Category Archives: Methodology

Commonsense Economics vs. Scientific Economics

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

Conflicting Ways Of “Viewing” The Objective Economic Process

Click on the topic desired.

.1. Lonergan’s “Macroeconomic Field Theory” (MFT), AKA “Functional Macroeconomic Dynamics” (FMD)

.2. Marxism

.3. Modern Monetary Theory Quackery (MMQ)

.3.1. Stephanie Kelton’s “The Deficit Myth”

.4. Establishment Economics

.5. Commonsense Economics vs. Scientific Economics

 

A Lonergan Sampler

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 usExplanation 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

Principles of Macroeconomics

N. Gregory Mankiw’s two textbooks – Principles of Microeconomics (Fourth Edition, 2007) and Brief Principles of Macroeconomics (Fifth Edition, 2009) – have their first chapter entitled “Ten Principles of Economics.” The first four of the ten principles deal with the concept of efficient cause consisting in the subjective psychology of human participants as they make microeconomic decisions about their personal economic well-being. In contrast, Lonergan’s Macroeconomic Dynamics: An Essay in Circulation Analysis (1999) first treats the objective macroeconomic situation to whose laws the psychological participants must adapt in the conduct of their lives.  Lonergan seeks the immanent macroeconomic intelligibility of the objective system of production and exchange.  Both Mankiw and Lonergan deal intelligently in the micro and macro realms. Lonergan seeks to treat “first thing first.” Continue reading

The Animal Organism and the Economic Organism

CONTENTS:

  1. THE STUDY OF ORGANISMS – ANIMAL AND ECONOMIC
  2. DETERMINISM AND INDETERMINISM – DISAGREEING WITH EINSTEIN
  3. CORRESPONDENCE IN THE CURRENT BASIC DYNAMIC, ORGANIC PROCESS; A DETERMINATE ALGEBRAIC FUNCTION OF THE FIRST DEGREE
  4. CORRESPONDENCE IN THE SURPLUS DYNAMIC, ORGANIC PROCESS; AN INDETERMINATE POINT-TO-LINE CORRESPONDENCE
  5. AVOIDING A VICIOUS CIRCLE OF CRITICISM
  6. THREE IMPLICITLY-DEFINED CIRCULATORY ORGANS
  7. THE TRANSITION TO SYSTEMATIZATION
  8. THE ROLE OF MIND IN THE DEVELOPMENT OF THE HUMAN AND THE ECONOMIC ORGANISMS

 .1. THE STUDY OF ORGANISMS – ANIMAL AND ECONOMIC:  (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)

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

Zephyrs and Pandemics

Functional Macroeconomic Dynamics acknowledges and affirms a non-systematic manifold of secondary determinations (such as prices and quantities), a Canon of Statistical Residues, and the impossibility of prediction in the general case.  However, FMD affirms the existence of both human intelligence and the abstract, primary, immanent intelligibility of the objective, dynamic economic process.  It is this abstract, primary, immanent intelligibility by which the process must always be understood so as to be properly managed.

Knocking a pendulum slightly out of its existing oscillation does not necessitate a search for a new theory of the pendulum in order to correct the mishap.  The abstract theory of the pendulum in Newtonian mechanics still applies; the abstract intelligibility of the pendular motion is always relevant, in any instance, in any configuration of initial angle and initial velocity.  The theory still applies, though the motion may be on a new basis determined by new initial conditions or boundary values. 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 d2θ/dt2, d2x/dt2, d2y/dt2, 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 formsThe 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]