Is Functional Macroeconomic Dynamics Easy or Difficult?

Philip McShane recommends introducing the subject of Functional Macroeconomic Dynamics in the senior year of high school, yet he speaks about his own struggling with Lonergan’s Functional Macroeconomic Dynamics for 5 years:

I spent five years of the seventies struggling with the original 1944 version … [McShane 2017, 37]

Introducing Functional Macroeconomic Dynamics to high school kids, age 17-18, is not necessarily done to make them experts in one year; rather the goal would be to sow some seeds both to obviate the disorientating methods of Macroeconomics 101 and to prevent students’ minds from being slammed shut and imprisoned within Walrasian static walls.

  1. Leon Walras developed the conception of the markets as exchange equilibria. Concentrate all markets into a single hall. Place entrepreneurs behind a central counter.  Let all agents of supply offer their services, and the same individuals, as purchasers, state their demands.  Then the function of the entrepreneur is to find the equilibrium between these demands and potential supply. … The conception is exact, but it is not complete.  It follows from the idea of exchange, but it does not take into account the phases of the productive rhythms. … Now each phase in an exchange economy will have its exchange equilibrium, but the equilibria of the different phases differ radically from one another. … [CWL 21, 51-52]

While we agree with Schumpeter that Walras’s system implicitly includes the aggregates commonly considered in macroanalysis, (Walras’s system)can hardly be credited with distinctions between basic and surplus expenditure, receipts, outlay, income, and much less with an account of their various dynamic relations.  But until such distinctions are drawn and their dynamic significance understood, the aggregates and relations cannot be contained implicitly in any system.  [CWL 15,  91-92]

The mathematics of Functional Macroeconomic Dynamics goes no higher than first-year calculus, which can be studied in the senior year of high school.  Improvement and mastery of superstructural complexities could come gradually over time.  But in senior year there would occur many isolated flashes of insight and students would pick up arms of dynamics against the statical adversary.

… even with talent, knowledge makes a slow entrance. To learn thoroughly is an undertaking that calls for perseverance. [CWL 3, 186/210]

One can speculate that it was a 5-year struggle for McShane because a)  though well-versed in the methods and subtleties of mathematics and physics, he had never before studied the distinct science of economics, b) it was not only necessary to grapple with and grasp the concepts and relations, but also to put them into a large historical context for contrast and comparison, c) he had to verify the scientificness of Lonergan’s system, d) he had to attend to many other subjects of interest, and he simply did not have adequate time. McShane did a lot of primary research, interpretation, history, and comparison for the rest of us, and he made it all easier for us.

Of greater difficulty and taking a longer time than would be available in high school would be the understanding of Functional Macroeconomic Dynamic’s foundation in scientific method, mathematics, and physics.  Lonergan used clues from math and the sciences to ensure that his macroeconomic dynamics is scientific and fully explanatory.  Further, it would be necessary to understand how Functional Macroeconomc Dynamics sublates the inadequate theories of oracular academic economists.

Many readers of Lonergan’s economics come from backgrounds commonly associated with the liberal arts.  They lack sufficient depth of knowledge in mathematics and the physical sciences.  It is impossible for them to appreciate quickly, in its historical context, Lonergan’s achievement in economics. Though they may have read Insight and gained some appreciation of the heuristic method of the scientist, the doing of science is still in their future.

By key phrases McShane provides pointers to the historical context of Lonergan’s Functional Macroeconomic Dynamics, its qualification as a science, its systematic and scientific significance, and the critical differences between Lonergan’s work and that of today’s economists. He demonstrates to the reader that Lonergan’s analysis is revolutionary, that Lonergan has done in economics what was done for physics in the period from Tycho Brahe to Laplace, and from Laplace to today.

But for now, suffice it to say that some of the general contours and important points of macroeconomic dynamics are easy to grasp quickly, even by high-schoolers; the formulae are not arcane.  Mastery and full appreciation of the historical context may take more time, especially for young students.  Yet it is all worth the effort.

I took, in fact, much longer than 5 years to control the stuff, and I do not see much signs of that control in the Lonergan literature. The control is symbolized by my index entry under the word Concomitance in CWL 21.  Such a control is reached only after a tough long climb. But YES YES I agree that the 17 year olds can get it in a couple of hours: I taught a class the key points in a school in Australia that way. [Private communication]

The rewards of understanding and verification are great.  The knowledge of Functional Macroeconomic Dynamics is enlightening and enriching.  Functional Macroeconomic Dynamics is a must-understand for politicians, journalists, and professors.  The good of order in society requires it.  Senior year in high school is not too early to begin studying Functional Macroeconomic Dynamics.