Karen Horney was born Karen Danielsen on 16 September 1885 in Blankenese, Germany, near Hamburg. Her father, Berndt Wackels Danielsen (1836-1910), was Norwegian but had German citizenship. He was a ship's captain in the merchant marine, and a Protestant traditionalist (his children nicknamed him "the Bible-thrower", as he did indeed throw Bibles). Her mother, Clotilde, nee van Ronzelen (1853-1911), known as "Sonni", was also Protestant, of Dutch origin.

Horney, together with fellow psychoanalyst Alfred Adler, formed the Neo-Freudian discipline.  While Horney acknowledged and agreed with Freud on many issues, she was also critical of him on several key beliefs.  Like many who held opposing views with Freud, Horney felt that sex and aggression were not the primary constituents for determining personality. Horney, along with Adler, believed there were greater influences on personality through social occurrences during childhood, rather than just repressed sexual passions. The two focused more on how the conscious mind plays a role in human personality, not just subconscious repression. Freud's notion of "penis envy" was particularly subject to criticism, as well. She thought Freud had merely stumbled upon women's jealousy of men's generic power in the world. Horney accepted that penis envy might occur occasionally in neurotic women, but stated that "womb envy" occurs just as much in men: Horney felt that men were envious of a woman's ability to bear children. The degree to which men are driven to success may be merely a substitute for the fact that they cannot carry, nurture and bear children. Horney also thought that men were envious of women because they fulfill their position in society by simply "being", whereas men achieve their manhood according to their ability to provide and succeed.  Horney was bewildered by psychiatrists' tendency to place so much emphasis on the male sexual organ. Horney also reworked the Freudian Oedipal complex of the sexual elements, claiming that the clinging to one parent and jealousy of the other was simply the result of anxiety, caused by a disturbance in the parent-child relationship.  Despite these variances with the prevalent Freudian view, Horney strove to reformulate Freudian thought, presenting a holistic, humanistic view of the individual psyche which placed much emphasis on cultural and social differences worldwide.

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