Category Archives: Science and Explanation

A Scientific Normative Alternative Between Laissez-Faire Running Amok and Totalitarianism Featuring Controlled Media, Firm Indoctrination, the Threat of Labor Camps, and Servile Degeneracy

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Frederick Lawrence (Boston College) is a co-editor of Bernard Lonergan’s Macroeconomic Dynamics: An Essay in Circulation Analysis. (CWL 15)   Fred penned the Editors’ Introduction to that book. (Click here.) He also wrote an article entitled “Between Capitalism and Marxism: Introducing Lonergan’s Economics”.  Perspicacious economists in academe, government, and banking will benefit greatly from an immediate reading.  For access to the article now, please use the following simple path:

In your main search bar, enter JSTOR and press your Enter key.

Then, in the upper left, Click into the box “Search journals, books, images, and primary sources“.

Then, type into that box 40338243 and press your Enter key. That’ll do it. Continue reading →

Putting Questions and Answers in the Right Order

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Part I.  Introductory: Lonergan’s Wise Seriation of Ideas

In his serial arrangement of ideas in “Macroeconomic Dynamics: An Essay in Circulation Analysis’, Bernard Lonergan followed his own advice.  Unlike the authors of  establishment macroeconomics textbooks, he a) insisted on scientific explanation rather than mere description, b) distinguished between the analytic scientist’s order of analysis and discovery vs. the teacher’s order of synthesis and composition, and c) insisted on putting questions and answers in the right order.

… putting things in their right order is the special talent of the wise person, and so the wise person will start with the problem that is first in the sense (1) that its solution does not presuppose the solution to other problems, (2) that solving it will expedite solving a second problem, (3) that solving the first and second problems will lead right away to solving a third, and so on through all consequent connected problems. [CWL 12, 23]

Next, understanding is about principles.  A principle is defined as what is first in some order.  Therefore, it belongs to understanding to grasp the solution of that problem that is first in the order proposed by wisdom.  Since this order is such that solving the first means that the others are expeditiously solved, the understanding should be such as virtually to contain in itself the answers to the rest of the questions. [CWL 12, 23]

Lonergan distinguished between “the first movement” called “analysis” and the “second movement” called “synthesis.” Continue reading →

Bloomberg Wall Street Week: “Economics Has No Good Theory of Inflation.”

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This is a companion-piece to Facing Facts: The Ideal Of Constant Value Of The Currency vs. The Fact Of Inflation.  Please read both.

This past weekend, 11/4-5/2023, Cecilia Rouse, future President of The Brookings Institution, appeared on Bloomberg Wall Street Week with moderator, David Westin.  Under the pressure of scant time, they briefly, but inadequately, discussed the notion of a “theory of inflation.” It was opined that

“The reality is that in economics there’s not a fabulous theory and one theory of inflation.”

“…economics doesn’t have one solid and established theory of inflation.”

Also, commenting on the same topic, David mentioned that the Phillips Curve “correlation”, which is a staple of of the Fed’s thinking and decision-making, and which has been supposed by many economists to be a valid correlation of fluctuating wage rates and their resulting pressure on inflation with unemployment, has not been proven valid and reliable.  That is to say that its two main variables are not directly correlated and inextricably linked; that the supposed reliability is bogus; that no matter how often it is considered and bandied about internally among supposedly-expert economists and externally to the truth-seeking public, the Phillips Curve theory is simplistic, insufficiently nuanced, and has been debunked.

Lonergan’s Macroeconomic Field Theory is a comprehensive general theory. It has many aspects and relations, all of which can be grasped at once in a unified whole.  Also, this unified whole virtually and implicitly contains a set of terms and relations constituting a unitary theory of inflation.  So, obviously we disagree with the two opinions quoted verbatim above, but left hanging on Bloomberg Wall Street Week.

It is the viewpoint of the present inquiry that, besides the pricing system, there exists another economic mechanism, that relative to this (other) system man is not an internal factor but an external agent, and that the present economic problems are peculiarly baffling because man as external agent has not the systematic guidance he needs to operate successfully the machine he controls. [CWL 21, 109]

In the mid-70’s, economists were mystified by stagflation, the combination of stagnant production and rising prices. According to the Phillips Curve, the correlation of inflation with unemployment, stagflation should not happen. … the U.S. economy was experiencing the phenomenon of ‘stagflation’ – a clearly discernible overturning of the conventional economic wisdom about the tradeoff between inflation and unemployment so neatly expressed in the Phillips curve. So-called ‘Keynesian fine tuning onto the neoclassical track’ was not working; and forms of socialist planning only promised to deepen rather than resolve the anomalies of welfare economics. … (Lonergan) believed he had an explanation for what, in a statement from the essay we are editing, he described as a “situation – sometimes thought mysterious – in which consumer prices continuously inflate, new enterprise is evaded, unemployment becomes chronic, and despite inflation the value of stocks declines.” [CWL 15, Editors Introduction, xli]

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Greg Mankiw’s First-Year Seminar: The Economic Isms And Schools Need A General Explanatory Macroeconomic Theory Providing A Reliable Analytic Framework

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Part I – Introductory

Part II – List of questions relevant to the contents of Greg Mankiw’s First-Year Seminar

Part III – Repeating of the questions plus excerpts relevant to  each specific issue

Part I – Introductory

Greg Mankiw’s Blog, dated 9/11/2023, and  titled “This Year’s First-Year Seminar” (Click here) referred to his article in the New York Times, dated 9/10/2017, and titled “Getting Along by Getting Together.”  Please read Greg’s article. (Click here)

The 2017 article summarized the readings of that year’s similar seminar and Greg’s stated  purpose in teaching the course.  He is to be commended for his effort to get people of different economic “persuasions” to get along with one another. (Continue reading)

Wouldn’t It Be Good If There Were A Scientific, Functional, Macroeconomic Dynamics On Which All Could Agree?

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Wouldn’t it be good if there were a scientific Functional Macroeconomic Dynamics on which all could agree?

See on this website under Five Images : Sublation of “Schools” of Macroeconomics.

Also see Subsumption and Sublation of Keynes, Kalecki, Solow and others:

 

Independent Circulation Analysis, A Better Way to Handle Many Economic Issues

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One can labor studying particular relations of particular economic situations with the textbook tool kit of a  snapshot economics without the slightest suspicion that these situations are merely particular cases needing to be explained by a more general theory of the dynamic process.   On the other hand, one can attempt an independent, more general circulation analysis, in which the formation of concepts, the choice of postulates, and the seriation of deductions are dictated … by the more immediate and germane consideration of the correlations among the dynamic functional interdependencies which constitute the monetary circulation itself.  In that fashion, one would obtain a more general unified theory  which, from its compactness, simplicity, explanatory power, and universality would prove more efficient in the solution of certain types of problems. Continue reading →

The Significance of Burley’s And Csapo’s Characteristic Equation And Its Root Solution

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Our references in this section are [Burley, 1992-2] and [Burley and Csapo, 1992-1].

Burley, Peter and Csapo, Laszlo, (1992) Money Information in Lonergan-von Neumann Systems, Economic Systems Research, Vol 4, No. 2, 1992 [Burley and Csapo, 1992-1]

Burley, Peter (1992) Evolutionary von Neumann Models, Journal of Evolutionary Economics 2 , 269-80 [Burley, 1992-2]

We consider a game-theoretic, von Neumann model of the transitional process from an initial stationary state to a more abundant stationary state, with matrix A of inputs and matrix B of outputs containing explanatory functional variables.  (continue reading)

Two Summaries in Functional Macroeconomic Dynamics

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.I.   Summary of the Analysis:  Heuristic, Observations, and Discoveries

.II.  Summary of the Argument (verbatim from CWL 15, 5-6)

.III. Supplement to the Summaries

(Continue Reading)

Superpositionings Imagined; from Sequential to All-At-Once in a Single View

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I do not have a video capability on this website, but perhaps the reader could, in his/her imagination, superpose simultaneously upon the Diagram of Rates of Flow several key formulas and images. This exercise and self-testing should be beneficial to the serious student.  In addition to seeing and having insight into each image in a sequence, the reader would, by superposition see the inner workings and interrelations of the velocities and accelerations all at once in interdependence rather than alone and separately.  The superpositioning of each diagram with its formulas offers the opportunity to consider the ideas and schemes one-at-a-time. one-against-one, and all-at-once.  An imagining and understanding and affirming would bring home to the reader’s mind the full complexity of the always-current, purely dynamic, organic process.  And it would help the reader to appreciate the wisdom in Lonergan’s orderly presentation.

Here is a list of key formulas and images to be considered: Continue reading →