1 Searle and De Soto The New Ontology of the Social World Barry Smith

2 X counts as Y in context C On Searle’s original theory: X and Y are one and the same part of physical reality (the only reality there is) that is such as to fall under different descriptions

3 MAIN THESIS: There are important provinces of institutional reality which have no underlying X term The Y term is then free-floating; it exists, but it is not a part of physical reality The Y term exists because there are documents which record its existence

4 Y = The money in your (electronic) bank account There is no X term here Rather the money in your bank account is merely represented by blips in the bank’s computer To understand these matters properly we need to pay careful attention to the role of documents and representations in the architecture of institutional reality

5 The Ontology of War

6 WAR events on the ground speech acts

7 WAR speech acts

8 War is an essentially two-leveled affair (speech acts plus physical actions) Unlike wrestling:

9 The Ontology of Chess

10 A Game of Chess physical movements of physical pieces of wood

11 A Game of Chess physical movements of physical pieces of wood thoughts

12 A Game of Chess physical movements of physical pieces of wood thoughts records representations

13 A Game of Chess physical movements of physical pieces of wood

14 A Game of Blind Chess ?

15 A Game of Blind Chess ?

16 A Game of Blind Chess ? thoughts records representations

17 A Game of Blind Chess something non-physical – the thoughts in the minds of the players are not parts of the game – they belong rather to the domain of records and representations

18 What is the Game? thoughts? concepts? nothing at all? (fictionalism)

19 A Game of Blind Chess is something non-physical an abstract pattern, tied to specific players and to a specific occasion?

20 A good chess record Chess masters enjoy a special sort of status because of the (records and representations of the) games they have played NO RECORDS OR REPRESENTATION  the game does not have the chance to shape for good the lives of the parties involved no accountability

21 Two sorts of social reality debts, blind chess games … presidents, driving licenses, cathedrals …

22 A President

23 A California Driving License

24 A Cathedral

25 A Debt an abstract pattern tied to specific parties and to a specific initiating event records representations thoughts, worries thoughts

26 An Informal Debt does not have the chance to shape for good the lives of the parties involved thoughts, worries thoughts, worries

27 Good chess record Good credit record

28 John Searle

29 Constitutive rules create new forms of behavior as the rules of chess create the very possibility of our engaging in the type of activity we call playing chess

30 Constitutive rules have the basic form: X counts as Y in context C

31 Examples X = a certain arm movement Y = signalling to turn left bidding in an auction house threatening your opponent’s bishop signing a debt agreement

32 The Is-Ought Problem how can a mere utterance give rise to a mutually correlated obligation and claim?

33 Constitutive rules The Y term in a constitutive rule characteristically marks something that has consequences in the form of rewards, penalties, obligations to act.

34 Constitutive rules form systems: acting in accordance with all, or a sufficiently large subset of, these and those rules by individuals of these and those sorts counts as playing basketball.

35 Searle: there is a level of brute facts = the facts of natural science independent of all human institutions, including the institution of language From out of this there arises a hierarchy of institutional facts at successively higher levels

36 Searle: When you perform a speech act then you create an institutional fact = a fact whose existence presupposes the existence of certain systems of constitutive rules called ‘institutions’

37 Examples of institutions: money marriage government property inheritance

38 Searle’s Challenge To develop an ontology of social reality that is both realist and naturalistic

39 Realism about social reality social reality exists it is not a mere fiction

40 Naturalism There is one world, and everything in it is governed by the laws of physics (sometimes also by the laws of biology, neurology, …)

41 Social Reality By acting in accordance with constitutive rules we are able to impose certain special rights, duties, obligations – ‘deontic powers’ – on our fellow human beings and on the reality around us. Searle: this ‘involves a kind of magic’

42 Collective Intentionality Human beings are biological beasts. Like other higher mammals they enjoy the capacity for ‘collective intentionality’ … they are able to engage with others in cooperative behavior in such a way as to share the special types of beliefs, desires and intentions involved in such behavior.

43 The Ontology of Social Reality Social facts = facts involving collective intentionality Institutional facts = social facts involving in addition a deontic component; … they are facts which arise when human beings collectively award status functions to physical parts of reality, which means: functions those parts of reality could not perform exclusively in virtue of their physical properties.

44 This works via constitutive rules X counts as Y in context C

45 The X Counts As Y Theory of Institutional Reality Naturalism implies that both the X and the Y terms in Searle’s formula range in every case over token physical entities Recall: There is one world, and everything in it is governed by the laws of physics (sometimes also by the laws of biology, neurology, …)

46 Status functions A line of yellow paint performs the function of a barrier A piece of green-printed paper performs the function of a medium of exchange A human being in a black suit performs the function of a magistrate A tall sandstone building performs the function of a house of god

47 The Problem How can Searle’s naturalism allow a realistic ontology of social reality? = an ontology which takes prices, licenses, debts and corporations to exist in the very same reality that is described by physics and biology?

48 Remember: because of naturalism, the imposition of status functions gives us nothing ontologically new Bill Clinton is still Bill Clinton even when he counts as President; Miss Anscombe is still Miss Anscombe even when she counts as Mrs Geach

49 Turtles It could not be that the world consists of institutional facts all the way down, with no brute reality to serve as their foundation.

50 Turtles Searle: wherever a status-function is imposed there has to be something it is imposed upon Eventually the hierarchy must bottom out in phenomena whose existence is not a matter of human agreement.

51 Naturalism: This works when the Y term exists simultaneously with the corresponding X term (as when an audioacoustic blast counts as an utterance of English) – the two are, after all, identical

52 Naturalism: but how can an event which lasts 2 seconds be the bearer, the ontological support, the physical foundation, of deontic powers (e.g. claims, obligations) which continue to exist for several months?

53 Here, there is no piece of green-printed paper, no organism, no building, no movement of molecules to serve as physical X term in the future.

54 Searle’s answer: “I promise something on Tuesday, and the act of uttering ceases on Tuesday, but the obligation of the promise continues to exist over Wednesday, Thursday, Friday, etc.

55 Searle’s response: “that is not just an odd feature of speech acts, it is characteristic of the deontic structure of institutional reality. “So, think for example, of creating a corporation. Once the act of creation of the corporation is completed, the corporation exists. “It need have no physical realization, it may be just a set of status functions.”

56 Searle’s response: “ The whole point of institutional facts is that once created they continue to exist as long as they are recognized. “You do not need the X term once you have created the Y status function. “At least you do not need it for such abstract entities as obligations, responsibilities, rights, duties, and other deontic phenomena, and these are, or so I maintain, the heart of the ontology of institutional reality.”

57 Searle’s social ontology is thus committed to free-standing Y terms entities which do not coincide ontologically with any part of physical reality entities which are not subject to the laws of physics or biology or neurology

58 The heart of Searle’s ontology deals with entities to which the X counts as Y formula does not apply, because there is no X term

59 A Game of Blind Chess ? thoughts records representations

60 Institutional reality includes not only physical objects and events but also certain abstract entities: corporations joint commitments rights legal systems debts Social Security Numbers (blind chess games) which have no physical realization.

61 The Construction of Social Reality: all sorts of things can be money, but there has to be some physical realization, some brute fact – even if it is only a bit of paper or a blip on a computer disk – on which we can impose our institutional form of status function.

62 But Does a blip on a computer disk really count as money? Do we truly impose status functions on blips in computers? Can we use blips in computers to buy things with?

63 Searle confesses his error “On at least one point … the account I gave in [The Construction of Social Reality] is mistaken. “I say that one form that money takes is magnetic traces on computer disks, and another form is credit cards.”

64 Computer blips + credit cards “Strictly speaking neither of these is money, rather, both are different representations of money.”

65 Blips in computers merely represent money. Title deeds merely record or register the existence of a property right. An IOU note records the existence of a debt; it does not count as the debt.

66 The Credit Card “can be used in a way that is in many respects functionally equivalent to money, but even so it is not itself money. “It is a fascinating project to work out the role of these different sorts of representations of institutional facts, and I hope at some point to do it.”

67 Hernando De Soto

68 The Mystery of Capital Why Capitalism Triumphs in the West and Fails Everywhere Else It is the ‘invisible infrastructure of asset management’ upon which the astonishing fecundity of Western capitalism rests

69 This invisible infrastructure consists precisely of representations, of property records and titles These capture what is economically meaningful about the corresponding assets “The formal property system that breaks down assets into capital is extremely difficult to visualize”

70 The domain of free-standing Y terms = the domain of what exists in virtue of representations “Capital is born by representing in writing—in a title, a security, a contract, and other such records—the most economically and socially useful qualities [of a given asset].”

71 Free-Standing Y Terms are entities of a third kind: there are neither real, physical entities nor abstract, Platonic entities existing outside time and space but abstract entities tied to history and to specific contexts of human behavior

72 Free Standing Y Money does not tarnish does not burn is not subject to physical processes its existence in time rather has the form: does not exist exists

73 US Consumer Transactions (2001) in US$ Billions Electronic 2 Debit Card 11 Credit Card Direct Checks 29 Consumer Checks 35 Cash 51 free - standing Y money

74 US Consumer Transactions (2020) in US$ Billions Electronic 30 Debit Card 49 Credit Card Direct Checks 15 Consumer Checks 24 Cash 52 free - standing Y money

75 De Soto: “The moment you focus your attention on the title of a house, for example, and not on the house itself, you have automatically stepped from the material world into the [non-pnysical] universe where capital lives.”

76 The Mystery of Capital We often take advantage of the abstract (non-physical) status of free-standing Y terms in order to manipulate them in quasi-mathematical ways:

77 we pool and collateralize assets we securitize loans we consolidate debt shareholders can buy and sell their property rights in a factory without affecting the integrity of the physical asset Social Security Numbers are used as identity documents which cannot tarnish and cannot burn

78 The mathematical divisibility of capital means that capital is no longer the privilege of the few

79 What serves as security in credit transactions is not physical dwellings, but rather the equity that is associated therewith. This equity is something abstract that is represented in a legal record or title in such a way that it can be used to provide security to lenders in the form of liens, mortgages, easements, or other covenants.

80 Records and Representations bring a new domain of reality into existence – and this can have positive effects on the lives of human beings Recall: the institution of chess masters Compare: the institution of credit- worthiness records, insurance

81 Property is abstract “The proof … comes when a house changes hands; nothing physically changes.” The relation of property is out there on the side of the objects (not in people’s heads) but it is non-physical

82 the key to modern development: = a reliable means to discover, with great facility and on an ongoing basis, the most potentially productive qualities of resources. “As Aristotle discovered 2,300 years ago, what you can do with things increases infinitely when you focus your thinking on their potential. “Formal property became the staircase to the … realm where the economic meaning of things can be discovered and where capital is born.”

83 The West = a common system of enforceable formal property registrations, which made knowledge functional by depositing all the information and rules governing accumulated wealth and its potentialities into one knowledge base AND MADE PEOPLE ACCOUNTABLE ACROSS THE ENTIRE PROPERTY JURISDICTION

84 Just as the institution of records of chess matches creates better chess so the institution of records of commercial transactions (credit cards) creates better (more honest, more reliable) people

85 Searle’s Response Searle: I agree with most of what Barry has said, but I think that he is being needlessly paradoxical when he suggests that there is some challenge to naturalism here; that somehow or other, in addition to physical particles and fields of force, there are all these abstract entities running around between the molecules. That’s a misleading picture, which comes from treating the object as the unit of analysis.

86 Searle: We’re not interested in the object, we’re interested in the processes or, as I like to put it, we’re interested in the facts. It isn’t the obligation as an object that is the topic of our investigation, rather it is our undertaking an obligation, our recognizing a pre-existing obligation, our fulfilling an obligation. And when you realize this the threat to naturalism disappears.

87 Searle: …if you describe what Barry said without using the ontological categories that he seems to be committed to, then it contains no threat to naturalism at all. I think Barry made a valuable contribution in recognizing that in many cases the representation is all the reality we need to make the entity function. Interestingly, my very first examples were cases of that: paper money was originally a representation; it was a note that said “I promise to pay the bearer on demand.” Then the representation of money became money. … So I agree with the general thrust of the argument, but I think it’s needlessly paradoxical to suggest that we’ve somehow got to alter our whole metaphysics, we don’t.

88 Smith: I disagree with John when he says that there are no problems here for naturalism. He thinks that we can solve the problem by turning away from social objects and by looking at facts. Do you own stock John? Searle: Well, in the aspect that I … Smith: Just say ‘yes’. Searle: All right, I’ll say yes... Smith: And when you’re lying in bed at night are you thinking about the facts and processes that pertain to when you bought them and the transactions that you made? Or are you thinking about the stocks themselves, the objects?

89 Searle: I don’t think about the stock an sich. No, what I think about are not the stocks themselves, but rather their current market value and how it is declining. Because, you see, the subject-predicate structure of language makes it look as if there’s this pre- existing set of objects, my stock, but in fact what we’re talking about is a process: the stocks go up and down, the stocks split, and when they split this doesn’t mean that they physically split, it means that there’s a different entry in the system of representations.

90 in fact what we’re talking about is a process: the stocks go up and down, the stocks split …

91 … and when they split this doesn’t mean that they physically split... it means that there’s a different entry in the system of representations.

92 The End