Author Archives: Functional Macroeconomic Dynamics

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Heuristic ⇒ Method ⇒ Discovery ⇒ Formulations ⇒ Coherent Hypothesis and Theory ⇒ Verification ⇒ Implementation

.1.  Science is explanation of phenomena by implicit formulas wherein the relations define the terms, the terms define the relations, and insight fixes both.  All relations are coherent – of terms with terms and formulas with formulas – with one another so as to comprise a complete theory.

.2.  Insights yield terms related to one another; thus, properly representative terms in their relations may qualify as possible explanatory conjugates.

.3.  A heuristic states the goal of a search.  A method is the process or procedure which leads to a goal.

.4. Generalization is needed to unify and supersede the scattered insights of Establishment Economics. (Continue reading)

The Animal Organism and the Economic Organism

CONTENTS:

  1. THE STUDY OF ORGANISMS – ANIMAL AND ECONOMIC
  2. DETERMINISM AND INDETERMINISM – DISAGREEING WITH EINSTEIN
  3. CORRESPONDENCE IN THE CURRENT BASIC DYNAMIC, ORGANIC PROCESS; A DETERMINATE ALGEBRAIC FUNCTION OF THE FIRST DEGREE
  4. CORRESPONDENCE IN THE SURPLUS DYNAMIC, ORGANIC PROCESS; AN INDETERMINATE POINT-TO-LINE CORRESPONDENCE
  5. AVOIDING A VICIOUS CIRCLE OF CRITICISM
  6. THREE IMPLICITLY-DEFINED CIRCULATORY ORGANS
  7. THE TRANSITION TO SYSTEMATIZATION
  8. THE ROLE OF MIND IN THE DEVELOPMENT OF THE HUMAN AND THE ECONOMIC ORGANISMS

 .1. THE STUDY OF ORGANISMS – ANIMAL AND ECONOMIC:  (Continue reading)

 

Catherine Blanche King’s Comments

I quoted Catherine King in the very first line of my previous blog.

Functions are not seen, but must be understood. (Catherine Blanche King, private communication)

I am grateful to Catherine for responding with valuable comments providing needed context to the quote.  Herewith, her comments:

Hello John:

Glad to hear from you.

About that quote, it’s really brief but probably needs to be in some contexts at least.

But the underlying issue is one of an already-learned idea about opening our eyes and seeing, and then wrongly equating that common activity with what happens when we understand.  The more nuanced point, then, is that we do sense, but also that WHAT we sense we also ask about . . . so that the wrong-view that seeing equates to understanding can give way to the right view that wonder, questioning, and then having insights is what gives way to understanding and then even to knowing.

But the fundamental issue is to understand that the sensible, and much more, is also intelligible; and that we understand that intelligibility through intelligent process.

Just knowing that intellectually, however, is only a beginning to changing one’s already-set but erred viewpoint, which is usually set in our childhood . . . so it takes a good amount of thought to unearth that view and to experience change at the luminous core of our understanding.

As always, good luck and good insights as you undergo your work.

Catherine

Functions Are Not Seen, But Must Be Understood

Functions are not seen, but must be understood. (Catherine Blanche King, private communication)

A systematic explanation, then, requires a normative theoretical framework.  The basic terms and relations of such a framework would specify the distinctions and correlations that articulate the causes, which are not necessarily visible, of events that are apparent to all.  (CWL 15,  Editors’ Introduction, lv) (Continue reading)

Three Displays of the Diagram of Rates of Flow

We print three displays of the same Diagram of Rates of Flow, AKA the Diagram of Interdependent Velocities.  The second and third displays simply suggest that the serious reader must keep in mind certain precepts as he/she seeks to achieve a new paradigm and a new framework for macroeconomic dynamics. Continue reading

The Principle of Concomitance: The Foundation of Equilibrium and Continuity

Concomitance is, I would claim, the key word in Lonergan’s economic thinking. [Philip McShane, [Fusion 1, page 4 ftnt 10]

Recall that the subtitle of CWL 15 is “An Essay in Circulation Analysis”.  It is by virtue of concomitance that continuity and equilibrium are achieved so as to constitute an orderly process of circulations.  (Continue reading)

Explaining “Present Fact”: An Ever-Varying Process; A Never-Varying Systematics

The economic process is always the current, purely-dynamic, concrete functioning. The analysis of the dynamic process is always relevant to the present fact. The immanent intelligibility of such a dynamic, ever-varying process may itself be an invariant; i.e. though the differentials may change in magnitude, the relation of the differential velocities and accelerations among themselves is invariant.  So it is in the case of dynamic pendular motion, elliptic motion, the variables of electromagnetic phenomena, and in the dynamic economic process.  The general laws of the process are applicable in any instance.  These primary, abstract, general, field-theoretic laws may be applied to whatever may be the secondary determinations from the concrete non-systematic manifold.  Thus we can get the particular law explaining the particular concrete process under investigation.

The overall economic functioning has an objective immanent intelligibility.  This intelligibility is an invariant – a set of differential equations which implicitly define the explanatory, conjugate, differentials of the dynamic process. The explanatory terms are abstract functions defined by their functional relations to one another. In the implicit equations, the terms define the relations and the relations define the terms, and insight fixes both. And the equations cohere with one another to constitute a fully-explanatory field theory.

The point-to-line and higher correspondences are based upon the indeterminacy of the relation between certain (surplus) products and the (later ultimate basic) products that (exit the process and eventually) enter into the standard of living. … the indeterminacy is very much a present fact.  One has to await the future to have exact information.   And while estimates in the present may be esteemed accurate, the future has no intention of being ruled by them: owners do not junk equipment simply because it has outlasted the most reliable estimates; nor are bankrupts kept in business because their expectations, though mistaken, are proved to have been perfectly reasonable.  The analysis that insists on the indeterminacy is the analysis that insists on the present fact: estimates and expectations are proofs of the present indeterminacy and attempts to get round it; and, to come to the main point, an analysis based on such estimates and expectations can never arrive at a criticism of them; it would move in a vicious circle.  It is to avoid that circle that we have divided the process in terms of indeterminate point-to-line and point-to-surface and higher correspondences. [CWL 15, 27-28]

in the long run, and especially in the very long run, such a correlation exists.  It is that surplus production is the accelerator of basic production.  In other words the correspondence between the two is not a point-to-point but a point-to-line correspondence; … Now such a correspondence, if it is to be expressed not in terms of expectations of the future but in terms of present fact, is a correspondence of accelerator to accelerated. … If the system is to move into a long-term expansion, this movement has to begin with a surplus quantity acceleration: surplus production has not merely to maintain or renew existing capital equipment but has to reach a level at which it turns out new units of production and maintains or renews a greater number of existing units; this gives the quantity surplus expansion. [CWL 21, 132]

(there is to be discerned a threefold process in which a basic stage is maintained and accelerated by a series of surplus stages, while the needed additions to or subtractions from the stock of money in these processes is derived from the redistributive area) … The maintaining of a standard of living is attributed to a basic process (distinct process 1), an ongoing sequence of instances of so much every so often.  The maintenance and acceleration (distinct process 2) of this basic process is brought about by a sequence of surplus stages, in which each lower stage is maintained and accelerated by the next higher.  Finally, transactions that do no more than transfer titles to ownership are concentrated in a redistributive function, whence may be derived changes in the stock of money (distinct process 3) dictated by the acceleration (positive or negative) in the basic and surplus stages of the process. … So there is to be discerned a threefold process in which a basic stage is maintained and accelerated by a series of surplus stages, while the needed additions to or subtractions from the stock of money in these processes is derived from the redistributive area. … it will be possible to distinguish stable and unstable combinations and sequences of rates in the three main areas and so gain some insight into the long-standing recurrence of crises in the modern expanding economy. [CWL 15, 53-54]

A Lonergan Sampler

This Sampler will be supplemented as time allows, but I want to publish now to a) demonstrate the breadth and depth of the knowledge that Lonergan brought to Macroeconomic Dynamics, and b) inspire readers to compare their perspective to his.  His thinking ranged over mathematics, natural science, method, history, philosophy, theology, and art.

CWL 3, Insight: A Study of Human Understanding

Now the principles and laws of a geometry are abstract and generally valid propositions. Continue reading

Theorems of “Continuity” in Macroeconomic Dynamics

Because he was so expert in math, science, and scientific method, Lonergan’s early thinking in Macroeconomics in CWL 21 was more abstract, more general, and more advanced even than the thinking found in the Macroeconomics textbooks of today.  His thinking continued to develop into the explanatory systematics of CWL 15.  Here, two brief excerpts from the earlier CWL 21. Continue reading