Carl Menger’s Overlooked Vital Evolutionary Insights
Carl Menger is widely recognized as one of the economists leading the so-called marginalist revolution along with William Stanley Jevons and Léon Walras. There are two other contributions by Menger that are relatively underappreciated and are vital for making sense of the socioeconomic order, including why mankind remains so lost in economic ignorance and tribalistic warmongering.
They are, first, his insights into the proper method or way to study the economy or social order and its emergence-evolution, and second, his application of such wisdom to explain the evolution of money and the entire socioeconomic order that further emerges thanks to money. Let’s further expand on these two.
Menger wrote an entire book devoted to discussing the proper method with which to study the social sciences, aptly titled Investigations into the Methods of the Social Sciences. So how should we study the social sciences according to Menger? He writes,
Natural organisms almost without exception exhibit, when closely observed, a really admirable functionality of all parts with respect to the whole, a functionality which is not, however, the result of human calculation, but of a natural process. Similarly we can observe in numerous social institutions a strikingly apparent functionality with respect to the whole. But with closer consideration they still do not prove to be the result of an intention aimed at this purpose, Le., the result of an agreement of members of society or of positive legislation. They, too, present themselves to us rather as “natural” products (in a certain sense), as unintended results of historical development. One needs, e.g., only to think of the phenomenon of money, an institution which to so great a measure serves the welfare of society, and yet in most nations, by far, is by no means the result of an agreement directed at its establishment as a social institution, or of positive legislation, but is the unintended product of historical development. One needs only to think of law, of language, of the origin of markets, the origin of communities and of states, etc. Now if social phenomena and natural organisms exhibit analogies with respect to their nature, their origin, and their function, it is at once clear that this fact cannot remain without influence on the method of research in the field of the social sciences in general and economics in particular. . . . Now if state, society, economy, etc., are conceived of as organisms, or as structures analogous to them, the notion of following directions of research in the realm of social phenomena similar to those followed in the realm of org
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