Catallaxy

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.[lower-alpha 1]

Part of a series on the
Austrian School
Principal works Capital and Interest Human Action Individualism and Economic Order Man, Economy, and State Principles of Economics
Origins School of Salamanca Classical economics French Liberal School School of Brentano Methodenstreit
Theories and ideologies Austrian business cycle Catallactics Creative destruction Economic calculation problem View of inflation Right-libertarianism Libertarianism in the United States Malinvestment Marginalism Methodological individualism Praxeology Roundaboutness Spontaneous order Subjective theory of value Theory of interest
Organizations Cato Institute Foundation for Economic Education The Independent Institute Liberty Fund Mises Institute Property and Freedom Society Reason Foundation
People Böhm-Bawerk Block Boettke DiLorenzo Fetter Garrison Haberler Hayek Hazlitt Heydel Higgs Hoppe Horwitz Hülsmann Huerta de Soto Kirzner Lachmann Lavoie Leeson Machlup Menger Mises Morgenstern Murphy Peterson Rothbard Röpke Salerno Skousen Strigl Wieser
Variants and related topics Anarcho-capitalism Economic freedom Perspectives on capitalism
Business and economics portal

Aristotle was the first person to define the word "economy" as ‘the art of household management’.[1] 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 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.[2] The word catallaxy aims to provide a more accurate and inclusive word for the market phenomenon of groups of households, in which participants are free to pursue diverse ends of their own.

After being discussed by Ludwig von Mises the term catallaxy was later made popular by Friedrich Hayek who defines it as "the order brought about by the mutual adjustment of many individual economies in a market".[3]

Catallaxy may also be used to refer to a marketplace of ideas, especially a place where people holding diverse political ideologies come together to gain deeper understanding of a wide range of political orientations.

Catallaxy also becomes a new dimension in software design and network architecture.[4]