Catallaxis is a name I invented in 2002 through the fusion of two important concepts: catallactics and praxis.
Catallactics is a little-known term that refers to the science of exchanges. Although its use has been limited primarily to the great work of Ludwig von Mises and Friedrich Hayek, I think it is a terrific alternative to the more common name for this particular science: market economics. As Hayek taught us, the classical Greek term from which catallactics derives, katalattein or katalassein, meant not only to exchange but also to receive into the community and to turn from enemy into friend. To me, this is suggestive of a deeper, wider meaning for the whole notion of exchange—one that embraces the traditionally differentiated and increasingly antagonistic economic, social, and political aspects of the market and its institutions. Furthermore, the large-scale market economy can be interpreted as a more-or-less fully realized catallaxy emerging not from bureaucratic direction but as a spontaneously self-organizing and progressively evolving order consistent with the Greek notion of a kosmos.
Praxis is a Greek term in its own right and generally means action, practice, or the practical application of theory. It is also used to denote the idea of a theory of practice—that is, a theory of how to design one’s actions in order to achieve certain results. Douglas McGregor once said that "there is nothing more practical than good theory." As I see it, the really good theories that make a difference in the world are theories of practice, or praxes, grounded in an understanding of how and why people act.
A Catallactic Praxis, then, may be thought of as a theory of how people participate in this evolving market process in their various roles as entrepreneurs, employees, customers, investors, and householders. Such a theory of how the market really works would shed light on the surprisingly difficult questions of how the market is supposed to work, why it doesn’t always work as promised, and how we can make it really work for us. This, of course, is the focus of my inquiry.
Thus, Catallactics x Praxis = Catallaxis.