Horwitz was heavily influenced by the ‘Austrian School’ of economics. What this is and what it means are questions Horwitz tackled in his last book, Austrian Economics: An Introduction, published last year.
The school was founded by Carl Menger, an economist in Vienna, Austria, in the late 19th century. The origins of its name lie in a dispute over methodology and the story of its rise to prominence lies in the ‘marginalist’ revolution in economics in the 1870s. Both involve fundamental questions of economics, but they might be heavy going for the moment. Suffice it to say that from these origins a rich and profound body of inquiry and insight has emerged.
Horwitz explains that:
For Menger, economics was the study of how humans possessing limited knowledge and facing an uncertain future attempted to improve their well-being by figuring out what they wanted and how best to get it.
In an article titled ‘On the Origin of Money,’ Menger explained how money, which is a very useful institution, evolved: it wasn’t created. This led him to ask, in his book Investigations into the Methods of the Social Sciences, what is sometimes called the “Mengerian question”:
How can it be that institutions which serve the common welfare and are extremely significant for its development come into being without a common will directed toward establishing them?
In his excellent book Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions, Horwitz applied this analysis to the evolution of the family. As Horwitz notes:
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