[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
[2/16/20] Albert Einstein, Bernard Lonergan, and the theory of Riemannian manifolds: The contents of the excerpt below from CWL 3 are pretty standard stuff in an advanced physics course. The ideas are not Lonergan’s discoveries. Nevertheless, it is worthwhile to point out that Lonergan knew his physics and indeed taught physics. He understood and appreciated the difference between Newtonian mechanics and modern field theory. And he brought that thinking to his revolutionary ideas in purely relational Functional Macroeconomic Dynamics. So, to provide an indication of the mind that Lonergan brought to macroeconomics, we print this excerpt.
Now the principles and laws of a geometry are abstract and generally valid propositions. It follows that the mathematical expression of the principles and laws of a geometry will be invariant under the permissible transformations of that geometry. … Such is the general principle and it admits at least two applications. In the first application one specifies successive sets of transformation equations, determines the mathematical expressions invariant under those transformations, and concludes that the successive sets of invariants represent the principles and laws of successive geometries. In this fashion one may differentiate Euclidean, affine, projective and topological geometries. … A second, slightly different application of the general principle occurs in the theory of Riemannian manifolds. The one basic law governing all such manifolds is given by the equation for the infinitesimal interval, namely,
ds2= Σgijdxidxj [i, j = 1,2…n]
where dx1, dx2… are differentials of the coordinates, and where in general there are n2 products under the summation. Since this equation defines the infinitesimal interval, it must be invariant under all permissible transformations. … … … Thus in the familiar Euclidean instance, gij is unity when i equals j; it is zero when i does not equal j; and there are three dimensions. In Minkowski space, the gij is unity or zero as before, but there are four dimensions, and x4 equals ict. In the General Theory of Relativity, the coefficients are symmetrical, so that gij equals gji; and in the Generalized Theory of Gravitation, the coefficients are anti-symmetrical. [#77] [CWL 3, 146 -147/170-71] (Click here for previous “Single Paragraphs” or “Brief Items”)
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]