Functions are

not seen, but must beunderstood. (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)

# Category Archives: Functions

# Only Lonergan

Lonergan is alone … Only Lonergan … Continue reading

# Lilley and Rogoff Recommending Negative Interest Rates

We are commenting with respect to Andrew Lilley and Kenneth Rogoff’s “**conference draft” **discussing the advisability of a FRB policy of negative interest rates:

** **Lilley, Andrew and Kenneth Rogoff, April 24, 2019: **“The Case for Implementing Effective Negative Interest Rate Policy”** (*Conference draft for presentation at Strategies For Monetary Policy: A Policy Conference*, the Hoover Institution, Stanford University, May 4, 2019, 9:15 am PST) **[Lilley and Rogoff, 2019] **(Continue reading)

# A McShane Sampler Relevant to Functional Macroeconomic Dynamics

Philip McShane had a strong background in mathematics and theoretical physics; thus he was able to understand the scientific significance of Bernard Lonergan’s **macroeconomic** **field theory** in an **Einsteinian context**.

First we display, in brief, key excerpts, many of which contain analogies from physics and chemistry, relevant to the science of Functional Macroeconomic Dynamics; then we show the same excerpts more fully within lengthier quotes. Continue reading

# Theoretical Breakthroughs of Euclid, Newton, Hilbert, Einstein, and Lonergan

To help the reader gain an appreciation of Lonergan’s achievement of **Modern Macroeconomic Field Theory** we will, in each section, print leading excerpts, then highlight the key concepts of those excerpts. We will comment on the historically-significant advances in geometry of Euclid and Hilbert, in physics of Newton and** **Einstein, and in macroeconomics of Lonergan.

- Euclid’s great achievement was his rigorous
**deduction**of geometry. - Hilbert’s great achievement was his employment of
**implicit definition**to reorder Euclid’s geometry. - Newton’s two great achievements were unifying the isolated insights of Galileo and Kepler into a
**unified system**of mechanics and his invention of the calculus. - One of the great achievements of Einstein was the invention of the
**field theories**of Special Relativity, General Relativity, and Gravitation. - One of Lonergan’s
**several**great achievements was his**systematization**of macroeconomic phenomena in his**Modern Macroeconomic Field Theory.**He combined the technique of**implicit definition**introduced by Hilbert and the concept of a**field theory**developed by Faraday and Einstein; and he developed an**explanatory macroeconomics**, which is**general, invariant, and relevant in any instance**.**(Continue reading)**

# Elements of The Analysis

**Our aim is to prescind from human psychology** that, in the first place, we may define the **objective situation **with which man has to deal, and, in the second place, define the **psychological attitude that has to be adopted** if man is to deal successfully with economic problems. Thus something of a **Copernican revolution** is attempted: **instead of taking man as he is or as he may be thought to be** and from that deducing what economic phenomena are going to be, **we take the exchange process in its greatest generality** and attempt to deduce the **human adaptations** necessary for survival. [CWL 21,42- 43]

Taking into account past and (expected) future values does not constitute *the creative key transition to dynamics**.*Those familiar with elementary statics and dynamics will appreciate the shift in thinking involved in passing **from equilibrium analysis…to an analysis where attention is focused on second-order differential equations****,** on d^{2}θ/dt^{2}, d^{2}x/dt^{2}, d^{2}y/dt^{2}, on a range of related forces, central, friction, whatever….. **What is significant is the Leibnitz-Newtonian shift of context**. [McShane 1980, 127]

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]

again, as to the **notion of cause**, Newton conceived of his forces as efficient causes, and the **modern mechanics drops the notion of force**; it gets along perfectly well without it. It thinks in terms of a **field theory**, the set of relationships between *n***objects**. The field theory is **a set of intelligible relations linking what is implicitly defined by the relations themselves; it is a set of relational forms**. **The form of any element is known through its relations to all other elements.** What is a mass? A mass is anything that **satisfies the fundamental equations** that regard masses. Consequently, when you add a new fundamental equation about mass, as Einstein did when he equated mass with energy, you get a new idea of mass. **Field theory is a matter of the immanent intelligibility of** **the object**. [CWL 10, 154]

# Modern Monetary Theory Fails to Qualify as Scientific Macroeconomics

Scientific macroeconomics, if it is to be genuinely scientific, must not be contaminated by human psychology. Gustav Kirchhoff’s **laws of the electric circuit** do not incorporate the psychology of the human who operates the levers or switches. So, Lonergan, the scientist, strove to discover the **purely relational, purely functional** **laws of the circuits** of the objective economic process. Unfortunately, many proponents of Modern Monetary Theory exhibit sentiments and inclinations favoring a totalitarian bureaucracy for the management of fiscal and monetary affairs. Their purported science contains some valid assertions, but is not a coherent set of **objective laws** to which participants must adapt, regardless of sentiment; rather MMT is an admixture of several ideological and psychopolitical sentiments transformed into a contaminated set of mandates for the management of fiscal and monetary affairs. The tenets of MMT fail to constitute a fully explanatory theory of macroeconomic dynamics. (to continue reading, click here)

# Harvard Magazine’s Podcast, “Ask a Harvard Professor”

**Harvard Magazine’s podcast, “Ask a Harvard Professor,” **recently featured an interview of professors Doug Elmendorf and Karen Dynan – two good people – under the title **Doug Elmendorf and Karen Dynan: How Much Can the Federal Budget and the Deficit Continue to Grow?** (Click here for video and print versions of the interview)

# Explanation By Gross Domestic Functional Flows To Supplement Description By Gross Domestic Product

A distinction has been drawn between description and explanation. Description deals with things as related to us. Explanation deals with the same things asrelated 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 Superior and Far Less Expensive Macroeconomics Textbook

A very expensive macroeconomics textbook, having 700-1000 pages, would contain a lot of interesting history, a lot of fuzzy psychology, unscientific analysis, and uncertain conclusions. A reader would not gain a **clear theory **and **complete explanation **of the **dynamics** of the real economic process. However, is there not a superior 228-page, far less expensive textbook right in our hands? How about this? **Reword the subtitle** of **CWL 15** from *An Essay in Circulation Analysis *to * A Textbook of Circulation Analysis, *and let the professor instruct the serious student to read the book three times, then report back to discuss the following:

- the
**canons**of empirical method - a
**scientific, dynamic heuristic** - the technique of
**implicit definition;**explanatory terms**defined by the functional relations**in which they stand**with one another** **velocitous functional unities**of**scientific and explanatory significance**replacing the BEA’s descriptive, commonsense, accountants’ unities- the structure of the
**lagged, rectilinear**productive process **money as a dummy**invented by man- the perspective of a
**hierarchical series**of**monetary circuits** - how a
**monetary circulation**meets the rectilinear production-and-vending process - the
**primary relativities and concomitance**in the Diagram of Rates of Flow **dynamic equilibrium**replacing**static Walrasian general equilibrium**- the
**velocity of money**in terms of**magnitudes and frequencies** **prices are not a given**and**not requiring explanation**; rather prices are**in need of explanation**- interpretation of prices, quantities, interest rates in the light of
**significant explanatory variables** - the pure cycle and its
**constituent phases**in the expansion of the objective economic process - the
**abstract****primary relativities**and**concrete secondary determinations**in the expansion of the economic process - the
**statistical residue**and why**prediction is impossible**in the general case; predicting**weather**vs. predicting**planetary motion** - the significance of
**investment’s monetary correlate** - the
**ineptitude**of manipulating interest rates - the
**explanation**of government and foreign-trade imbalances by the dynamics of**superposed circuits** - the distinction between
**efficient cause**and**formal****cause** - distinguishing between
**self-healing**and the effect of interventions - the intelligibility and explanatory power of the
**basic price-spread ratio** - Figures 14-1, 24-7, and 27-1 in CWL 15

The student would learn much that is radically different, explanatory, and very useful; and he/she would gain a perspective or framework by which to evaluate and criticize the flawed premises and tenets of conventional textbooks and traditional theories.