Abstract

If one wishes to understand what money is, to whom should one turn as the most reliable source of knowledge? Of course, economists propose themselves as the experts on the matter. Who, if not those who study in- terest rates, prices and exchanges could know more about the nature of money? Yet, with a few exceptions, those philosophers in the burgeoning field of social ontology who ask ‘what is money?’ (or, for that matter, ‘what is a marriage?, ‘what is ownership?’, ‘what is a cocktail party?’, etc.) tend to ignore what past and present social scientists maintain on these issues. John Searle comes to mind as having such an insulated approach. Since The Construction of Social Reality, Searle has repeatedly claimed to have found no adequate definition of institutions on the part of those scholars who are the most concerned with them. Understanding Institutions leaves a different impression about the state of the art. In this elegant book, Francesco Guala shows that social scien- tists, economists in particular, can actually be trusted in how they under- stand the notions which they apply. Guala finds in game theory the relevant conceptual framework in which to explore the nature of institutions. Fol- lowing David Hume, David Lewis, and Edna Ullmann-Margalit, he defends a view, termed the rule-in-equilibrium account, which conceives institutions as solutions to coordination problems. For example, to determine what a marriage is, we must look at the range of coordination dilemmas which married couples have resolved: Who cooks? Who picks up the children f rom school? Who washes the dishes? etc. Likewise, the institution of own- ership states who will make use of what? The highway code indicates which side of the road to drive on. Cocktail parties? I gather they specify when to entertain and who to bond with.