Rorwitz shows that government-provided money must be inherently unstable, and that a free market in money allows the highest degree of order. Written from his doctoral thesis and rich with references, Horwitz's book starts off developing a solid theoretical foundation, resting on the role of individuals in developing social mechanisms, much like language, that allow institutions like money to communicate knowledge. That crucial step is omitted by all theorists who in the past have proposed increased government control over money. Chapter One explains what's wrong with current monetary economic orthodoxy. Chapter Four examines how money can evolve spontaneously.
Banks evolve because people want more than just gold warehouses.
They unintentionally help increase the general acceptability of notes. Among banks, refusal to clear mutually each other's currency notes would be harmful to both parties. Growth would lead to lowering prices. Horwitz doesn't say. But his illustration is still an exercise in clear thinking.