Economics as a Social Science

This book places economic theory on a new foundation: it explains the economy through the social relations people establish with one another through exchange and money. Raimund Dietz accomplishes this by moving from a dyadic to a triadic theoretical architecture. The dyadic thinking prevalent in mainstream economics examines how subjects use scarce means. The triadic perspective, by contrast, starts from the nexus between autonomous subjects who relate to each other through exchange and money. A theory of individual economizing thus becomes a theory of the economy. Taking exchange as the fundamental social operation, Dietz develops economics as catallactics—a theory of the social order constituted through exchange. Money assumes the central place in this theory that its significance for modern civil society demands. This shift in perspective enables a fundamental reformulation of value theory and monetary theory and offers a new understanding of the relationships between market and state, capitalism and socialism, and freedom and social order. From his analysis of money as a social medium, the author also draws implications for the design of the monetary order. He explains why the creation of symbolic money should be a public prerogative entrusted exclusively to the central bank. The book addresses economists, social scientists, and policymakers, as well as anyone seeking to understand the interconnections between economy and society and to help shape their future.