Lonergan's Early Economic Research

Lonergan's Early Economic Research: Texts and Commentary

MICHAEL SHUTE
Copyright Date: 2010
Pages: 224
https://www.jstor.org/stable/10.3138/9781442660397
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  • Book Info
    Lonergan's Early Economic Research
    Book Description:

    Lonergan's Early Economic Researchdelves into the origins of Bernard Lonergan's economic theory through his own writing on the subject.

    eISBN: 978-1-4426-6039-7
    Subjects: Philosophy

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Abbreviations
    (pp. vii-viii)
  4. Preface
    (pp. ix-xii)
  5. Editor’s Introduction
    (pp. xiii-2)
  6. 1 Economics and the Dialectic of History
    (pp. 3-50)

    In an article written in July 1941 for the Catholic newspaper theMontreal Beacon, Lonergan introduced the principle of ‘superflua status, surplus income’ to make the case that Catholics ought to support the Canadian ‘war bond’ effort.¹ The reference is significant in Lonergan’s intellectual history, as the first published evidence of his work in economics. His use of the notion of surplus income, which he would later define further as pure surplus income, is particularly important. Lonergan did not mean by surplus income something equivalent to Marx’s notion of surplus value, which Marx understood as profit on products beyond the...

  7. 2 Critique of Contemporary Methods
    (pp. 51-71)

    Lonergan makes the large claim that his economic theory is a ‘radically new viewpoint’ that, like the revolutions in physics brought about by Newton and Einstein, ‘transforms, reformulates, reinterprets the correlations of earlier science without necessarily denying its truth.’¹ He contrasts his work with that of its well-known predecessors, that of the old political economists of the nineteenth century and of the neo-classical economic ‘scientists’ of the twentieth century.² He claims to have reached a scientific generalization of both that will ‘yield the new political economy which we need.’³ Anticipating objections, Lonergan defends his approach with the claim that his...

  8. 3 Reading Economic History
    (pp. 72-101)

    One of the great strengths of Lonergan’s approach to economics was his knowledge of and interest in the history of economic thought. That should come as no surprise to us when we appreciate that his general methodology developed out of a philosophy of history. One of the great themes of his life’s work was the integration of system and history.¹ Lonergan once remarked to Frederick Crowe, ‘All my work has been introducing history into Catholic theology.’² It is no exaggeration to say that the same approach informed his work in economics. The two twentieth century economists who most influenced Lonergan...

  9. 4 Price and Market Equilibrium Analysis
    (pp. 102-110)

    Capitalizing on the marginal revolution of the 1870s, neo-classical economics replaced classical political economy to become the dominant paradigm in economics departments in the twentieth century, the one outstanding exception being Marxist economics. Lonergan understood his own work, in some sense, as that of recovering the ideals of creativity and democracy, though not the solutions, of the nineteenth century political economists. Although the marginal revolution corrected classical economics, in Lonergan’s view, it did so in the wrong way. Lonergan writes, ‘Whatever the accuracy of economics, it certainly does not possess the old democratic spirit.’¹ Its only solution is to supply...

  10. 5 The Equilibrium Rate of Interest
    (pp. 111-121)

    Equilibrium theory postulates ‘the general interdependence of all economic quantities.’¹ A difficulty arises, however, when we try, in this context, to account for the actual circulation of money in the real economy. There exist transfers of money that disturb general equilibrium and pose difficulties for equilibrium theorists. Two interrelated instances of such transfers are interest and cyclic phenomena in the economy. Walras’ market clearing is instantaneous, but the phenomena of interest, whether associated with investment or consumer loans, bring into play considerations of time and the issue of economic development. Trade cycle theory must integrate past conditions and present conditions...

  11. 6 The Velocity of Money and Turnover Frequency
    (pp. 122-133)

    The section ‘Net Transfers’ from the essay fragment ‘A Method of Independent Circulation Analysis’ concerns the difficulties of understanding how money changes its velocity in the circuits. Lonergan writes:

    A general solution of the problem is not as difficult as might appear. We have to deal not with the quantity and velocity of money in all and any payments but only with the quantity and velocity in operative payments. But operative payments have been defined as standing in a network congruent with the network of the productive process; it follows that we have to deal with quantities of money congruent...

  12. 7 Reading Schumpeter
    (pp. 134-149)

    Joseph Schumpeter was an important figure for Lonergan. While mainstream economics in the twentieth century resided on ‘the static bank’ of the economic river, Schumpeter worked seriously at understanding the dynamic flow of economic development. His results proved to be more daring and comprehensive than those of Keynes.¹ Keynes, following in the tradition of Ricardo and Marshall, preferred to work with a few simple static financial and psychological variables that assume an invariant production function, the measurement of which he tied to employment levels. This approach virtually ignored the relation between economic development and monetary circulation, which was central to...

  13. 8 Communications
    (pp. 150-162)

    While Lonergan was working on his economics essays, he also wrote articles and reviews for Catholic newspapers in Montreal. Two of these articles were relevant to his work on economics.

    ‘Savings Certificates and Catholic Action’ was published in theMontreal Beaconon 7 February 1941. In this article, his first published piece on an economic topic, Lonergan supports the campaign to purchase savings certificates (war bonds). The article shows his awareness of the significance of pure surplus income and of the importance of saving in the first phase of an economic expansion.¹ In retrospect, what is of what is of...

  14. Bibliography
    (pp. 163-172)
  15. Index
    (pp. 173-180)