The heart of the normative theoretical framework that can **actually explain** business and trade cycles is what (Lonergan) calls the **‘Pure Cycle’** (§10, §24, 114). This cycle **generalizes** into clearly articulated relationships the **ideal phases characteristic of major economic transformations** as they depart from a stationary phase and move through phases first of surplus expansion and then of basic expansion, only to return to a new stationary phase. … (CWL 15, Editors’ Introduction, lxiii) (Continue reading)

# Category Archives: Implicit Definition

# Field Theory in Physics and Macroeconomics

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)

# All the Concepts Tumble Out Together [Brief Item #76]

[2/12/20] (In) 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. If one grasps the necessary and sufficient conditions for the perfect roundness of this imagined plane curve, then one grasps not only the circle but also the point, the line, the circumference, the radii, the plane, and equality. **All the concepts tumble out together**, because all are needed to express adequately a single insight. All are coherent, for coherence basically means that all hang together from a single insight. [CWL 3, 12/36]

… it will be well at once to draw attention to J.A. Schumpeter’s insistence on the **merits of the diagram** as a tool. (Schumpeter, *History* 240-43, on the Cantillon-Quesnay tableau.) … First, there is the tremendous simplification it effects. From **millions of exchanges** one advances to **precise aggregates**, relatively few in number, and hence **easy to follow up and handle**. … Francois Quesnay’s *tableau economique*. … was the first to make explicit the concept of economic **equilibrium**. All science begins from particular correlations, but the **key discovery** **is** **the interdependence of the whole.** … the diagram (of the interconnections of a few precise aggregates) has compensating features that Quesnay’s system of simultaneous equations may imply but does not manifest. [CWL 15, 53 and 177]

To understand how the system of **interdependent monetary circulations** meets the system of production and exchange **is to understand how the economy works**. It is to grasp **all the production and monetary concepts** together in **a single coherent set of relations**. It is to see all the **dynamic interactions** of the current dynamic process** in a single view**, or better, to **understand explanatory macroeconomics in** **a single comprehensive act of understanding**. “All science begins from particular correlations, but the **key discovery** **is** **the interdependence of the whole.”**

… once initial difficulties are overcome and basic insights are reached, the investigation approaches a supreme moment when **all data suddenly fall into a single perspective**, …. [CWL 3, 47/71]

More positively, the channels account for **booms** and **slumps**, for **inflation** and **deflation**, for changed rates of profit, for the attraction found in a favorable balance of trade, the relief given by deficit spending, … [CWL 15, 17] [#76] **(Click here for previous “Single Paragraphs” or “Brief Items”)**

# FMD’s Take on Greg Mankiw’s Take on Modern Monetary Theory

**Contents:**

- .I. Introductory
- .II. The “legal” basis of our criticism; the “laws” of the process
- .III. Key objections to Modern Monetary Theory
- .IV. Observations re “A Skeptic’s Guide to Modern Monetary Theory”
- .V. Why and how the Basic Expansion fails to be implemented
- .VI. Addendum #1: Primary relativities of the economic process
- .VII. Addendum #2: Excerpts re the drift to totalitarianism

# Walras’s System Lacks Dynamic Significance [Brief Item #75]

[2/10/20] **Schumpeter, Walras**: While we agree with Schumpeter that Walras’s system implicitly includes the aggregates commonly considered in macroanalysis, (Walras’s system) can hardly be credited with distinctions between basic and surplus expenditure, receipts, outlay, income, and much less with an account of their various dynamic relations. But **until such distinctions are drawn and their dynamic significance understood**, the aggregates and relations cannot be **contained implicitly in any system**. [#75] [CWL 15, 91-92] **(Click here for previous “Single Paragraphs” or “Brief Items”)**

# Lonergan on the Foundations of the Theories of Relativity, by Patrick H. Byrne [Brief Item #74]

[2/8/20] **Albert Einstein, Bernard Lonergan**: In a paper recently presented before the Boston Colloquium of the History and Philosophy of Science, Prof. Max Jammer of Bar-Ilan University surveyed the history of the attempts to provide axiomatic (or conceptual) foundations for the **Special Theory of Relativity** (hereafter abbreviated as “STR”). Among other things, Prof. Jammer’s paper revealed that, in contrast to quantum mechanics, no generally accepted axiomatic foundations for STR have yet emerged. Furthermore, Jammer’s paper showed that several attempts at axiomatic foundations were beleaguered with problems not to be found in the use of the theory by Einstein or the successive generations of practicing physicists. ¶ The shortcomings of these efforts to develop axiomatic foundations for STR – and indeed of any parallel efforts directed towards the search for axiomatic foundations for the General Theory of Relativity as well – are, in my judgement, inherent in the theories themselves. That is, the proper foundations of the theories of relativity reside, not in conceptual axioms, but in the foundational reality of the subject as subject. It is not my purpose in this paper to enter into a detailed critique of the various attempts at axiomatization discussed in Prof. Jammer’s paper. Rather on this occasion celebrating the achievements of Bernard Lonergan, I simply intend to show how his phenomenological appropriation of the structure of consciousness has opened up the possibility of approaching the question of the foundations of the theories of relativity from the viewpoint of the subject as subject. Byrne, Patrick H. “Lonergan on the Foundations of the Theories of Relativity,” ** Creativity and Method**, Matthew Lamb (ed.), Milwaukee: University of Marquette Press, 1981, pp. 477-478 in pages 477-94. [#74]

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

# 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.