Functional Macroeconomic Dynamics seeks not merely to “view” and describe the economic process; rather it seeks to understand and explain the process in order to provide norms of adaptation and systematic guidance to managers of the process. (Continue reading)
U.K. officials need to spend $38.60 plus shipping for Bernard Lonergan’s “Macroeconomic Dynamics: An Essay In Circulation Analysis.” To satisfy their obligation to the U.K. public, they must read, understand, and thus gain enlightenment from Macroeconomic Field Theory as to how the dynamic system of production, finance, and exchange actually works. What are its norms and what practicalprecepts does the explanation of the dynamic organic process yield to free people?
Also. they need to call a colloquium in which several economists lecture and present scholarly technical papers on Macroeconomic Field Theory to help all government officials understand their nation’s present problems, past mistakes, and future solutions.
U.S. officials at the Fed. the Treasury, and Congress should seek the same enlightenment; and bankers, money managers, and financial talk-show hosts should do the same. (Click here and here)
The macroeconomics textbooks feature three key macrostatic models, all three of which are sublated by the purely relational field theory called Functional Macroeconomic Dynamics. The textbooks’ three featured graphs are two momentary intersections of supply and demand curves plus the Phillips Curve correlation of unemployment and interest rates:
the intersection of the supply and demand curves at a certain price of goods and services (the macrostatic AD-AS model),
the intersection of the supply and demand curves at a certain interest-rate, rental-price of money (the macrostatic IS-LM model), plus,
the now-debunked Phillips Curve correlation of unemployment and interest rates.
The key elements grounding the discovery and formulation of the immanent, field-theoretic intelligibility of the organic, unified, whole economic system include: (Continue reading)
Lonergan demonstrates that Marx’s economics is insufficiently abstract and is contaminated by descriptive sociological and political categories; he finds Marx’s summons to class conflict perilous to humanity because it promotes and enforces a drift away from liberty to a totalitarianism culminating in the dreadful conditions of a no-escape “frontier, clear and firm indoctrination, controlled media of information, a vigilant secret police, and the terrifying threat of labor camps,” – all in the name of a mythicalmacroeconomics. (Continue reading)
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]
The analysis of the overall dynamic functioning, which we call in nominal terms the economic process, must seek the explanation of the process. It must seek the objective immanent intelligibility among the interdependent, dynamic “functionings” which altogether constitute the process. The functionings are rates of so much or so many every so often, and, thus, they are velocities. And the scientific analysis must be in terms of abstract, implicitly-defined, explanatory conjugates rather than in terms of the descriptive accountants’ unities of merely legal or proprietary entities called “firms.” (Continue reading)
… , positive or negative transfers (from the Redistributive Function) to basic demand (D’-s’I’) and consequent similar transfers (from the Redistributive Function) to surplus demand (D”-s”I”) belong to the theory of booms and slumps. (CWL 15, 64)
The channels of circulation replace the overall dominance claimed for general equilibrium theory, … More positively, the channels account for booms and slumps, for inflation and deflation, (CWL15, 17)Continue reading →
The Wall Street Journal of 4/18/ 2019 had a column entitled “Easy Money, Bad Decisions” by James Grant reviewing Andrew H. Browning’s book, The Panic of 1819. Grant related how the government’s financing of excessive expansion with careless loans led to panic and crisis.
“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) commonsenserealm 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 fix the 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.’ (See CWL 3 Insight 12/ 36-37) 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 dynamicnetwork of functional, mutually conditioning, and interdependent relationships of these rates to one another. [CWL 15, 26-27 ftnt 27]Continue reading →