Monday, 6 September 2010

Lonergan on Basic and Surplus Goods & Services

"The key to appreciating Bernard Lonergan's economic theory is to understand how he sharpens the orthodox distinctions between producer goods, consumer goods, and capital and then goes on to fully exploit the distinction he draws. [Orthodox economists also draw these distinctions, but their distinctions are not precise, and they are not basic to their analysis as they are for Lonergan.] The particular distinction Lonergan draws is one of the fundamental building blocks of his theory." [McShane and Anderson 23.]

"[O]rthodox economists think unclearly of producer goods as used in the production of consumer goods. An example is the use of sheet metal in automobiles. Sheet metal, for them, is a producer good that is used to make consumer goods, ie automobiles. For Lonergan, however, what determines whether a good is classified as basic or surplus is its use when it is sold as a finished product." Thus a table saw bought by a home handyman is a basic good; the same saw bought by a carpenter is a surplus good. [McShane and Anderson 25.]

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