Catallaxy
Encyclopedia
Catallaxy or Catallactics
is an alternative expression for the word "Economy." Whereas the word Economy
suggests that people in a community possess a common and congruent set of values and goals, Catallaxy suggests that the emergent properties of a market (prices, division of labor, growth, etc) are the outgrowths of the diverse and disparate goals of the individuals in a community.
Aristotle
was the first person to define the word "Economy" as ‘the art of household management’. As is still a common method of explanation today, Aristotle tried to explain complex market phenomena through an analogy between a household and a state. Take for example the modern analogy between a the national debt of a country's government and a simple consumer's credit card debt. Aristotle used a common Greek word 'oikonomia' that meant "to direct a single household," and used it to mean the management of an entire city-state. In reality, a group of households is not an "Economy" since it is not one household, but many. The word Catallaxy aims to provide a more accurate word for the market phenomenon of groups of households.
First discussed by Ludwig von Mises
, Catallaxy was later coined and made popular by Friedrich Hayek
who defines it as follows:
Hayek derived the word from the Greek word ‘katallasso’ (καταλλάσσω) which meant not only ‘to exchange’ but also ‘to admit in the community’ and ‘to make friends’.
Christopher Frey
considers Catallaxy being the key for a deeper understanding of knowledge economy
and knowledge-based society but he doubts that it is price that rules the market.Catallaxy also becomes a new dimension in software design and network architecture.
Catallactics
Catallactics is the praxeological theory of the way the free market system reaches exchange ratios and prices.It aims to analyse all actions based on monetary calculation and trace the formation of prices back to the point where an agent makes his or her choices. It explains prices as they are and...
is an alternative expression for the word "Economy." Whereas the word Economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
suggests that people in a community possess a common and congruent set of values and goals, Catallaxy suggests that the emergent properties of a market (prices, division of labor, growth, etc) are the outgrowths of the diverse and disparate goals of the individuals in a community.
Aristotle
Aristotle
Aristotle was a Greek philosopher and polymath, a student of Plato and teacher of Alexander the Great. His writings cover many subjects, including physics, metaphysics, poetry, theater, music, logic, rhetoric, linguistics, politics, government, ethics, biology, and zoology...
was the first person to define the word "Economy" as ‘the art of household management’. As is still a common method of explanation today, Aristotle tried to explain complex market phenomena through an analogy between a household and a state. Take for example the modern analogy between a the national debt of a country's government and a simple consumer's credit card debt. Aristotle used a common Greek word 'oikonomia' that meant "to direct a single household," and used it to mean the management of an entire city-state. In reality, a group of households is not an "Economy" since it is not one household, but many. The word Catallaxy aims to provide a more accurate word for the market phenomenon of groups of households.
First discussed by Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
, Catallaxy was later coined and made popular by Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
who defines it as follows:
‘the order brought about by the mutual adjustment of many individual economies in a market’.
Hayek derived the word from the Greek word ‘katallasso’ (καταλλάσσω) which meant not only ‘to exchange’ but also ‘to admit in the community’ and ‘to make friends’.
Christopher Frey
Christopher Frey
Christopher Frey was born in 1959 in the former German capital Bonn. He grew up in a political and international environment as his father worked for the US embassy. He received a music education at the school of music of the Regensburger Domspatzen. His early interest in the fine arts was also...
considers Catallaxy being the key for a deeper understanding of knowledge economy
Knowledge economy
The knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies to...
and knowledge-based society but he doubts that it is price that rules the market.Catallaxy also becomes a new dimension in software design and network architecture.