Catallactics
Template:Short description Script error: No such module "Sidebar". Catallactics is a theory of the way the free market system reaches exchange ratios and prices.[1][2][3][4] 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.[5] It explains prices as they are, rather than as they "should" be. The laws of catallactics are not value judgments, but aim to be exact, empirical, and of universal validity. It was used extensively by the Austrian School economist Ludwig von Mises.[6]
Etymology
The term catallactics comes from the Greek verb Script error: No such module "Lang". which means to exchange, to reconcile.[7][8]
Definition
Catallactics is a praxeological theory. The term catallaxy was used by Friedrich Hayek to describe "the order brought about by the mutual adjustment of many individual economies in a market."[9] Hayek was dissatisfied with the usage of the word "economy" because its Greek root, which translates as "household management", implies that economic agents in a market economy possess shared goals. He derived the word "Catallaxy" (Hayek's suggested Greek construction would be rendered καταλλαξία) from the Greek verb katallasso (καταλλάσσω) which meant not only "to exchange" but also "to admit in the community" and "to change from enemy into friend."[10]
According to Mises[11] and Hayek[12] it was Richard Whately who coined the term "catallactics". Whately's Introductory Lectures on Political Economy (1831) reads:[13][14]
See also
Notes
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- ↑ Script error: No such module "citation/CS1". See also p. 185 n4.
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- ↑ Script error: No such module "citation/CS1". A footnote to this paragraph continues: "It is perhaps hardly necessary to observe, that I do not pretend to have classical authority for this use of the word Catallactics; nor do I deem it necessary to make any apology for using it without such authority. It would be thought, I conceive, an absurd pedantry to find fault with such words as "thermometer," "telescope," "pneumatics," "hydraulics," "geology," &c. on the ground that classical Greek writers have not employed them, or have taken them in a different sense. In the present instance, however, I am not sure that, if Aristotle had had occasion to express my meaning, he would not have used the very same word. In fact I may say he has used another part of the same verb in the sense of "exchanging;" (for the Verbals in are, to all practical purposes, to be regarded as parts of the verbs they are formed from) in the third book of the Nicom. Ethics he speaks of men who hold their lives so cheap, that they risked them in exchange for the most trifling gain (καταλλάττονται). The employment of this and kindred words in the sense of "reconcilement," is evidently secondary, reconciliation being commonly effected by a compensation; something accepted as an equivalent for loss or injury."
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Bibliography
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External links
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