Abstraction is enriching. The relation of things to our senses must be transcended by abstraction; abstraction yields explanatory conceptsimplicitly defined by their functional relations to one another.
The commonsense accountingrelations constituting historical Gross Domestic Product must be supplemented by the abstract explanatory formulation of Current Gross Domestic Functional Flows. All participants must have the scientific guidance of a normative theory in order to properly adapt their personal conduct to the principles and laws of the objective process. (Continue reading)
I hope that this Sampler will 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 in regard to science and macroeconomics. His thinking ranged over mathematics, natural science, method, history, philosophy, theology, and art. This sampler is arranged in groups of excerpts from particular books of Lonergan. Scroll down to see the arrangement.
CWL 3, Insight: A Study of Human Understanding
“The most significant book of the twentieth century,” (Philip McShane)
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. … 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 concrete intelligibilityof Space is that it grounds the possibility of those simultaneous multiplicities named situations. The concrete intelligibility of Time is that it grounds the possibility of successive realizations in accord with the probabilities. In other words, concrete extensions and concrete durations are the field or matter or potency in which emergent probability is the immanent form of intelligibility. (CWL 3, 172) Continue reading →
Preliminary note: In this section we are addressing the proper understanding and management of the economic process in normal, non-pandemic times. We affirm that the recent pandemic called for extraordinary measures.
Unwittingly, first out of ignorance, more recently as necessitated by a pandemic, and most recently out of continuing ignorance, some nations, including the U.S., have wandered into the ultimatemenace to the financial system, the spending without constraint blessed and recommended by unscientific. so-called Modern Monetary Theory. (Click here and here) The systematic result of MMT’s unconstrained printing of money, unjustified by corresponding, concomitant production of goods and services, is rampant inflation in prices for a) goods and services and/or b) financial assets. (Continue reading)
In the ideal pure cycle, the long-term expansion proceeds from a static phase through a proportionate-expansion phase , then through a surplus-expansion phase, then through a basic-expansion phase, and finally into a higher static phase of greater abundance.
At (the beginning of a basic expansion) an economic system is confronted with an intrinsic test. Its success will be established if it can complete the major basic expansion and – without mishap, without inflation, without unemployment, without a break in confidence – make its way serenely into the haven of the stationary state. I mean of course, not the stationary state of mere backwardness, not the stationary state of stagnation when a disastrous crash follows on an earlier apparent triumph, but the stationary state that preserves all the gains of the preceding major expansions. It is (then) content to produce their gains at a constant rate. Its duration may be short or long, for in each case it must wait until such time as further new developments are grasped by human intelligence and eventually become practically conceived possibilities. [CWL 15, 80] (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)
A quote from [McShane, 2017, Preface xii]: “I have brought you face to face with the first page of the most significant book of the twentieth century.* … You are on the edge of the invention of the permanent science of econo-dynamics. What is your next move? Obviously, if you are an economist, you get moving towards a Nobel Prize.” Continue reading →
A sound theory is a good thing to keep around. Clerk-Maxwell’s electromagnetic theory and Kirchoff’s lawsof electric circuits are good systematics to consult when one is designing a system to deliver electricity. Similarly, when one is seeking to understand, affirm, and manage the economic process, a reliable, scientific macroeconomics, which both explains how the process actually works and yields norms for adaptation by human participants, is a good thing to have around.
Common sense is different from science. Common sense describes; science explains. Common sense relates things to us; science relates things to one another. And scientificMacroeconomic Field Theory, also called Functional Macroeconomic Dynamics, is different from the mere commonsense compilation of descriptive accounting aggregates called Gross Domestic Product. Continue reading →
We hope to inspire serious graduate students of economics a) to seek and achieve an understanding of “Macroeconomic Field Theory,” b) to verifyempirically Lonergan’s field relations, and c) to use the explanatory field relations as the basis of influential scholarly papers.
We trace developments
in physics from Newtonian mechanics to modern field theory, and
in economics from Walrasian supply-demand economics to purely relational, Modern Macroeconomic Field Theory.
Key ideas include a) abstraction and implicit definition as the basis and ground of invariance in both physics and macroeconomics, b) the concept of a purely relational field, c) immanent intelligibility and formal causality, and d) the canons of parsimony and of complete explanation. We highlight some key ideas: (continue reading)
4/7/2021: Yahoo Finance today featured an article by Julia La Roche entitled ‘The fault line is inequality’: J.P. Morgan’s Dimon calls for fixing America’s ‘self-inflicted’ problems.La Roche was reviewing the Public Policy section of Dimon’s 67-page Chairman and CEO Letter to Shareholders. Mr. Dimon seeks to end the nation’s self-infliction of problems threatening the culture, the economy and the polity. He particularly regrets “false arguments of fanatics, the certitude of ideologues and cycles of intolerance.” Continue reading →