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 laws of 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 scientific Macroeconomic Field Theory, also called Functional Macroeconomic Dynamics, is different from the mere commonsense compilation of descriptive accounting aggregates called Gross Domestic Product. Continue reading
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 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
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 intelligibility of 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
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)
We hope to inspire serious graduate students of economics a) to seek and achieve an understanding of “Macroeconomic Field Theory,” b) to verify empirically 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
In the first section .I., we’ll list a) a ranking or scale of preferences of meanings and values within the ecology in which humans live, b) money’s values from different points of view, and c) an ordered hierarchy of economic activity. In the second section .II., we’ll add detail to that scale of preferences and situate money’s values and the ordered hierarchy within the scale. Finally .III., we’ll display excerpts to point readers to original sources. One might find this outline useful when reading A Must-Read: Fred Lawrence, “Money, Institutions, And The Human Good”: An Ordered Perspective Distinguishing Social and Monetary Values. Lawrence points out that Lonergan properly clarifies the concept of exchange value in a free exchange process so as to destroy with a single stroke the mistaken concepts of Adam Smith, John Locke, David Ricardo, and Karl Marx.
Not only do feelings respond to value. They do so in accord with some scale of preference. So we may distinguish vital, social, cultural, personal, and religious values in an ascending order. (CWL 14, 31-2/32-3) (Continue reading)
On Saturday, 12/19/ 2020, John Cochrane‘s blog “Bisin on MMT Rhetoric” cited Alberto Bisin’s review of Stephanie Kelton’s Book “The Deficit Myth. “ Alberto Bisin contends, as do we, that So-Called Modern Monetary Theory, as espoused by Kelton and others, does not qualify as a theory. Cochrane quotes Bisin:
The book should be seen as a rhetorical exercise. Indeed, it is the core of MMT that appears as merely a rhetorical exercise. As such it is interesting, but not a theory in any meaningful sense I can make of the word. The T in MMT is more like a collection of interrelated statements floating in fluid arguments. Never is its logical structure expressed in a direct, clear way, from head to toe.
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 current pandemic calls for extraordinary measures.
Unwittingly, first out of ignorance and recently as necessitated by a pandemic, some nations, including the U.S., are wandering into the ultimate menace to the financial system, the spending without constraint blessed and recommended by unscientific 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)
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)