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"catallaxy"
It has been said, only too truly, that Plato was the inventor of both our secondary schools and our universities. I do not know a better argument for an optimistic view of mankind, no better proof of their indestructible love for truth and decency, of their originality and stubbornness and health, than the fact that this devastating system of education has not utterly ruined them. In spite of the treachery of so many of their leaders, there are quite a number , old as well as young, who are decent, and intelligent, and devoted to their task. " I sometimes wonder how it was that the mischief done was not more clearly perceptible," says Samuel Butler, " and that the young men and women grew up as sensible and goodly as they did, in spite of the attempts almost deliberately made to warp and stunt their growth. Some doubtless received damage, from which they suffered to their life's end; but many seemed little or none of the worse, and some almost the better. The reason would seem to be that the natural instinct of the lads in most cases so absolutely rebelled against their training, that do what the teachers might they could never get them to pay serious heed to it"
 
Popper, K.
The open society and its enemies, Vol. 1
2007 , p. 144

 

The term "Catallaxy"

"The term 'catallactics' was derived from the Greek verb katallattein (or katallassein) which meant, significantly, not only 'to exchange' but also 'to admit into the community' and 'to change from enemy into friend'. From it the adjective 'catallactic' has been derived to serve in the place of 'economic' to describe the kind of phenomena with which the science of catallactics deals. The ancient Greeks knew neither this term nor had a corresponding noun; if they had formed one it would probably have been katallaxia. From this we can form an English term catallaxy which we shall use to describe the order brought about by the mutual adjustment of many individual economies in a market. A catallaxy is thus the special kind of spontaneous order produced by the market through people acting within the rules of the law of property, tort and contract."
(Hayek, F. A., 1982, Law, Legislation and Liberty (Routledge, London), Vol. 2, pp. 108-109).

"It has been suggested more than once that the theory explaining the working of the market be called catallactics from the classic Greek word for bartering or exchanging - katallattein. I have fallen somewhat in love with this word since discovering that in ancient Greek, in addition to 'exchanging', it also meant 'to admit into the community' and 'to change from enemy into friend'. I have therefore proposed that we call the game of the market, by which we can induce the stranger to welcome and serve us, the 'game of catallaxy'"
(Hayek, F. A., 1978, New Studies (Routledge and Keagan Paul, London), p. 60).

"The instance in which the use of the same term for two different kinds of order has caused most confusion, and is still constantly misleading even serious thinkers, is probably that of the use of the word 'economy' for both the deliberate arrangement or organization of resources in the service of a unitary hierarchy of ends, such as a household, an enterprise, or any other organization including government, and the structure of many interrelated economies of this kind which we call ... an 'economy'. The ordered structure which the market produces is, however, not an organization but a spontaneous order or cosmos, and is for this reason in many respects fundamentally different from that arrangement or organization originally and properly called an economy. The belief, largely due to this use of the same term for both, that the market order ought to be made to behave as if it were an economy proper, and that its performance can and ought to be judged by the same criteria, has become the source of so many errors and fallacies that it seems necessary to adopt a new technical term to describe the order of the market which spontaneously forms itself. By analogy with the term catallactics which has often been proposed as a replacement for the term 'economics' as the name for the theory of the market order, we could describe that order itself as a catallaxy. Both expressions are derived from the Greek verb katallattein (or katallassein) which significantly means not only 'to exchange' but also 'to receive into the community' and 'to turn enemy into friend'. The chief aim of this neologism is to emphasize that a catallaxy never ought nor can be made to serve a particular hierarchy of concrete ends, and that therefore its performance cannot be judged in terms of a sum of particular results. Yet all the aims of socialism, all attempts to enforce 'social' o 'distributive' justice, and the whole of the so-called 'welfare economics', are directed towards turning the cosmos of the spontaneous order of the market into an arrangement or taxis, or the catallaxy into an economy proper."
(Hayek, F. A., 1978, New Studies (Routledge and Keagan Paul, London), p. 90-1).

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"CATALLAXY" is a Community Trade Mark (CTM) of the European Union


Catallaxy ® Institute - c/o GFI Treuhand, via Maistra 7, 7500 St. Moritz (CH) - © 2009-2012

"A catallaxy is thus the special kind of spontaneous order produced by the market through people acting within the rules of the law of property, tort and contract".F. A. von Hayek, Law Legislation and Liberty (London, 1982), Vol. 2 (1976), pp. 108-109.