On Greg Mankiw’s website one will find a blog-video, dated Tuesday, January 19th, entitled “A Discussion About My Favorite Textbooks”. The participants included Greg Mankiw, Peter Bofinger, Rudiger Bachmann, and Anna Reisch; and questions were called in by Vinit Rishi, Sascha Buetzer, Janina Urban, and Thomas Kopp.
Our only comment is that in doing pure science all macroeconomists must distinguish and keep separate pure science, applied science, psychology, sociology, anthropology, and political philosophy. Usually what they think is their pure science is actually an impure admixture of two or more fields of phenomena. If one intends a pure science, consisting of the explanatory relations of objective macroeconomic phenomena, one should not contaminate the field with illegitimate importations of sociology, class conflict, psychology, psychopolitical inclinations, etc. Otherwise there will inevitably be differences of opinion whose source is differences of sentiment, which will never be settled; the macroeconomists will argue superficially and endlessly about their unintelligible admixtures. (Continue reading)
Presenters John Siegfried and David Colander, and discussants Daron Acemoglu, Melissa S. Kearney, John A List, N. Gregory Mankiw, Deirdre McCloskey, and Betsey Stevenson recently collaborated in a virtual ASSA meeting entitled “What Does Critical Thinking Mean in Economics, the Big and Little of It?” Handouts from the meeting can be found in an Announcement in a blog of Saturday, January 2, 2021 on N. Gregory Mankiw’swebsite.
Preliminarily, note the subtitle in Lonergan’s seminal work,Insight: A Study of Human Understanding. In the present context we might reword the subtitle A Study of Critical Thinking. A very smart person – learned in advanced mathematics and theoretical physics – called Lonergan’s book “The Most Significant Book of the Twentieth Century.”(Continue reading)
To indicate to the serious reader the editors’ helpfulness in placing Functional Macroeconomic Dynamics in its historical and theoretical context, we list here the headings of theEditors‘ Introduction to Lonergan’s Macroeconomic Dynamics: An Essay in Circulation Analysis (CWL 15):
Editors’ Introduction, Frederick G. Lawrence ; xxv
Lonergan’s Entry into Economics, 1930-1944 / xxvi
Democratic Economics: An alternative to Liberalism and Socialism / xxxii
Liberalism and Socialism as Economistic Ideologies / xxxv
Free Enterprise as an Educational Project
Lonergan’s Reentry into Economics, 1978-1983 / xxxix
Lonergan’s Interlocutors in Economics / xliii
Lonergan and Marx / xlvi
Lonergan and Marshall / xlvii
Lonergan and Keynes / xlviii
Lonergan, Kalecki, and Others / li
Lonergan and Schumpeter / li
Macroeconomic Dynamic Analysis as a New Paradigm of Economic Theory / liv
The Systematic Significance of the Fundamental distinction between Basic and Surplus Production and Exchange
Profit / lxiii
Interest / lxvii
Lonergan’s Critique of ‘Supply-Side’ and ‘Demand-Side’ Economics / lxvii
Lonergan’s Critique of Secularist Ideologies: The Need for a Theological Viewpoint / lxix
In the first section .I., we’ll list a) a ranking or scale of preferences of meanings and values within the ecology in which humans live, b) money’s values from different points of view, and c) an ordered hierarchy of economic activity. In the second section .II., we’ll add detail to that scale of preferences and situate money’s values and the ordered hierarchy within the scale. Finally .III., we’ll display excerpts to point readers to original sources. One might find this outline useful when reading A Must-Read: Fred Lawrence, “Money, Institutions, And The Human Good”: An Ordered Perspective Distinguishing Social and Monetary Values. Lawrence points out that Lonergan properly clarifies the concept of exchange value in a free exchange process so as to destroy with a single stroke the mistakenconcepts of Adam Smith, John Locke, David Ricardo, and Karl Marx.
Not only do feelings respond to value. They do so in accord with some scale of preference. So we may distinguish vital, social, cultural, personal, and religious values in an ascending order. (CWL 14, 31-2/32-3) (Continue reading)
On Saturday, 12/19/ 2020,John Cochrane‘s blog “Bisin on MMT Rhetoric” cited Alberto Bisin’s review of Stephanie Kelton’s Book “The Deficit Myth. “ Alberto Bisin contends, as do we, that So-Called Modern Monetary Theory, as espoused by Kelton and others, does not qualify as a theory. Cochrane quotes Bisin:
The book should be seen as a rhetorical exercise. Indeed, it is the core of MMT that appears as merely a rhetorical exercise. As such it is interesting, but not a theory in any meaningful sense I can make of the word. The T in MMT is more like a collection of interrelated statements floating in fluid arguments. Never is its logical structure expressed in a direct, clear way, from head to toe.
For an ordered perspective on the role of culture in the ecology consisting of the schemes of recurrence of a) technology, b) production and exchange, and c) politics, one should read Fred Lawrence’s article, “Money, Institutions, and the Human Good.”Continue reading →
Our contention is that a large discretionary injection of “free money” into the channels of Demand – whether by the Fed or the Treasury – rather than as “money justified” through the channels into productive supply, (S’-s’O’) and (S”-s”O”), is intrinsically inflationary. New money channeled into either the market for secondary financial assets or into the market for basic products, without the money being “justified” by productive output, is dangerously inflationary. (Continue reading)
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 subjectivepsychology 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 objectivesystem 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 →
Preliminary note: In this section we are addressing the proper understanding and management of the economic process in normal, non-pandemic times. We affirm that the current pandemic calls for extraordinary measures.
Unwittingly, first out of ignorance and recently as necessitated by a pandemic, some nations, including the U.S., are wandering into the ultimatemenace to the financial system, the spending without constraint blessed and recommended by unscientific Modern Monetary Theory. (Click here and here) The systematic result of MMT’s unconstrained printing of money, unjustified by corresponding, concomitant production of goods and services, is rampant inflation in prices for a) goods and services and/or b) financial assets. (Continue reading)