In two articles, Smits, Buekens, and du Plessis have argued that John Searle’s account of institutional facts suffers serious flaws and should be replaced with a reductive account they call “incentivization.” We argue against their view in two ways. First, the specific flaws they find in Searle are based on misunderstandings. Second, “incentivization,” as they present it, fails as a reduction of strict collective actions and, thus, cannot account for institutional facts such as money or property.

In The Construction of Social Reality, John Searle develops a theory of institutional facts and objects, of which money, borders and property are presented as prime examples. These objects are the result of us collectively intending certain natural objects to have a certain status, i.e. to ‘count as’ being certain social objects. This view renders such objects irreducible to natural objects. In this paper we propose a radically different approach that is more compatible with standard economic theory. We claim that (...) such institutional objects can be fully understood in terms of actions and incentives, and hence the Searlean apparatus solves a non-existent problem. (shrink)

Contemporary discussion concerning institutions focus on, and mostly accept, the Searlean view that institutional objects, i.e. money, borders and the like, exist in virtue of the fact that we collectively represent them as existing. A dissenting note has been sounded by Smit et al. (Econ Philos 27:1–22, 2011), who proposed the incentivized action view of institutional objects. On the incentivized action view, understanding a specific institution is a matter of understanding the specific actions that are associated with the institution and (...) how we are incentivized to perform these actions. In this paper we develop the incentivized action view by extending it to institutions like property, promises and complex financial organisations like companies. We also highlight exactly how the incentivized action view differs from the Searlean view, discuss the method appropriate to such study and discuss some of the virtues of the incentivized action view. (shrink)

Part 1 of this exchange consists in a critique by Smith of Searle’s The Construction of Social Reality focusing on Searle’s use of the formula ‘X counts as Y in context C’. Smith argues that this formula works well for social objects such as dollar bills and presidents where the corresponding X terms (pieces of paper, human beings) are easy to identify. In cases such as debts and prices and money in a bank's computers, however, the formula fails, because these (...) are cases of what he calls ‘free-standing Y terms’, since there is here no X which can count as the corresponding Y. In his response in Part 2, Searle argues that Smith’s critique rests on three misunderstandings: 1. in wrongly presupposing that Searle is trying to analyze the nature of what he calls “social objects”, rather than of social facts; 2. in thinking that the counts as formula is intended as a definition, rather than as a mere mnemonic; and 3. in neglecting the naturalism of Searle’s account. (shrink)

Consider a game of blind chess between two chess masters that is recorded in some standard chess notation. The recording is a representation of the game. But what is the game itself? This question is, we believe, central to the entire domain of social ontology. We argue that the recorded game is a special sort of quasi-abstract pattern, something that is: (i) like abstract entities such as numbers or forms, in that it is both nonphysical and nonpsychological; but at the (...) same time, (ii) through its association with specific players and a specific occasion, tied to time and history. We discover other abstract patterns of this sort especially in the domains of law and commerce. This essay draws on the work in social ontology, we of Hernando de Soto and of John Searle to develop an ontology of the social world based on an analysis of the peculiar interdependence between quasi-abstract patterns and their representations in documents of different sorts. (shrink)

When I was an undergraduate in Oxford, we were taught economics almost as though it were a natural science. The subject matter of economics might be different from physics, but only in the way that the subject matter of chemistry or biology is different from physics. The actual results were presented to us as if they were scientific theories. So when we learned that savings equals investment, it was taught in the same tone of voice as one teaches that force (...) equals mass times acceleration. And we learned that rational entrepreneurs sell where marginal cost equals marginal revenue in the way that we once learned that bodies attract in a way that is directly proportional to the product of their mass and inversely proportional to the square of the distance between them. At no point was it ever suggested that the reality described by economic theory was dependent on human beliefs and other attitudes in a way that was totally unlike the reality described by physics or chemistry. Some years ago, when I published The Construction of Social Reality, I was aware that it had implications for the ontology of economics, but I was not aware that there had already been an important revival of the tradition of institutional economics. It would be an understatement to say that I welcome this interest in institutions; I enthusiastically support it. But I think that in the institutional literature there is still an unclarity about what exactly an institution is. What is the ontology, the mode of existence, of institutional reality? This article tries to add to this discussion. Economics as a subject matter, unlike physics or chemistry, is largely concerned with institutional facts. Facts about money and interest rates, exchange and employment, corporations and the balance of payments, form the very heart of the subject of economics. When Lionel Robbins, in a classic work, tells us that “Economics is a study of the disposal of scarce commodities,”2 he takes for granted a huge invisible institutional.... (shrink)

John Searle began to discuss his recently published book `The Construction of Social Reality' with Anthony Freeman, and they ended up talking about God. The book itself and part of their conversation are introduced and briefly reflected upon by Anthony Freeman. Many familiar social facts -- like money and marriage and monarchy -- are only facts by human agreement. They exist only because we believe them to exist. That is the thesis, at once startling yet obvious, that philosopher John Searle (...) explores in The Construction of Social Reality. (shrink)