Acknowledgments and Thanks

The first version of this website treating Bernard Lonergan’s Functional Macroeconomic Dynamics has been composed without the benefit of peers’ helpful suggestions. However, the authors did consult carefully and benefit greatly from certain printed works of Philip McShane and Peter Burley, and from the Editors’ Introductions of both CWL 15 and CWL 21.  So, appreciation is expressed below to the individuals involved for their excellent authorship and commentary on behalf of all who would seek to understand and implement the new Functional Macroeconomic Dynamics.

Philip McShane

Philip McShane passed away on July 1, 2020. (Tribute)

Philip McShane understood Lonergan’s Functional Macroeconomic Dynamics better than anyone ever  has. In books, lectures, conversation, and website Philip McShane notified the world of this new paradigm, and new standard model in macroeconomics. In 1980, in Lonergan’s Challenge to the University and the Economy,[1] he placed functional economics in its historical context and spoke clearly of its scientific significance.

When I first battled with his 1944 typescript in the 1970’s I recall expressing my wonder….that “Lonergan had gone, in economics, from Tycho Brahe to Laplace.” [Philip McShane, Fusion 9, page 1]

With a background in mathematics, theoretical physics, and philosophy, McShane, far more than anyone else, had the intellectual chops to compare functional macroeconomics with the most up-to-date neo-classical and Keynesian economics and to judge the significance and the revolutionary nature of Lonergan’s achievement. He was chosen to be the Editor of CWL 21; and his arrangement of the book and his comments as Editor demonstrate his thorough understanding of Functional Macroeconomic Dynamics.

Key phrases in McShane’s writings give clues to the depth of both his own thinking and the understanding required by others if they are to appreciate fully the revolutionary nature of scientific macroeconomics. To reach up to the mind of McShane is to reach up to the mind of Lonergan. Consider the stimulus to the reader of McShane’s commentaries on Lonergan’s economics. Here are a few:

Taking into account past and (expected) future values does not constitute the creative key transition to dynamics. Those familiar with elementary statics and dynamics will appreciate the shift in thinking involved in passing from equilibrium analysis…to an analysis where attention is focused on second-order differential equations, on d2θ/dt2, d2x/dt2, d2y/dt2, on a range of related forces, central, friction, whatever….. What is significant is the Leibnitz-Newtonian shift of context. [McShane 1980, 127]

Frish’s failure to develop a significant theory typifies the failure of economists who search for a dynamic heuristic. As well as a fundamental disorientation of approach there is also a tendency to shift to an inadequate level of abstraction with a premature introduction of boundary conditions in a determinate set of differential and difference equations. [McShane 1980, 114]

One might be reminded here of a parallel in hydrodynamics: if what is at issue is a general specification of the dynamics of free water waves, a premature introduction of general boundary conditions or worse, specific channel conditions, botches the analytic possibilities….the Robinson-Eatwell analysis is hampered by their building the economic priora quoad nos of profits, wages, prices, etc., into explanation, when in fact the priora quoad nos are last in analysis: they require explanation. [McShane 1980, 124]

A heuristic analysis of dJ/dt over the phases of the an economic expansion reveals cyclic fluctuations of the basic price spread which are reminiscent of cycles noted by Kitchin, Crum, and Juglar. [McShane 1980, 127-8]

Part Two (of CWL 21): Fragments … belongs almost entirely in what I call the Einsteinian context of Part Three, in contrast to the Newtonian achievement of Part One, (but Part Two) is still somewhat transitional in system and expression. So, for example, to take the central character in the drama, pure surplus income is there named systematic profits. [CWL 21, 325]

McShane pointed out both the fundamental disorientations of academic macroeconomists and the features of a scientific, dynamic heuristic, which is crucial for the understanding and implementation of Lonergan’s Macroeconomic Field Theory.

  1. Peter Burley

“Peter Burley was Emeritus Professor of La Trobe University in 1997, following twenty six years there as Professor of Econometrics; after which he was appointed a Visiting Fellow in the Sub Faculty of Theology at Australian Catholic University for two years. He had previously held appointments at the Erasmus University of Rotterdam 1968-70, Princeton University 1964-68 (where he was awarded a PhD in Economics) and the University of Adelaide 1961-64 (where he was awarded a PhD in Physics). In the meantime he was an occasional visitor to universities in France, Austria, the Czech Republic, Poland, Hungary and the United Kingdom. Throughout his academic career he maintained an interest in Lonergan’s works, to which Tom Daly first introduced him in 1959.” [Burley 2002, x]

Prior to Burley’s reading Lonergan’s essay, he had worked diligently and brilliantly in economics over many years. He thus brought a wealth of understanding of historical facts and competing theories to his reading of Lonergan’s economics and to his construction of mathematical models of a Schumpeter-Lonergan creative-destructive economy. (Burley’s Curriculum Vitae.) (See A Burley Sampler)

Burley has written several essays which provide a von Neumann representation of a dynamic Lonergan-Schumpeterian, creative-destruction economy:

[1] Burley, P. (1989), A von Neumann Representation of Lonergan’s production problem, Economic Systems Research, 1 (3), p.317

[2] P. Burley, 1993: Lonergan as a Neo-Schumpeterian, (Lanham, Md., Australian Lonergan Workshop, University Press of America, ed. William J. Danaher)

[3] Burley, P. and Csapo, Laszlo, (1992) Money Information in Lonergan-von Neumann Systems, Economic Systems Research, Vol 4, No. 2, 1992

[4] Burley, P. (1992) Evolutionary von Neumann Models, Journal of Evolutionary Economics 2 , 269-80

[5] Burley, P. (2002), A 3-Level Lonergan-von Neumann Model, Australian Lonergan Workshop 2, ed. Matthew C. Ogilvie and William J. Danaher, Sydney: Novum Organum Press 68-74

[6] Burley, P. (2002), Lonergan and Interest Rates, Australian Lonergan Workshop 2, ed. Matthew C. Ogilvie and William J. Danaher, Sydney: Novum Organum 61-67

These von Neumann models add perspective and aid understanding. Burley provides an image of a stepped line graph, which is complementary to a.) Lonergan’s “baseball diamond” – two monetary circuits connected by crossovers – of dynamic monetary transfers and b.) Lonergan’s quasi-“logistic” functions of surplus and basic accumulations.

On this website we will review in some detail essays numbered [4] and [6] above

Editors of CWL 15

The editors of CWL 15, Frederick G. Lawrence, Patrick H. Byrne, and Charles C. Hefling, Jr., undertook the task of compiling Lonergan’s Functional Macroeconomic Dynamics from his 1944 essay, Essay in Circulation Analysis and the handouts of a seminar called Macroeconomics and the Dialectic of History, taught at Boston College in the years 1978-1982. They have done admirable work. In particular, in CWL 15 their Editors’ Preface and Editors’ Introduction plus that book’s  Appendix: History of the Diagram, 1944-1998 are required reading if one is to appreciate the development of Lonergan’s ideas and the historical context of his essay. The historical context is critical for first suspecting, then understanding that Lonergan discovered a new paradigm and revolutionized macroeconomics.

To indicate to the serious reader the editors’ helpfulness in placing Functional Macroeconomic Dynamics in its historical and theoretical context, we list here the headings of their Preface and Introduction to Lonergan’s Macroeconomic Dynamics (CWL 15):

Editors’ Preface, Charles C. Hefling, Jr. / xi

Editors’ Introduction, Frederick G. Lawrence ; xxv

  1. Lonergan’s Entry into Economics, 1930-1944 / xxvi
  2. Democratic Economics: An alternative to Liberalism and Socialism / xxxii
    1. Liberalism and Socialism as Economistic Ideologies / xxxv
    2. Free Enterprise as an Educational Project
  3. Lonergan’s Reentry into Economics, 1978-1983 / xxxix
  4. Lonergan’s Interlocutors in Economics / xliii
    1. Lonergan and Marx / xlvi
    2. Lonergan and Marshall / xlvii
    3. Lonergan and Keynes / xlviii
    4. Lonergan, Kalecki, and Others / li
    5. Lonergan and Schumpeter / li
  5. Macroeconomic Dynamic Analysis as a New Paradigm of Economic Theory / liv
  6. The Systematic Significance of the Fundamental distinction between Basic and Surplus Production and Exchange
    1. Profit / lxiii
    2. Interest / lxvii
    3. Lonergan’s Critique of ‘Supply-Side’ and ‘Demand-Side’ Economics / lxvii
  7. Lonergan’s Critique of Secularist Ideologies: The Need for a Theological Viewpoint / lxix


Thank you to the University of Toronto, the Estate of Bernard Lonergan, and Philip McShane for allowing me to quote liberally from their publications.  And a special thanks to Jeremy Wilkins for his assistance in securing the permissions from the University and the Estate..

Thanks also to Fan Stanbrough of BBDS Design for her invaluable assistance in constructing this website.

Finally, thank you to my wife and best friend, Cheryl, for providing blocks of solitude in which I have worked on this website.

John Costello

[1] Burley’s CV and Publications are provided elsewhere on this website at (URL)