7 Mart 2009 Cumartesi

Law of Catallactic Markets

The two greatest threats to a free civilization: nationalism and socialism.
TWO TYPES OF ORDER: Made Order and Grown Order. The grown order refer to a self-generating or endogenous order that described as a spontaneous order.

The made order, on the other hand, refers to an exogenous order or arrangement (construction or artificial order) deals with a directed social order, as an organisation.

Catallaxy describes "the order brought about by the mutual adjustment of many individual economies in a market." The study of spontenous order is the task of economic theory. Catallactics is a theory showing the way in which the free market system reaches exchange ratios and prices. 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. It explains prices as they are and not as they should be.

The laws of catallactics are not value judgments, but aim to be exact, objective and of universal validity. Catallaxy describes "the order brought about by the mutual adjustment of many individual economies in a market." The study of spontenous order is the task of economic theory. Catallactics is the sciense of spontaneous order of free men-catallaxy men. Catallactic theory, as a wealth-creating or producing game, describes the kind of phenomena that the science of catallactics deals.

A catallaxy is spontaneous order produced by the market through people acting within the rules of the law of property, tort and contract. It describes the order brought about by the mutual adjustment of many individual economies in a market. The element of luck or chance (such as the fact of our being born into a particular family) is as inseparable from the operation of the market as the elements of skill,capacities and tastes. There is no need morally to adjust specific distributions (of income or wealth) which have not been brought about deliberately but are the outcome of a game that is played because it improves the chances of all.

The game of catallaxy is a "wealth-creating game" and not what game theory calls a "zero-sum game" - a contest played according to rules and decided by superior skill, strength or good fortune. The outcome of game for each is determined by mixture of skills and chance in the market mechanism.

Spontaneous order, as oppose to the made order, achieves a more efficient allocation of societal resources than any design could achieve. Market economies are creative of a spontaneous order (the grown order - "a more efficient allocation of societal resources than any design could achieve." This is spontaneous order in which it is far more superior to any order human mind can design due to the specifics of the information required, because the statistics are created by abstracting away from the particulars of the situation.