In the Journal of Macrodynamic Analysis (14) [Brown et al., 2020], Bruce Anderson and Philip McShane invoked the metaphor of the ” titanothore” in their article “The More General and Difficult Fields of Specialization” (pp. 133-53).
A society cannot be like a titanothore, a beast with a three-ton body and a ten-ounce brain, for titanothore is extinct. Instead, a society must have a three-ton culture in which technology, economics, and politics are properly situated and properly coordinated. Continue reading
.1. Science is explanation of phenomena by implicit formulas wherein the relations define the terms, the terms define the relations, and insight fixes both. All relations are coherent – of terms with terms and formulas with formulas – with one another so as to comprise a complete theory.
.2. Insights yield terms related to one another; thus, properly representative terms in their relations may qualify as possible explanatory conjugates.
.3. A heuristic states the goal of a search. A method is the process or procedure which leads to a goal.
.4. Generalization is needed to unify and supersede the scattered insights of Establishment Economics. (Continue reading)
We have previously encouraged all to read in CWL 15, Macroeconomic Dynamics: An Essay in Circulation Analysis, both the Editors’ Preface, by Charles C. Hefling, JR./xi, and the Editors’ Introduction, by Frederick G. Lawrence/xxv. (Click here and here for 8/1/19 Brief Item and here)
Below we simply print the Contents headings of CWL 15. The reader will note that the headings do not resemble very much the chapter headings one might find in a conventional macroeconomics textbook. That is because Lonergan applied a radically different, scientific, dynamic heuristic to macroeconomics, and he put his questions in the right order. He used precise analytic distinctions and implicit definition to achieve explanation in terms of dynamic, interdependent functionings. He achieved a radically different field theory of the economic process. As a scientist he reached explanation by the way of analysis, and as a teacher he presented his discovery by the way of synthesis. Thus he has been able to lead readers to understand his revolutionary Modern Macroeconomic Field Theory.
CWL 15, Contents
- General Editors’ Preface, Frederick E. Crowe and Robert M. Doran/ix
- Editors’ Preface, Charles C. Hefling, JR./xi
- Editors’ Introduction, Frederick G. Lawrence/xxv
- Summary of the Argument/ 5
- 1 Analysis /7
- 2 Economic Process/ 12
- 3 Significant Basic Variables/14
- 4 Circulation Analysis/16
- 5 Procedure/17
- 6 The Productive Process/23
- Additional Note to Section 6 /22
- 7 Division of the Productive Process/23
- 8 The Basic Stage of the Productive Process/28
- 9 The Surplus Stage/31
- 10 Cycles of the Productive Process/35
- 11 A Technical Restatement/36
- 12 Classes of Payments/38
- 13 Rates of Payment and Transfer/45
- 14 Diagram of Rates of Flow/55
- 15 Circuit Acceleration (I)/56
- Appendix to Section 15/65
- 16 Circuit Acceleration (II)/68
- 17 Measuring Change in the Productive Process (I)/70
- 18 Phases in the Productive Process/75
- 19 Mistaken Expectations/80
- 20 Misadventures/82
- 21 Methodological Shifts/86
- 22 The Position of This Essay/91
- Healing and Creating in History/97
- 23 Measuring Change in the Productive Process (II)/107
- 24 The Cycle of the Productuve Process/113
- Additional Note to Section 24: The Pure Cycle/120
- 25 Price and Quantity Changes in Accelerating Circuits/128
- Additional Note to Section 25: The Phases in Circuit Acceleration – A Technical Statement/130
- 26 The Cycle of Basic Income/133
- 27 The Cycle of Pure Surplus Income/144
- 28 The Cycle of the Aggregate Basic Price Spread/156
- 29 Superposed Circuits/162
- 30 The Balance of Foreign Trade/165
- 31 Deficit Spending and Taxes/173
- Appendix: History of the Diagram, 1944-1998, Patrick H. Byrne/177
- Glossary of Symbols/203
[3/18/20] Michael Gibbons’ essay, “Economic Theorizing in Lonergan and Keynes” is a gem.
Gibbons, M. (1987) “Economic Theorizing in Lonergan and Keynes”, Religion and Culture: Essays in Honour of Bernard Lonergan S.J., Eds. J.P. Fallon and P.B. Riley, University of New York Press, Albany [Gibbons, 1987, pp. 313-23]
Gibbons’ essay is followed in the collection by essays of Patrick Byrne and Eileen De Neeve; all three are available together on line at Continue reading
As represented below in the Diagram of Rates of Flow, in Functional Macroeconomic Dynamics the “basic terms are defined by their functional relations.” The basic terms are precise analytical terms upon which a superstructure of explanatory relations can be constructed. Thus, the terms are of scientific and explanatory significance. (Continue reading)
Diagram of Rates of Flow
One cannot help but think that Bernard Lonergan had functional macroeconomic dynamics clearly in mind as he treated the intelligibility of world process in CWL 3, Insight: …, which is very much an implementation of the act of understanding of mathematicians and natural scientists. In his understanding of mathematics, the natural sciences, and the science of macroeconomics in particular, he grasped that the explanation of the dynamic concrete process is expressed by a mathematical conjunction of component abstract primary relativities with component concrete secondary determinations from the non-systematic manifold. And these secondary determinations, such as particular prices and quantities, are to be interpreted in the light of the significant, abstract, explanatory variables rather than in the obscurity of the IS-LM, and AD-AS models. (Continue reading)
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)
Andrei Shleifer is a professor of economics at Harvard University. Nicola Gennaioli is a professor in the Department of Finance at Bocconi University, Milan.
A Crisis of Beliefs is well worth reading as either a treatise on psychology or as an application of a model of psychology to people’s mistaken thinking and acting in certain economic circumstances.
But Gennaioli and Shleifer must ask, How would the human participants act if, instead of being a bundle of desires, fears, cognitive biases, and ignorance regarding the abstract primary relativities of the economic process, they understood the laws of the process and the precepts for adaptation yielded by the laws? That is to ask, Is there a set of laws independent of human psychology and above intellectual ignorance to which human participants would enlightenedly adapt if they understood them? And, if so, is not the primary responsibility of professors of macroeconomics to educate and enlighten participants as to the laws they are violating so as, thus, to curb automatically their irrational psychological tendencies? Continue reading
Lonergan’s two-circuit diagram (below) represents a theoretical breakthrough. It replaces the single-circuit diagram common to the textbooks of macroeconomics.
Lonergan started with a dominant one-flow economic analysis – think in terms of the household-firm diagram – and separated it into two flows “to form a more basic concept and develop a more general theory.” 21 …The distinction was never built scientifically (by other economists) into a systematics of dynamic economics [McShane, 2017, viii; ftnt 22]