Author Archives: Functional Macroeconomic Dynamics

Lonergan’s Laws of Economic Motion

Newton’s Laws of Motion are laws of efficient cause.  In brief:

  • A body at rest or in uniform motion remains at rest or in uniform motion unless acted upon by an(external, efficient-causal) force
  • F = ma; force equals mass times acceleration
  • When one object exerts a force on a second object, the second exerts an equal and oppositely directed force of equal magnitude on the first. (Continue reading)

Contents of CWL 15, Macroeconomic Dynamics: An Essay in Circulation Analysis

We have previously encouraged all to read in CWL 15, Macroeconomic Dynamics: An Essay in Circulation Analysis, both the Editors’ Preface, by Charles C. Hefling, JR./xi, and the Editors’ Introduction, by Frederick G. Lawrence/xxv.  (Click here and here for 8/1/19 Brief Item and here)

Below we simply print the Contents headings of CWL 15.  The reader will note that the headings do not resemble very much the chapter headings one might find in a conventional macroeconomics textbook.  That is because Lonergan applied a radically different, scientific, dynamic heuristic to macroeconomics, and he put his questions in the right order.  He used precise analytic distinctions and implicit definition to achieve explanation in terms of dynamic, interdependent functionings. He achieved a radically different field theory of the economic process.  As a scientist he reached explanation by the way of analysis, and as a teacher he presented his discovery by the way of synthesis.  Thus he has been able to lead readers to understand his revolutionary Modern Macroeconomic Field Theory.

CWL 15, Contents

  • General Editors’ Preface, Frederick E. Crowe and Robert M. Doran/ix
  • Editors’ Preface, Charles C. Hefling, JR./xi
  • Editors’ Introduction, Frederick G. Lawrence/xxv
  • Acknowledgments/lxxiii
  • Preface/3
  • Summary of the Argument/ 5

Part One/7

  • 1 Analysis /7
  • 2 Economic Process/ 12
  • 3 Significant Basic Variables/14
  • 4 Circulation Analysis/16
  • 5 Procedure/17
  • 6 The Productive Process/23
  • Additional Note to Section 6  /22
  • 7 Division of the Productive Process/23
  • 8 The Basic Stage of the Productive Process/28
  • 9 The Surplus Stage/31
  • 10 Cycles of the Productive Process/35
  • 11 A Technical Restatement/36
  • 12 Classes of Payments/38
  • 13 Rates of Payment and Transfer/45
  • 14 Diagram of Rates of Flow/55
  • 15 Circuit Acceleration (I)/56
  • Appendix to Section 15/65
  • 16 Circuit Acceleration (II)/68
  • 17 Measuring Change in the Productive Process (I)/70
  • 18 Phases in the Productive Process/75
  • 19 Mistaken Expectations/80
  • 20 Misadventures/82
  • 21 Methodological Shifts/86
  • 22 The Position of This Essay/91

Part Two/97

  • Healing and Creating in History/97

Part Three/107

  • 23 Measuring Change in the Productive Process (II)/107
  • 24 The Cycle of the Productuve Process/113
  • Additional Note to Section 24: The Pure Cycle/120
  • 25 Price and Quantity Changes in Accelerating Circuits/128
  • Additional Note to Section 25: The Phases in Circuit Acceleration – A Technical Statement/130
  • 26 The Cycle of Basic Income/133
  • 27 The Cycle of Pure Surplus Income/144
  • 28 The Cycle of the Aggregate Basic Price Spread/156
  • 29 Superposed Circuits/162
  • 30 The Balance of Foreign Trade/165
  • 31 Deficit Spending and Taxes/173
  • Appendix: History of the Diagram, 1944-1998, Patrick H. Byrne/177
  • Glossary of Symbols/203
  • Index/215

The Wise Person Puts Questions In Their Right Order

In any analysis there is a right order of questions; and to violate this order is to invite misunderstanding, myth, and disaster.  To indicate the wisdom in Lonergan’s analysis, we present excerpts, mainly from his CWL 12,  which mandate clearly, for himself and for us, that one’s method and one’s heuristic necessitate putting questions in their right order.  The precepts apply whether one is doing physics, economics, philosophy or theology. Continue reading

The Mechanical Structure is a Pattern of Laws (Brief Item #85)

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]  [#85] (Click here for previous “Single Paragraphs” or “Brief Items”)

In Macroeconomic Science, Beware Sentimentalism Lacking Intelligence (Brief Item #84)

[7/2/20] 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 (but secret police surveil and labor camps terrify), a dictatorship of the Herrenvolk in which the Volk obeys the Fuhrer.  But if that idealism can be brought to learn the discipline of logic and of scientific reflection, then it will impose a generalization of the exchange economy.  To determine the nature of such a generalization is the aim of this inquiry; but at once this is at least evident.  The vast forces of human benevolence can no longer be left to tumble down the Niagara of fine sentiments and noble dreams.  They have to be assigned a function and harnessed within the exchange system, for in no other way can that system shake off its fictitious fetters to move consistently towards its maximum. [CWL 21, 36]

generalization will … move to a higher synthesis that eliminates at a stroke both the problem of (insufficient basic incomes) and the complementary problem of (workers’ misinterpretations); it will attack at once both the neglect of economic education and the blare of advertisements leading the economically uneducated by the nose; it will give new hope and vigor to local life, and it will undermine the opportunity for peculation (embezzlement) corrupting central governments and party politics; … [CWL 21, 36-37] [84]

(Click here for previous “Single Paragraphs” or “Brief Items”)


Lonergan, Marx, and Liberty

This section, Lonergan, Marx and Liberty, is presented simply in the form of a gathering of excerpts from different sources. The careful reading of the excerpts should inspire the reader to consult the sources for the rich context of each excerpt and for a fuller appreciation of Lonergan’s understanding and reasoning about the need for liberty. In brief, Lonergan demonstrates that Marx’s economics is insufficiently abstract and 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 mythical macroeconomics. (Continue reading)