual political and ethnic tribalism and us-against-them mentalities to higher-level principles of right rather than wrong, good rather than evil, truth rather than falsity, love rather than hate.
Let desperate, intellectually and personally weak individuals gain unmerited power and glory and many of them will do whatever they perceive necessary to hold onto that power and glory. They will deceive even themselves. They will develop a god-complex and come to consider their twisted inclinations and shallow hunches the supreme truth. For those many, no lie will be too big; and no giveaway to buy votes will be too profligate or damaging to the public welfare and the good of order. So, we ask, Do our empowering systems of politics and communication – executive, legislative, judicial, deep-state, academic, electronic and print – allow the general public to become hostage to weak, shallow, deceitful, power-holding individuals?
How many socioeconomic problems are primarily cultural problems, with clueless leaders throwing more and more money in vain at what are basically problems of culture and its ethos? A president or prime minister or chancellor must not confuse cultural problems with economic problems. A vast educational effort is called for.
A Must-Read: Fred Lawrence, “Money, Institutions, And The Human Good”: An Ordered Perspective Distinguishing Social and Monetary Values.
when a limited liability company has served its day, it goes to bankruptcy court; but when bureaucrats take over power, they intend to stay. … when the pressure of terrorism is needed to oil the wheels of enterprise, then the immediate effect is either an explosion or else servile degeneracy. (CWL 15, Editors’ Introduction xxxiv)
All payments are made to people, whether as productive workers in a unit of enterprise, unemployed individuals, entrepreneurs, rentiers, or workers providing government or other services. Only people have bank accounts, whether personal or virtual by dint of participation in an employing unit of enterprise. Ice cream does not have a bank account. Payment for ice cream is a final payment to the retail unit of enterprise, whose owner and employees have finally assumed the previous initial payments to humans working prior to them in the supply chain. We don’t make payments to clothes for themselves; ultimately we pay all the people in the chain of supply of clothes. All payments are made to people, whether directly or indirectly. It’s all Smith to Jones, and in what income bracket are Smith and Jones? And how does the money further circulate in the double-circuited, credit-centered system of monetary flows among tiers of compensation?
On the technology front, is the advance of technology outstripping the supply of human operational competence?
Speaking in proper grammar, with a few seldom-used words thrown in for good measure, may make the speaker appear intelligent, educated, even honest. But much of the content may be utter falsehood. The real issue, then, is truth.
Incentives to able-bodied people to not work must be replaced by incentives to work. What if the social cost of a higher rate of employment exceeds the social benefit? What if higher employment is a slowly-ascending logarithmic function while the associated cost is a rapidly-ascending exponential function, which will cause the swindle of rampant inflation?
There are two ways to conquer and enslave a nation … One is by sword, another is by debt. (John Adams, 1826)
Elizabeth Warren has not learned much macroeconomic dynamics. (See The Principles and Laws of Functional Macroeconomic Dynamics Remain the Same; Plus ca change, plus c’est la meme chose.) To her, every problem is one-sided and exists in an isolated silo. No functionings constituting the objective, dynamic, economic process have an obverse facet and are connected to, interrelated to, and mutually conditional to other functionings. They are not concomitant, conjoined, linked, implicitly defined by the relations in which they stand with other functionings. She doesn’t appreciate that Outlays are constituted by employment and compensation (Incomes) to individual persons in the breadth and depth of the rectilinear supply chain. Often she sees only one side of a two-sided coin. She fails to understand the meaning, significance, and basis in abstract theory of correlation, concomitance, conjoinment, and implicit definition. She is merely a lawyer and she fails to understand that outlays are incomes to employees, and expenditures are ultimately and necessarily conjoined with compensation. Some, though not all, of her questions and opinions are merely ignorant or opportunistic political rants.
… economic developments are finite, and so, no economic development will accelerate indefinitely. They operate against an increasing resistance, to justify Juglar’s celebrated pronouncement: “the only cause of depression is prosperity.” (as quoted in Schumpeter, History 11240)
… (the) broad backing of centralism and bureaucracy are signaled, in the long run, for phlogiston flushing. [McShane 2014, 56]
The Federal Reserve, the Bureau of Economic Analysis, the National Bureau of Economic Research, the Congressional Budget Office should assign three or more in-house economists to study and master the science of Functional Macroeconomic Dynamics, AKA Macroeconomic field Theory. Then each assignee should explain individually to a panel of judges, each judge having a strong background in physics and economics, what was learned anew and its superior, systematic, explanatory significance. Those judged best would then be classified as the experts on Functional Macroeconomic Dynamics. Finally, instruction would be given by these experts to all in-house economists in daily discussions on the difference and superiority of FMD’s unique and unitary explanatory perspective; and the organizations would a) acknowledge the explanatory conjugates and relations, b) seek to implement new methods of gathering useful, explanatory data, and c) would design new reports to replace Gross Domestic Product to aid in the achievement of the society’s good of order.
In the study of the immanent intelligibility of the economic process the student, regrettably lacking a scientific dynamic heuristic, is given all the measured data yet fails to spot the interdependencies and interconnections comprising the systematics of the process. The student may advert to each clue as it arises. The student needs no further clues to solve the mystery. Yet the student can remain in the dark for the simple reason that reaching the explanatory solution is not the mere apprehension of any one or two clues, not the mere memory of all, but a quite distinct activity of organizing intelligence that places the full set of interdependencies and interconnections in a unique explanatory perspective. (CWL 3, Preface, ix) All the explanatory conjugates and their interrelations tumble out together, because all are needed to express adequately the single sweeping and supervening insight. All are coherent, for coherence basically means that all hang together from a single insight. (Seee CWL 3, 11-12/36)
The Peter Principle is a concept in management developed by Laurence J. Peter, which observes that people in a hierarchy of government, industry, commerce, and education tend to rise to “a level of respective incompetence”: employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.[1] (Wikipedia)
In the present culture, business is not a morality play. The present culture lacks a unitary explanatory theory of the objective, dynamic, macroeconomic process. When demand and backlogs are excessive, producers raise prices. And when workers’ wages and salaries don’t keep up with price increases, workers counter by demanding higher wages and salaries. Back and forth, punch and counterpunch. Without the explanatory theoretical framework of Functional Macroeconomic Dynamics and the success of a vast educational project plus hearts of goodwill, the beat of punch and counterpunch goes on of everyone wanting more and more to preserve or regain their desired portion of the pie.
The function of credit is to fill the gap of time between payments made and payments received, whether it’s getting and spending each week or inventing, building, installing and using new capital. Consider types of transmission and their temporality, whether of instantaneous action at a distance or over time in waveform, whether per the laws of gravitation, electromagnetism, or sound weaves,or whether per the temporality of the gaps of time between payments made and payments received in the supply chain or in the lagged technical accelerator.
k[f’n(t-a) – Bn] = f”n-1(t) –An-1 . (for context see CWL 15, 37)
Which is the better principle of government? – The freedom of worship and speech, and the right to private property for self-development of Centesimus Annus or the oppression and closed-mindedness of a totalitarian, socialist-communist government? (Click here)
But the materialist is condemned by his own principles to be no more that a manipulator. He will apply to human beings the stick-and-carrot treatment that the Harvard behaviorist B.F. Skinner advocates under the name reinforcement. He will maintain with Marx that cultural attitudes are the byproduct of material conditions, and so he will bestow upon those subjected to communist power the salutary conditions of a closed frontier, clear and firm indoctrination, controlled media of information, a vigilant secret police, and the terrifying threat of labor camps. [CWL 15, 104]
Its means include not merely every technique of indoctrination and propaganda, .. but also the terrorism of a political police, of prisons and torture, of concentration camps, of transported and extirpated minorities, and of total war. [CWL 3, 231-32/256-57]
A rigidly egalitarian system belongs to a perfectly egalitarian world; (but) a world in which men are, in fact, unequal must find a different system. What system? If the idealism is sentiment without intelligence, it is as likely as not to mate with the underground cynicism of the revolutionaries to foist upon us a dictatorship of the proletariat in which the proletariat does not dictate, a dictatorship of the Herrenvolk in which the Volk obeys the Fuhrer. (CWL 21, 36)