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)

What does being money consist in? We argue that something is money if, and only if, it is typically acquired in order to realise the reduction in transaction costs that accrues in virtue of agents coordinating on acquiring the same thing when deciding what thing to acquire in order to exchange. What kinds of things can be money? We argue against the common view that a variety of things (notes, coins, gold, cigarettes, etc.) can be money. All monetary systems are (...) best interpreted as implementing the same basic protocol. Money, i.e. the thing that we coordinate on acquiring in order to lower our transaction costs, is, in all cases, a set of positions on an abstract mathematical object, namely a relative ratio scale. The things that we ordinarily call ‘money’ are merely records of positions on such a scale. (shrink)

Searle claims that his theory of institutional reality is particularly suitable as a theoretical scheme of individuation for work in the social sciences. We argue that this is not the case. The first problem with regulatory individuation is due to the familiar fact that institutional judgments have constrained revisability criteria. The second problem with regulatory individuation is due to the fact that institutions amend their declarative judgments based on the inferential (syntactic) properties of the judgments and in response to regulatory (...) pressure, and not based on descriptive (semantic) properties and in response to matters of descriptive adequacy. These two problems imply that ‘regulatory kinds' (countries, borders, kings) will almost inevitably be disjunctive kinds that are ill-suited for scientific theorizing. This also explains why the law often makes odd pronouncements, e.g. calling ketchup a vegetable, considering an arm bent fifteen degrees to be straight, and not admitting that Somaliland is a country. (shrink)

In our earlier work, we argued, contra Searle, that institutional facts can be understood in terms of non-institutional facts about actions and incentives. Butchard and D’Amico claim that we have misinterpreted Searle, that our main argument against him has no merit and that our positive view cannot account for institutional facts created via joint action. We deny all three charges.

Declarations like “this meeting is adjourned” make certain facts the case by representing them as being the case. Yet surprisingly little attention has been paid to the mechanism whereby the utterance of a declaration can bring about a new state of affairs. In this paper, we use the incentivization account of institutional facts to address this issue. We argue that declarations can serve to bring about new states of affairs as their utterance have game theoretical import, typically in virtue of (...) the utterer signaling a commitment to act in an incentive-changing way. (shrink)