Catallactics

Society is not a subject but an emergent web of specific relations from which society takes shape—the shape of modern society. The optimization approach—the logic of choice—makes it impossible to think in terms of shape. It starts from an already ordered space of alternatives and abstracts from the process through which separate subjects synthesize themselves into a society, coordinate with one another and thereby address the problem of scarcity.

The basic operation is the exchange of goods, especially exchange for money. Exchange is a triadic operation. EGO and ALTER communicate about scarce goods, reach an agreement and supply one another. One receives what they specifically need; the other receives what they generally need: money—a good that can be exchanged for other goods at any time or used to settle existing debts.

Exchange is the most important social form through which autonomous units—strangers—connect with one another. Money is its corresponding medium. A modern society cannot form without exchange and money. Nor can it form without the state.

The mainstream abstracts from the process of synthesis (coordination), with the result that the market and planning appear to be interchangeable coordination mechanisms. This is nirvana economics: it presupposes what modern society itself accomplishes in order to exist and function. Society cannot dispense with the forms of exchange and money.

State action and society’s catallaxy complement one another. Their relationship, however, is asymmetrical. Society’s catallaxy is the foundation; the state is the institution above it. It is equipped with instruments of coercion. Its task is to guide the conflict-laden process onto a sustainable path.

Only the establishment of the catallactic principle unleashed Prometheus.

The dyadic thinker views everything from the perspective of resource optimization. The triadic thinker is concerned with relations.

Because modern societies necessarily organize themselves as a catallaxy, the analysis of society must be based on a catallactic methodology. In other words, an analysis of the economy as a system must begin with exchange.