Macroeconomic Dynamics: An Essay in Circulation Analysis Volume 15 of Collected Works of Bernard Lonergan ed. by F.G. Lawrence, P.H. Byrne, C. Hefling Jr (review)

humanities 297 cerning the massive transformations wrought by changes in communications technologies and their potential impact on social, public, or democratic life. On the other hand, many of these are not new; and Canada for one has been fumbling around with these for long enough that the chorus of imminent extinction is wearing a bit tedious. Surely, we ought to be able to come up with some slightly more original tunes; we certainly have the Innises and McLuhans in our past to show us how. So I'm with Michael Janeway, who argues in his recent Republic of Denial that those who should know, journalists and media scholars, are for complex reasons singularly poorly equipped even to begin to grapple seriously with the problems at hand. Recognizing this seems like a wise place to start. (MICHAEL DORLAND) F.G. Lawrence, P.H. Byrne, and C. Hefling Jr, editors. Macroeconomic Dynamics: An Essay in Circulation Analysis Volume 15 of Collected Works of Bernard Lonergan University of Toronto Press. lxxiv, 228. $60.00, $21.95 This book is based on the Essay that was completed in 1944 by Bernard Lonergan, a Canadian-born Jesuit, after about fifteen years of work. After a thirty-year delay, the Essay was modified as a result of a seminar, called Macroeconomics and the Dialectics of History, that Lonergan taught at Boston College between 1978 and 1982. The purpose of the book is to provide a framework allowing us to understand how events such as the Great Depression of the 1930s could happen. The author tries to show why balanced growth is rather unlikely, and why progress and development is most often accompanied by booms and busts. Lonergan's main point is that one must distinguish between the production of final consumer goods (which he calls the basic stage) on the one hand, and, on the other, the production of producer goods and intermediate goods (which he calls the surplus stage) which are added to fixed capital and variable capital. Lonergan wants to show that the rates of growth in these two sectors are usually not equal, and that this creates the upturns and the downturns that are so detrimental to the economy. Naturally, this is a problem which has preoccupied a large number of economists, at least in the years contemporary to Lonergan's initial Essay when economists attempted to deal with the origins of business cycles without assuming the existence of a single production sector, representative of all the others. The editors point out that Lonergan was deeply impressed by the work of Adolph Lowe and that of Michal Kalecki, both important heterodox economists. And, from what I could gather, there are certainly some 298 letters in canada 1999 resemblances. Lowe, in work that started in the 1930s, was concerned with the fact that the traverse from one regime of accumulation to another (a slower or faster one) was impossible to achieve smoothly, that is, without waste (unemployment) or capacity constraints. Lowe, along with the creator of input-output analysis Wassily Leontief, was a member of the socalled Kiel School, which argued that production is essentially a circular process, with commodities being produced by other commodities. The Kiel School was in opposition to the Austrian School, led by Friedrich Hayek, who saw production as a linear process and who believed (in contrast to Keynes) that the lack of aggregate demand was not the main cause of the Great Depression. Instead, Hayek faulted disproportions in the growth of the two sectors outlined by Lonergan, initially caused by rates of interest that had been set too low by the banking system, a reason which Lonergan certainly did not endorse. As to Kalecki, who was a Marxist by training, he also dealt with the proportionality problem, which arises when the flow of investment does not grow at the same rate as the overall stock of capital. The editors point out that Lonergan attempted to induce some experts in economics to read his work, but apparently with very little success, since he got `little, if any, reaction or encouragement.' I have probably experienced the same feelings as my predecessors. The book is very hard to read; it is replete...