Economics and Civilizations

2003-07-17

Two books I've absorbed recently are The Principles of Economics by Karl Menger (appropriately enough while travelling to and from Vienna, since Menger founded the Austrian school of economics) and The Evolution of Civilizations by Carroll Quigley. Both are intellectual blockbusters. Menger's Principles is the clearest analysis I have ever read of economic phenomena, while Quigley's Evolution provides deep insights into human history, especially the rise and importance of Western civilization (it's something of a precursor and historical complement to Guns, Germs, and Steel). Indeed, there is a connection between the two, since Menger's analysis elucidates the historical progression of economic phenomena such as the rise of an exchange economy out of a pure production economy, the nature of commodities and economic planning, and the origin of money. And Quigley locates the distinctive aspect of any given civilization in what he calls its "instrument of expansion", i.e., a form of military, religious, social, or economic organization that generates and invests a surplus in future-oriented activities; in the modern West, that instrument is profit-oriented private enterprise within a system of free prices (the very economic system that Menger explains so well). There is much, much more to Quigley's book than I can do justice to here, but I'll try to return to his insights in future blog entries (or read his book yourself -- it's available in an inexpensive edition from Liberty Press of Indianapolis).


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