The Nature Of Social Reality: Issues In Social Ontology 0367188899, 9780367188894, 0367188937, 9780367188931

Table of contents :
Part 1. Setting the Context: 1. Why social ontology? --
Part 2. A General Conception: 2. Ontology and the study of social reality : emergence, organisation, community, power, social relations, corporations, artefacts and money --
Part 3. Topics in Scientific Ontology: 3. The nature of the firm and peculiarities of the corporation
4. The modern corporation : the site of a mechanism (of global social change) that is out-of-control?
5. A theory of money
6. The positioning and credit theories of money compared --
Part 4. The Nature and Dynamics of Processes of Emergence, Reproduction and Transformation: 7. Emergence, morphogenesis, causal reduction and downward causation --
Part 5. Consequences for Projects of Human Emancipation: 8. Possibilities for emancipatory social change.

Citation preview

‘If modern economics and philosophy are largely neglectful of ontology, they are especially so of social ontology. Tony Lawson’s impressive body of work is an exception to this, as is this strongly recommended book.’ John B. Davis, Professor Emeritus of Economics, Marquette University and University of Amsterdam ‘Society needs innovative, critical thinking which enlightens on the complex and evolving nature of social reality, not least its economic aspects. Tony Lawson latest contribution on this is a must-read.’ Sheila Dow, Emeritus Professor of Economics, University of Stirling ‘As is universally, and rightly, recognised, Tony Lawson is the leading scholar questioning the (social) ontology of economics. In this compelling volume, he takes a number of important steps forward, drawing on the more constructive aspects of his work in theorising such topics as money, the modern corporation, and alternative futures.’ Ben Fine, Professor of Economics, School of Oriental and African Studies, University of London ‘The Nature of Social Reality is the book that we have all been waiting for: a rigorous philosophical account of social reality, written by a scholar with impeccable credentials as an economist and social theorist. In an intellectual environment in which philosophers are becoming increasingly interested in the nature of social phenomena (and contemporary social scientists have growing cause to examine their implicit philosophical commitments), Tony Lawson has delivered an invaluable resource at the perfect moment.’ Ruth Groff, Political Science, Saint Louis University ‘When one thinks of Cambridge social ontology, one thinks of Tony Lawson, long the leader of that important current. It is very welcome therefore to have this collection of essays. Those unfamiliar with Lawson’s work will encounter one of the most forceful and influential statements on the nature of social reality to emanate from modern economics. Those already familiar will find their understanding deepened.’ Doug Porpora, Professor of Sociology, Drexel University ‘In this splendid book, the philosopher-economist Professor Tony Lawson makes a powerful case for placing economics, and indeed all social theorising, on proper ontological foundations. An essential read for all social scientists.’ Lord Robert Skidelsky, Emeritus Professor of Political Economy, Warwick University

The Nature of Social Reality

The social sciences often fail to examine in any systematic way the nature of their subject matter. Demonstrating that this is a central explanation of the widely acknowledged failings of the social sciences, not least of modern economics, this book sets about rectifying matters. Providing an account of the nature of social material in general, as well as of the specific natures of central components of the modern world, such as money and the corporation, Tony Lawson also considers the implications of this theory regarding possibilities for social change. Readers will gain an understanding of how social phenomena, from tables and chairs, to money and firms, and nurses and presidents are constituted. Fundamental to Lawson’s conception is a theory of community-based social positioning, whereby people and things within a community become constituted as components of emergent totalities, with actions governed by the rights and obligations of relevant members of the community. This theory isolates a set of basic principles that will offer the reader an understanding of the natures of all social phenomena. The Nature of Social Reality is for anyone who wishes to gain a grasp of the nature of social phenomena that goes beyond the superficial. Tony Lawson is Professor of Economics and Philosophy at the University of Cambridge, UK. He is also a co-editor of the Cambridge Journal of Economics and co-founder of the Cambridge Realist Workshop and the ­Cambridge Social Ontology Group.

Economics as Social Theory Series edited by Tony Lawson, University of Cambridge

Social Theory is experiencing something of a revival within economics. Critical analyses of the particular nature of the subject matter of social studies and of the types of method, categories and modes of explanation that can legitimately be endorsed for the scientific study of social objects are re-emerging. Economists are again addressing such issues as the relationship between agency and structure, between economy and the rest of society, and between the enquirer and the object of enquiry. There is a renewed interest in elaborating basic categories such as causation, competition, culture, discrimination, evolution, money, need, order, organisation, power probability, process, rationality, technology, time, truth, uncertainty, value etc. The objective for this series is to facilitate this revival further. In contemporary economics the label ‘theory’ has been appropriated by a group that confines itself to largely asocial, ahistorical, mathematical ‘modelling’. Economics as Social Theory thus reclaims the ‘Theory’ label, offering a platform for alternative rigorous, but broader and more critical conceptions of theorising. 47. Markets Perspectives from Economic and Social Theory William A. Jackson 48. Keynes Against Capitalism His Economic Case for Liberal Socialism James Crotty 49. The Nature of Social Reality Issues in Social Ontology Tony Lawson For more information about this series, please visit: https://www.­routledge. com/Economics-as-Social-Theory/book-series/EAST.

The Nature of Social Reality Issues in Social Ontology

Tony Lawson

First published 2019 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Tony Lawson The right of Tony Lawson to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Lawson, Tony, 1950– author. Title: The nature of social reality / Tony Lawson. Description: 1 Edition. | New York : Routledge, 2019. | Series: Economics as social theory | Includes bibliographical references and index. Identifiers: LCCN 2019001602 (print) | LCCN 2019005067 (ebook) | ISBN 9780429199035 (Ebook) | ISBN 9780367188894 (hardback : alk. paper) | ISBN 9780367188931 (pbk. : alk. paper) | ISBN 9780429199035 (ebk) Subjects: LCSH: Sociology. Classification: LCC HM585 (ebook) | LCC HM585 .L3895 2019 (print) | DDC 301—dc23 LC record available at https://lccn.loc.gov/2019001602 ISBN: 978-0-367-18889-4 (hbk) ISBN: 978-0-367-18893-1 (pbk) ISBN: 978-0-429-19903-5 (ebk) Typeset in Palatino by codeMantra

For Heather

Contents

Preface and acknowledgements

xi

Part 1

Setting the context

1

1 Why social ontology? 3 Part 2

A general conception

29

2 Ontology and the study of social reality: emergence, organisation, community, power, social relations, corporations, artefacts and money 31 Part 3

Topics in scientific ontology

83

3 The nature of the firm and peculiarities of the corporation 85 4 The modern corporation: the site of a mechanism (of global social change) that is out of control? 125 5 A theory of money 155 6 The positioning and credit theories of money compared 166

x Contents Part 4

The nature and dynamics of processes of emergence, reproduction and transformation

195

7 Emergence, morphogenesis, causal reduction and downward causation 197 Part 5

Consequences for projects of human emancipation

223

8 Possibilities for emancipatory social change 225 Index of names Index of subjects

257 259

Preface and acknowledgements

The title of this book perhaps warrants a comment. I hesitated before using it. This is not because I think it in any way inappropriate. On the contrary, the book is precisely about the constitution and nature of social reality, the subject matter of social ontology; and the subtitle indicates the book’s inevitably partial focus1. I was concerned, though, that such a general-sounding formulation would send a signal that the material covered inevitably bears little relevance to concerns of a practical nature. I am aware that many who are impatient to get on with changing the world tend to see all attempts at general theorising as largely a waste of resources, as exercises that cannot have a practical bearing. I am also aware that books with general-sounding titles do frequently conform to this image and expectation. Let me immediately stress, then, that whatever impression the title might encourage, and indeed whatever the reason for undertaking ontological reflection in the first place, my motivation in writing the book is far from that of elaborating an account that is without relevance to, or has no bearing upon, projects of social intervention. On the contrary, I take the view that social ontology and its results are especially vital to such concerns and shall be suggesting that if practically oriented projects are to be successful, they more or less require an explicit attention to social ontology and its results. I shall argue, indeed, that the failure of much practical endeavour can be put down precisely to ontological neglect, and that the lasting nature of various failures means that an ontological turn in practical reasoning in such situations is effectively necessitated. In truth, social ontology is relevant to more or less everything we do. At some level it is inescapable; we all make assessments of the nature and constitution of social reality continuously already just in order to get by. However, we mostly do so implicitly and subconsciously, so that our holding of ontological viewpoints or ‘commitments’ is often unrecognised. The case I shall be making, then, is not that we take up an endeavour that in substance is entirely new, but that we seek to be more explicit and systematic about many of the things we all continually do already. By rendering explicit preconceptions of nature of social reality already at some level held, the latter can thereafter be subject to continuous critical scrutiny

xii  Preface and acknowledgements and correction, allowing that the ways in which we pursue other forms of practice be more informed and so potentially more efficacious. In this fashion I believe there are significant benefits to be had, not least where the goal is to transform the world into a better place. In the chapters that follow, I shall be arguing both for a general ontological turn and for a specific ontological conception. In regard to the former, I am especially concerned with practices bound up with social theorising in the academy. For in branches of the latter as much as anywhere, social ontology of an explicit, systematic and sustained sort is all too often neglected and indeed confined to the margins of explanatory endeavour. This is a significant mistake. It accounts in large part, I shall argue, for widely acknowledged and rather persistent significant failures in various branches of the social academy, and in fact underpins a gross misallocation of resources. That noted, however, I shall not be suggesting that social ontology is a substitute for, or somehow more important than, substantive social (scientific) theorising. I argue, rather, that the two − ontology and substantive enquiry − warrant being pursued together, in processes of linked or co-development. For this to happen, though, an ontological turn is required in academic social analysis; practices of systematic and sustained reasoning about the nature of the social world, explicitly pursued, need to be recovered from the margins. If the contents of the ensuing pages all, in one way or another, support the case for a general turn to explicitly pursued social ontology, my primary focus throughout is with advancing and defending a specific ontological conception. It is one that has been evolving for some time. According to it, in human interactions there are a relatively small number of basic principles everywhere at work that either account for, or are at least fundamentally involved in, essentially all social reality constitution. I do attempt to make this assessment apparent in most of the included essays. However, it is one that is perhaps easier to convey by putting together a number of interrelated illustrative contributions on the topic. That is the advantage of a book. This one represents a first attempt to provide a comprehensive picture of how I suppose social reality everywhere to be formed and sustained. That said, each chapter has been written as a standalone piece, so the reader can enter the book by picking out any one of the chapters. Eight essays or chapters are included, four of which are previously unpublished. When I first submitted a manuscript to Routledge, it contained only contributions that had been previously published. The Routledge commissioning editor persuaded me to add at least one that was new. That delayed the project by about two years, but led to a collection in which half the content is previously unpublished. From my own point of view at least it was, in retrospect, worth it. For help with producing this book, I am, as with previous ones, indebted to far more people than I can mention − including, no doubt, many

Preface and acknowledgements  xiii whose influence and support I might struggle to remember. My greatest debt, however, is very clear to me; it is to fellow members of the Cambridge Social Ontology Group. This motley collection gets together at various times and places, including a regular meeting for two hours every Tuesday morning, in term time and beyond, year after year, to discuss matters of social ontology just for the pleasure of so doing. The group includes regulars, along with others who join for a period whilst studying or teaching either at Cambridge or within travelling distance, along with (or including) some who specifically visit Cambridge for a term, a year or sometimes more for the explicit purpose of joining the discussion. Again, this grouping, over the period I have been writing the essays that follow, has included too many people for all to be mentioned. However, I must single out Phil Faulkner, Clive Lawson and Stephen Pratten, who have been ever present since the group was formed about 20 years ago and whose influence has been immense. While writing the book, I also took part in a six-year project on social morphogenesis organised by Margaret Archer, a project for which two of the chapters included below were originally written. I am very grateful to all members of this project, too, for numerous critical discussions and suggestions − not least to Doug Porpora, who is always a reliable sparring partner. I should also acknowledge explicitly my debt to John Latsis, Nuno Martins, Jamie Morgan and Roy Rotheim, who have provided continuous critical input and/or support from afar. And I am very grateful as well to the Independent Social Research Foundation (ISRF) for generous funding support. As noted above, the conception defended in the pages that follow has been long evolving. But I was able properly critically to assess its explanatory power and limitations and to start writing it all up only when, in 2010, the ISRF granted me a three-year research fellowship (whereby my teaching and faculty administrative duties for that period were ‘bought out’). That backing was essential for the research undertaken and remains much appreciated. When I produced my first book, Economics and Reality, now more than 20 years ago, I acknowledged in its preface the support and encouragement I received, during an inordinately long period of writing it, from my daughter Heather. This included her generous offer, at the age of seven, to finish off the book for me, if necessary, when she was grown up. Fortunately, this ultimately proved not to be necessary. At that time, I did promise Heather that I would eventually dedicate a book to her, though I never thought it would take me so long to bring this about. Progress, it seems, is something that I make, if at all, only very slowly. Finally, however, I happily get around to fulfilling that early promise; this is a book for Heather. Tony Lawson Cambridge, December 2018

xiv  Preface and acknowledgements

Sources of chapters 1. Why Social Ontology? (2018). Previously unpublished 2. ‘Ontology and the Study of Social Reality: Emergence, Organisation, Community, Power, Social Relations, Corporations, Artefacts and Money’, (2012). Cambridge Journal of Economics, 36(2): 345–385. 3. ‘The Nature of the Firm and the Peculiarities of the Corporation’, (2015). Cambridge Journal of Economics, 39(1): 1–32. 4. ‘The Modern Corporation: The Site of a Mechanism (of Global Social Change) that is Out-Of-Control?”, (2015). In Archer, Margaret (ed.), Social Morphogenesis: Generative Mechanisms Transforming the Social Order, New York: Springer, pp. 205–230. 5. A Theory of Money, (2018). Previously unpublished 6. The Positioning and Credit Theories of Money Compared (2018). Previously unpublished 7. ‘Emergence and Morphogenesis: Causal Reduction and Downward Causation?’, (2013), in M. S. Archer (ed.), Social Morphogenesis, New York, Springer, pp. 85–105 8. Possibilities for Progressive Social Change. Previously unpublished. For permissions to publish here material that has already appeared elsewhere, I am grateful to Cambridge Journal of Economics/Oxford University Press (Chapters 2 and 3), and to Springer International Publishing (Chapters 4, and 7).

Note 1 I might have made the title sound less assertive by including the qualifier: ‘A Conception of …’. But in truth, all references to aspects of reality rest on fallible assessments; I would be merely stating the obvious.

Part 1

Setting the context

1 Why social ontology?†

1 Introduction Why bother with social ontology, with studying in a systematic fashion the basic nature and structure of social reality1? By ‘social reality’, or ‘the ­social realm’, I refer to all those phenomena whose existence depends n ­ ecessarily2 on human beings and their interactions. Why study the n ­ ature of such phenomena? Indeed, why study the nature of anything? One reason is simply that it is a very satisfying thing to do. It is an ­obvious focus for the play of idle curiosity and the exercise of sustained critical reasoning, the fulfilment of either of which is of immense value in itself3. But the more obvious motive − and no doubt the more widely acceptable one, especially to the practically minded − is that, with any phenomenon of interest, understanding its nature or essential properties allows us to relate to, or interact with, it in more knowledgeable and competent ways than would otherwise be the case. Of course, where the goal is simply to enjoy (use, apply, care for, play  with) some particular phenomenon, it typically will not be necessary to delve especially deeply for an adequate level of enjoyment to be achieved. It is possible to swim in oceans, climb mountains, play games, use human artefacts − for example, walk across bridges, live in houses, watch ­computer videos and drive cars − and even spend money and own things, without knowing overly much about the underlying materials and structures which ultimately make such practices possible. Even in cases such as these, of course, some understanding of m ­ aterials involved is required and, in many cases, a deeper understanding will likely increase the level of enjoyment to be had. However, where the ­objective is, or requires, more of an intervention − say, to design and/or create or transform something − it is almost always essential that a deeper understanding is acquired, of both 1) the materials involved, to ensure the latter support the capacities desired of the created/transformed entity’s components, and 2) all underlying organising structures, to additionally ensure overall coherence. The latter (organisational) coherence is always

4  Setting the context an essential feature. If, say, a bridge or house were taken apart and then reassembled in a blind or random fashion, the resulting item would be unlikely to have the causal capacities required of a bridge or house itself, however appropriate the materials used for the parts. If deeper understandings of the materials and various structures play essential roles in ensuring that constructed or transformed phenomena possess appropriate capacities and achieve coherence, such insights are equally relevant to choosing or designing the tools, methods or ­procedures etc., that are appropriate for working on the sorts of materials or structures involved. Even where the task is merely to maintain or ­preserve something − say, a national park, a finished artefact, a threatened species or the health of a human or some other being − it is usually essential actively to ensure that the tools, materials, procedures and methods selected for the task are appropriate to the nature of the phenomenon in question. Fundamentally, it takes very little reflection to see that it is just because different phenomena have contrasting natures that there cannot be a specific tool, method, technique, procedure or indeed practice which is appropriate for all planning, construction, transformative or maintenance tasks, irrespective of the object and goal; ontological reasoning is always effectively required at some level if we are to intervene anywhere in anything at all competently4. Such observations are clearly quite general; they apply across the board, to all phenomena, including all those of the social realm. To be able to act competently in a creative, transformative or merely sustaining fashion, it is as essential in the social domain as in any other to bring ontological insight to bear in pursuing whatever is the goal or objective, including fashioning tools and methods appropriate to the tasks to be undertaken. Simply put, capable successful intervention into the social realm likely ­necessitates, and always stands to benefit from, explicit social ontological reasoning.

2  The general context If, as I hope, this answer to the question ‘Why social ontology?’ appears rather obvious and uncontentious, even banal, at least on reflection, it is then worthy of note that the general background context in which this book is written is one wherein many groups of social theorists within the academy in fact proceed very differently. Despite the centrality to all that happens in the social world of both human beings and the social ­structures through which human beings and indeed artefacts are organised, a surprising number of social theorists, when embarking on substantive analyses, pay almost no attention at all to insights bearing on the nature of these (or any other) factors. Instead, the preferred option is to s­ elect the types of methods, procedures or tools to be employed before, and quite independently of, knowing the task to be undertaken, the

Why social ontology?  5 nature of the phenomena involved, the context or any other specifics of the situation. Methods of intervening are laid down in an a priori fashion, sometimes vaguely rationalised as being ‘scientific’, ‘proper’ and/or ‘rigorous’ or some such, without explanation, and without regard to topic, materials or setting. The result, typically, is a failure to illuminate or provide anything of practical value (though rarely is a connection of this result to the ­observed rather suspect way of proceeding noted). 2.1  The case of modern academic economics Although the practice described is relatively widespread, it is convenient to illustrate with a specific (though not insignificant) example with which I am especially familiar. This is the case of modern academic economics. Economists do indeed widely suppose, prior to undertaking any analysis, that there is one specific way of proceeding that is appropriate for all ­occasions, whatever the context, object or task. This is to employ methods of mathematical modelling. The objective is to produce mathematical models intended first to represent social reality and thereafter to serve as tools for determining courses of action for bringing about considered-to-be desirable changes to this reality. In the case of the hugely dominant mainstream project of modern economics, its proponents are even prepared to insist that certain sorts of modelling methods be e­ verywhere employed, an a priori insistence that is actually the project’s defining feature (see ­Lawson, 2015a). But overly many ‘heterodox’ economists frequently adopt these methods too, albeit in a less dogmatic fashion (see Lawson, 2015a, 2017). Let me elaborate this situation a little, albeit very briefly, for doing so does very straightforwardly illustrate the need for an ontological input here, as everywhere else. The first observation to make is that the academic discipline of e­ conomics is certainly not in a healthy state and this situation is now widely recognised, including by many economists. In fact, the discipline has failed to provide significant insight for the last 60 years or more5. A feature that, as noted, is largely not recognised, however, is that this persistent failure is indeed to a very large extent the result of sustained ontological neglect. Of course, ontological commitments of some sort are always a feature of human practices at some level, including those of economists in the academy. In all cases there are conditions for which any ­practices chosen would be appropriate to their intended task; so the choice of a set of practices implies a commitment to the idea that the relevant conditions are in place. Any such choice carries presuppositions of what social reality must be like, at least where the expectation is to be able to provide insight. Thus, the charge of ontological neglect that is a­ ppropriately levelled against modern social theorists such as academic economists is not that ontological commitments are absent, but that, typically, they are left overly implicit and unexamined. The problem, where this is so, is that

6  Setting the context the ontological presuppositions thereby carried very often turn out not to be at all adequate to the conditions in which the practices or methods of analysis which carry them are applied. In short, a failure to undertake ontological reasoning in an explicit and sustained fashion has a tendency to lead to analytical incoherence overall. This, I am suggesting, is precisely the situation of modern economics. As already noted, the modelling emphasis taken has not resulted from explicit ontological reasoning, but rather takes the form of a priori ­stipulation. A consequence is that the ontological presuppositions to which those who wield these modelling methods thereby commit themselves remain largely unexamined, and in the event turn out to be not at all like the reality these modellers seek to investigate. What are these commitments? The conditions for successes using the sorts of mathematical modelling methods widely preferred by ­economists are, first, a prevalence of closed systems, namely configurations in which event regularities or correlations occur. In turn, to conduct general ­theorising that remains consistent with closed systems, the entities or ­factors posited in any such theorising must be formulations of isolated ­atoms. By an atom, I simply mean a factor that for any given set of conditions (X) has the same independent and invariable effect (Y) whatever the wider context. The stipulation that any such factor acts in isolation is required to guarantee that nothing can counteract the effect (Y), so that Y is actualised, and X and Y always occur together (and deduction and prediction are possible). So, the insistence by economic theorists that methods of modelling of the relevant sort be everywhere wielded commits them to the view, in ­effect, that social reality consists of a ubiquity of closed systems of isolated atoms. It is easy enough to see that modelling formulations of modern ­economics are indeed everywhere manifestations of this atomistic ontology. But it is equally easy to demonstrate that social phenomena of the real world are not in conformity at all. Rather, social reality everywhere is found to be in transformative ­process (with everything social, including embodied personalities, being ­repeatedly transformed through practice), undermining the presumption of atomism. In addition, social phenomena are found everywhere to be relationally constituted (employers are internally/constitutively related to employees, teachers are so related to students etc.), undermining the presumption of isolation and indeed isolatability. These assessments ­(frequently defended elsewhere, e.g., in Lawson, 1997, 2003, 2015a, 2017) are elaborated in due course below. But their validity is surely evident to all on reflection (even if the details require a good deal of investigation and expounding). As Edward Fulbook (2009) observes, when the idea that social reality is processual and relational in nature is ­emphasised, the suggestion is seemingly never opposed; rather, commitments to preconceptions of

Why social ontology?  7 ­ ecause most m ­ odellers isolated atoms persist, in my experience, simply b never reflect upon such matters. So, it is indeed at the level of ontology that we find the fundamental explanation of the unhappy state of modern economics and specifically of why the central assumptions of modern economics are almost always unrealistic, and explanatory insight almost never obtained. And it is at this level, too, that we find the explanation of the failure of modern economics to provide insight for the past 60 years or so. For this is the period in which mathematical modelling has been dominant and, with modelling methods being insisted upon in an a priori fashion throughout, ontological reasoning of an explicit sort neglected. The situation is even more discouraging, however, in that an ontology of isolated atoms not only underpins the attempts of economists to ­employ their models to represent the social world, but also, of course, underscores attempts to use these models in seeking to transform social reality in a capable, informed manner. The dominant procedure runs as follows. The typical models consist of sets of equations, where each equation relates some measurable phenomenon (the dependent ‘variable’) to numerous other phenomena (the independent ‘variables’). Some of the latter are considered exogenous, and under the control of the economic decision makers (say, tax or interest rates or levels of public spending). Other independent variables have values that are determined either by using additional equations (in which they now figure as dependent variables) or by being guessed by the modellers. Policy advice or design is subsequently arrived at by way of choosing different sets of values for exogenous ­variables and simulating the model to see what happens in terms of values realised by the dependent variables in each case. The goal is to determine a set of values for both the exogenous variables and the corresponding/resulting dependent variables that the decision makers find desirable/acceptable. Clearly, the structure of this sort of tool means that the focus is on ­prediction, control and amelioration of events (rather than, say, structural transformation and emancipation). And the implicit ontological conception of isolated human beings not only remains, but is absolutely essential to the possibility of model simulations, through the human participants being of a nature as to act always (as automatons) in determinate predictable ways when stimulated or triggered. The history of all such models is predictive failure, of course. This should be evident to anyone observant of the repeated revisions to ­forecasts as are made. Less is made of this when governments and modellers adopt ­similar orientations. But it was especially evident in the UK during the ‘Brexit’ campaign, when each side of the debate made notably contrasting predictions of the effects of leaving (and indeed of staying within) the European Union. Here it was especially clear to all that such models are simply not to be taken seriously.

8  Setting the context Of course, the sorts of modelling practices just described are variations on a theme; various sorts of mathematical models and modelling methods exist, and some models are simulated in different ways. But all carry the same sort of ontological commitments, and all are essentially irrelevant. So, the sorry state of modern economics persists because ontology is neglected. Rarely do academic economists question the nature of social being in general. Nor even do they question the nature of specific components of their analyses, even including supposedly fundamental ones such as firms/corporations or even money. In the case of firms, for example, it is standard practice to proceed as ­follows. Equations focused on production, or ‘production functions’ ­(relating production/output to other variables), along with ‘cost functions’, are formulated, and thereby, after making some assumption about prices and perhaps other factors, ‘profit functions’ are derived6. It is asserted that profit-maximising positions of some sort (depending on constraints) are achieved. The term ‘firm’ enters the analysis, if at all, as the name for the atomistic agent that is supposedly subject to these equations and carries out the optimising calculation. This is about as much of the ‘nature’ of the firm that, typically, is specified. Sometimes, it is true, though extremely rarely, Ronald Coase’s (1937) paper ‘The nature of the firm’ is mentioned as if this deals with the relevant subject. But this paper, seemingly not actually read, is misnamed; it addresses only the question of why a­ llocations or transactions determined within the firm are not instead left to ‘the market’ to sort out (the answer being that amongst the variables included in profit-optimising decisions of entrepreneurs are transaction costs). The nature of the firm is a topic not actually covered. If the sorry state of the discipline leads Coase to observe that, according to the dominant theory produced, it is not clear that firms should exist, Frank Hahn concludes similarly in focusing on money: ‘The most serious challenge that the existence of money poses to the theorist is this: the best model of the economy cannot find room for it’ (Hahn, 1982, p. 1). With money as with firms, though, most economists ignore any such ­reflections in practice. Rather, the term ‘money’ usually figures as the name given to a variable in a macro or aggregate equation, though with little thought for what the label might mean; economic categories are ­indeed regularly used merely to name variables, with the natures of the phenomena themselves left unexamined. Where, in the case of money, data are involved, those who supply them typically avoid inquiring into, or ­elaborating upon, the nature of money by providing, often without comment, a range of different ‘measures’ (usually denoted M0, M1, M2, M3…). This allows modellers to experiment with each and any set of figures and focus merely on the issue of which set seemingly works best in terms of (within-sample) data fit. Clearly, none of this (or any of the related ways of proceeding) is nearly good enough. But I have covered all of this so often elsewhere that I will not

Why social ontology?  9 go into greater detail here (again, see, e.g., Lawson, 1997, 2003, 2015a, 2017). It ought to be clear that ontological reasoning is usually essential, certainly always potentially beneficial, to serious study. I have merely ­described something of the situation of modern academic economics to indicate the sort of situation that can result from its neglect. It was not always so. Traditionally, the relevance of ontological ­theorising of an explicit sort was widely recognised, even within economics (see Lawson, 2018). Indeed, prior to the modelling turn, ontological reasoning usually figured in a prominent, systematic and sustained fashion in both substantive texts (as a glance at the writings of the likes of Marx, Veblen, Keynes and Hayek, amongst others, quickly reveals7), and the formulation of specific critiques. Examples of the latter critiques include Veblen’s (1900) coining of the term ‘neoclassical’ precisely for those who embraced an evolutionary ontology, but retained methods that carry inconsistent ontological presuppositions or ‘preconceptions’; and Keynes’ (1937 [1973]) warning that the then-novel techniques of econometrics carry ontological commitments that do not fit the nature of social material (see, e.g., Lawson, 2013, 2017). So, if the academic discipline is to reorient itself to recover relevance, it actually needs to reclaim the sorts of ontologically explicit ways of proceeding that, before the unfortunate take-up of mathematical modelling, already widely prevailed.

3  The specific context The foregoing indicates something of the general background context against which the essays collected below were produced. I myself have been positioned in a faculty of economics throughout, and so have no doubt been highly influenced by the situation just described. But the ­writing of these essays also had a more specific or particular context, and I should perhaps also indicate something of this here. I have, to this point, stressed that social ontology, systematically pursued, has been generally neglected in departments of social theorising and most obviously the ­economics academy, at least over the last 60 years or so. I should now also acknowledge that it has not, however, been totally absent, even in recent times, and even from faculties of economics − albeit it has mostly existed only in a small way and, in the main, within marginalised enclaves. I have been fortunate over many years to have had continuous access to one such enclave, a particular context wherein social ontology has a­ ctually had a persistent explicit presence. Ontology – and in particular social ontology, pursued in an explicit and sustained fashion – has been the central focus and concern of the Cambridge Realist Workshop, which has been up and running for the best part of 30 years now; and for nearly 20 years it has been complemented by weekly meetings of the Cambridge Social Ontology Group. The output of those involved has never been a central feature of the economics curriculum8. But in local seminar rooms, cafés

10  Setting the context and pubs, ontological discussions and debate, systematically ­pursued, have persisted and even flourished9. I might note that these discussions are usually motivated mostly, if not wholly, by simple curiosity. They are pursued in large part for the enjoyment of the process of advancing understanding for its own sake, ­relatively unfettered by predetermined practical constraints10. In the forums in question, all directions of exploration are always open, albeit with paths taken inevitably reflecting the situated interests of the participants11 and with a concern for real-world relevance remaining upmost. But prima facie bizarre notions, ideas or hypotheses are often advanced and ­examined along the way, and very often with a good deal of humour as well as criticality. However, even if the many discussions are not primarily motivated by practical matters, the conclusions or insights reached always, and ­necessarily, carry implications of a moral and political sort, and so bear on practical concerns. The latter is unavoidably the case simply because the focus is first and foremost on social phenomena, and these − unlike those studied in physics, say − depend on us for their existence and so are always already oriented to human beings and their practices, modes of coordination and ultimately wellbeing. So, in collecting the results of ontological reasoning in a book, the content presented inevitably has a significant practical dimension. If it is clear from the foregoing that the ideas that follow owe much to being scrutinised by participants in the noted Cambridge forums, they have been subject to critical commentary in other groupings as well. Most significantly, for a period of about six years prior to producing this book, I participated annually in a project on social morphogenesis directed by Margaret Archer. Here the international participants were drawn from a range of social theory departments and concerned with specific questions relating to how society is changing. A series of books emerged from the annual meetings of the group (see Archer, 2013, 2014, 2015, 2016, 2017), and it was in this series that two of the papers included in the current volume were first published. The ideas in question have been further critically examined when, on two occasions over the last few years, participants of the Berkeley Social Ontology Group organised by Jennifer Hudin and John Searle visited Cambridge for joint workshops with the Cambridge group. Some of the interactions and related interventions have formed the content of papers that also have been published along the way (see, e.g., Lawson, 2016a, 2016b, 2018; Porpora, 2016; Searle, 2016, 2017; Wight 2016). The foregoing, then, indicates something of the general and specific contexts in which the ideas contained in the papers collected together below were formulated and tested. In the course of producing them, I became increasingly confident in the relevance and explanatory power of the basic conceptual framework sustained of how social reality is constituted. The papers included in the current volume represent but an indicative

Why social ontology?  11 selection of those so produced; however, taken as whole the collection does, I think, comprise a comprehensive coverage of the basic principles or processes that I have come to believe are essential to the constitution of the social realm. Let me, then, briefly indicate something of the content of these papers or chapters that follow, and so of the conception I defend.

4  The basic ontological orientation In my research I have found it useful to make a distinction between ­socio-philosophical ontology and socio-scientific ontology (see Lawson, 2015b). The former is concerned with features that hold or operate ­throughout the social domain − that is, features of social being per se, that comprise in effect (or anyway include) basic principles according to which social ­reality is everywhere constituted. In contrast, socio-scientific ontology is concerned with how particular outcomes or social existents (money, markets, cities, corporations, technology, gender, universities) are formed, based on, or in line with, the more general features elaborated within philosophical ontology. Let me say something of the broader features of the conception ­sustained. I have already noted certain general features that I take to be reasonably self-evident, namely that the social realm or its phenomena and aspects are processual and relational in nature. I noted these when explaining the failings of the modelling project of modern economics. Let me at this point elaborate each a little. The most basic sense in which social reality is processual, in brief, is that it exists only in being reproduced and/or transformed through the sum total of our individual practices. As interpreted here (and noted at the outset), social reality comprises all those phenomena whose existence ­depends necessarily on us. We each of us, when we come to act, find this social reality to be present and given to us. As such, we draw upon aspects of it in our individual practices, albeit necessarily in situated ways, with limited understandings, pursuing our particular situated concerns in conditions of neither our own making nor choosing. The point is that in so pursuing our individual concerns, along with the simultaneous actions of all others following their own situated individual concerns, we thereby collectively and continuously, if mostly unwittingly, effect the reproduction and/or transformation of social reality as a whole, albeit in a manner that is again mostly poorly understood. The result is that this social reality, in depending on us, and so always on transformative human actions, is processual in nature, and in fact constantly evolving − and at a faster rate, seemingly, than much of the stuff studied in the non-social sciences. The social realm is both the unacknowledged condition and unintended outcome of our individual practices, existing as a process. Within this transformative process, new and often revolutionising technological products continually emerge, whilst conflict, contestation, crises as well as mistakes are endemic.

12  Setting the context In order to outline the sense, or manner, in which social reality is generally relational in nature, I need briefly to say something of the theory of social positioning that is defended throughout the book. According to it, social relations of a specific sort are fundamental in that they bind and organise various kinds of phenomena as components of social systems or totalities that constitute communities. Let me briefly elaborate. A general thesis of the book is that reality everywhere (for the social and the non-social alike) is marked by specific processes of emergence. These are processes whereby various elements in existence at any given point in time become relationally organised to form components of some novel or ‘emergent’ totality, with the latter in turn perhaps becoming in due course itself organised as a component of a yet higher-level totality and so on. In all such processes, whatever the level (i.e., whether social or not), the various sorts of elements that come to form components of novel t­ otalities have somehow to bind together. In the non-social world this binding may happen by way of processes of chemical bonding, electrical attraction, collision etc. In the social case constitutive social relations are always ­involved, where these emerge through individual processes of social positioning. The account I propose of the way it all comes together can, I think, be reasonably termed a theory of social positioning. 4.1  Social positioning All social positioning happens within an existing or emerging community and so is community specific. The positioning process turns on the application of just two elements or principles. These can be iterated over and again in processes of social reality constitution, giving rise to formations that are increasingly intricate. Simply formulated, they are as follows: 1 Within an existing or emerging totality or system, a novel place, site, slot, space, or opening etc. is created, or an existing one is made (or becomes) available, that is structured in a manner to orient any person or thing allocated to it to serving some system function. 2 Some person or other entity (sometimes a community) is allocated to the place or slot etc., thereby becoming incorporated as a component of the totality or system in a manner oriented to serving a function of the wider totality. The place or site etc. is a social position, and the person or entity allocated to it is the position occupant. Social positioning is a term for both steps or principles combined, each presupposing, and oriented to, the other. Very often the position is given a name − P, say − and each occupant thereupon usually acquires a status of, or relating to, P, to indicate occupancy of the relevant position.

Why social ontology?  13 In many of the chapters that follow, the primary focus is on the ­second of the two noted elements of the positioning process, namely on how some individual or other entity is allocated to a position, taking the existence of the position as (for the time being) given. Where this is so, the concern is with three aspects of the positioning process specifically, namely those whereby objects, persons or other phenomena: 1 become practically placed or arranged or otherwise incorporated (as components of the relevant social totalities or systems); 2 have certain sets of capacities, already possessed, harnessed to serve as one or more system functions; and 3 acquire (usually) specific statuses within the relevant communities (very often, as I say, identical to the name given to the position itself). The satisfaction of each of the foregoing is sufficient for a specific instance of social positioning to be regarded as complete and so for an item to have been constituted (qua positioned item) as a component of a relevant ­totality. Positioning, though, even where complete in this sense, can be less than adequate – as when an individual or other item is allocated to a position for which this individual or item, though possessing some relevant capacities, is not especially competent or appropriate – even if the aim of social positioning typically is to avoid such an outcome. Moreover, even appropriately positioned individuals or things can become damaged, and yet remain in position. With processes of social positioning, then, it is essential to stress that, from a system perspective, success is achieved only where the person or other item allocated to a position, and thereby constituting a component of a wider totality or system, is found to possess capacities that are particularly appropriate to serving the relevant function(s) of that wider totality or system and, if need be, can be continuously harnessed to this end. My primary concern here is with totalities in the form of human communities, namely those totalities that include human beings amongst the components. Artefacts too are social totalities though; and I might note first that when an object is simply physically incorporated as a component (not of a community directly, but) of an a­ rtefact – as with inserting a pane of glass in a space for a window in a wall of house, or a wooden block in a space for a door of the same house – the ‘opening’ created is typically so oriented physically that the mere placement of an appropriate object within it ensures that relevant capacities possessed can be drawn on. This is the simplest case of social positioning, though more on it needs to be said regarding the conditions which allow artefacts and their components to be employed in practice within a community (see below). In the case where, in contrast, ­positioning is concerned with the forming of components of (not artefacts, but) communities directly, things are rather less straightforward, even in achieving a basic functional orientation.

14  Setting the context In all such instances of direct community positioning, in fact, the manner whereby the totality is structured to ensure that positions and their occupants are oriented to serving some system function(s) is through a package of rights and obligations being in some way associated with each position. And the allocation of people and things to various positions requires, in principle, that each outcome (the position and its occupants) be accepted by wider community participants, whether directly or, more ­typically, via representatives by proxy. In the specific case where it is human individuals that come to occupy positions, it is primarily these individuals themselves, qua positioned individuals, who directly access or draw on the rights and obligations associated with the positions. Thus, under current conditions, individuals positioned, say, as employees in a modern UK firm may each acquire an obligation to be in some workplace at certain times, and usually be ­required to engage in various practices. At the same time, the employees will acquire rights to remuneration for the hours spent in the workplace, as well as perhaps various others regarding health and safety measures and insurance. Or where individuals become positioned as university students, they obtain rights to attend lectures and obligations to produce results of study and sit exams, and so forth. All such positional rights and obligations ensure that system functions are served. Where, in contrast, it is artefacts or some other non-human objects that are positioned directly as community components (and so are open to use by various community participants), they do not, of course, themselves acquire rights and obligations. Rather, individual participants in the wider community acquire rights and obligations that bear on the manner in which these artefacts etc., qua positioned items, are (or are not) to be used. Thus, the way a (positioned) machine may be operated in a factory will be determined by the rights and obligations accruing to the various ­(differentially positioned) factory participants. Similarly, the functioning of, say, a car park in the university or a high table in a Cambridge College will be controlled by rights and obligations allocated (differentially) to members of the relevant community. Even in the case where individual things and artefacts are incorporated as components of other artefacts – where, as noted, mere placement may be sufficient for an appropriate physical orientation – the ability of the items qua components and so of their embedding totalities to ‘function’ in practice ultimately rests on (often informal) more general rights and obligations that pervade the wider community and accompany their constitution. Most obviously, it is essential that the components not be removed from the totality in which they are incorporated, or broken or otherwise tampered with. Though often taken for granted where it prevails, a ­situation where all community participants recognise obligations not so to tamper is an achievement. The fact that unauthorised removal or destruction of such items, if or where it occurs, is in very many communities

Why social ontology?  15 treated as a criminal act only reinforces this point. Ultimately, the functioning of social reality everywhere is subject to the influence of rights and obligations that are part and parcel of processes of social positioning. How precisely, though, to return to the topic of relationality in the social realm, does social binding occur according to this framework, so constituting communities as organised systems or totalities? It does so precisely through a generalised acceptance of the range of position rights and obligations just noted. For these are always matched: the rights associated with any particular position, and so its occupant(s), are always internally or constitutively related to obligations attached to certain, usually different, positions and their occupants. These matched rights and obligations thereby constitute a fundamental form of social relation, organising those so related as components of the community so formed. They work as power relations in that the exercising of a position right by one party leads to another, with a corresponding or matched obligation, doing what is requested or expected, even if the latter party feels it is the last thing he or she wants to do. Thus, rights of the employer to stipulate that employees turn up at a workplace by a given time and carry out various tasks are matched to obligations of various employees to be in the workplace by the given time, and to undertake the various tasks in question. Similarly, the right of employees to remuneration for having conformed to these obligations is matched to an obligation of the employer to pay. The right of students to attend lectures is matched to obligations of lecturers to prepare and deliver them; the right that lecturers and students each have to request books in a faculty library is matched to obligations of librarians to fetch them (if stored away somewhere) and sign them out; and so on. Of course, many individuals are identically positioned to each other – say in being constituted as ordinary members of a local community – so that the basic rights and obligations of a position are widely shared. In such cases, specific rights are often matched to obligations attached to the same shared position, so that individual instances of the (shared) rights being exercised are met by obligations being fulfilled by others in that same position. Thus, in the modern UK, the (informal) right of anyone to walk down a street (or ride on a train or bus or sit on a park bench, etc) without harm or inconvenience is matched to the obligations of others similarly positioned not to prevent this happening. Or those standing in a particular queue in order to be served (perhaps a spontaneously emergent queue at a food stall at a music festival) will recognise the act of queuing as an obligation matched to a right to expect all others at the same location to act likewise. Similarly, the right of any individual to leave an artefact such as a car or bicycle in a public place, or that of a member of a household to plant flowers and/or place various artefacts in a front garden, is in each case matched to the obligations of others in the same community not to tamper with the items, or to remove or damage them in part or whole.

16  Setting the context So conceived, then, social reality is seen to depend fundamentally on the generalised acceptance, throughout specific communities, of ­structures of (community-specific and positional) social relations (matched pairs of rights and obligations) underpinning participant practices. As stressed above, the efficacy of any structure of matched rights/ obligations relations to the coordination and functioning of any social ­totality/community depends upon the physical capacities of positioned ­individuals to carry through specific tasks associated with the positions occupied. But just as vital, finally, are the requirements that positioned occupants are not only aware of their obligations but also, and in particular, committed to meeting their positional obligations (whether highly ­specific to an individual or general, explicit or implicit, codified or whatever), and prepared to trust that others will meet their own. Trust and trustworthiness together are, I believe, reasonably thought of as the glue of social communities (see Pratten, 2017). They are generally basic to everything we do as community participants, but are nowhere more fundamental, I suggest, than to our meeting the obligations that derive from positions that we each and all multiply occupy. The relational situation described, based on the enactment of positional rights and obligations and grounded in trust, is clearly essential to the coordination of all social totalities − not just of factories and universities, of course, but also of shops and concert halls, airports/train stations and motorways, criminal gangs and security forces, sports arenas and dance halls etc.; just as the positional powers noted shape all our practices, from those of warfare to complex religious rituals through to playing games or simply having a quiet drink in a café, as for example in the manner depicted in Vincent van Gogh’s Café Terrace at Night, included on the front of the paperback and ebook versions of this book. Let me very briefly conclude this discussion of social positioning by employing this painting as a summary illustration of how, even in such a simple and unremarkable scene as that which Van Gogh captures, the ­various features just described are present and fundamental, and coalesce. At the heart of the scene, a few people – very possibly strangers – are sitting having a drink at a café, and prima facie that is all that is going on. Commonplace activities such as those depicted can be so familiar and taken for granted that the essentiality of the operation of sets of rights and obligations, as well as trust, to everything that is happening is overlooked. Rather fundamentally, however, a number of participants from within the wider community have each come to occupy the position of customer of the café, and thereby have in effect, however implicitly, accepted the obligations and claimed the rights of that position. One such (customer) right is to be able to place an order with another person − one positioned as a waiter12 or waitress (and dressed in white in the painting, very likely because being so dressed is itself a position obligation) − and have the latter take the order and fetch whatever is requested; this right is matched to

Why social ontology?  17 an obligation falling on the individual positioned as a waiter or waitress to meet the request. The latter, of course, will have various additional obligations, including that of keeping the public area of the café, including the tables when vacated, in a reasonable state, which the customers have a right to expect. In addition to, though resulting from, interactions of the noted sort, each customer acquires a debt measured in terms of the community-wide accepted unit of account – this debt being to the owner of the café, who is very likely someone other than the person serving. This debt is itself an (customer) obligation, an obligation to compensate the owner for whatever is consumed; and is matched, of course, to the owner’s right to ­compensation. Notably, though, the customer, because also positioned as a participant of the wider community, has a right regarding the manner in which any debt incurred can be discharged, namely, to be able to pay by using the community’s legal tender (or money), the form of which has been agreed throughout the wider community. Matched to this customer right, the owner has the obligation to accept that the debt has been ­discharged where such a legal tender of a relevant amount has been offered in payment13. Just as the interactions at the café result in the customer being in debt to the café owner, so they result in the owner being indebted to the waiter or waitress. Correspondingly, the latter has the right to be remunerated (by the owner) for meeting the obligations of the position; though he or she too has a related obligation to accept being compensated in the manner of receiving (an appropriate amount) of the legal tender if this is what the owner offers. Grounding the noted interactions and holding everything together are the trust and trustworthiness of all concerned. Very likely, the customers drink in advance of paying; the café staff, on behalf of the owner, trust that the customers can and will pay before they leave (or in the case of regulars perhaps, including Van Gogh, at least in due course). Equally, each waiter or waitress, too, will likely not be paid until the end of the day, week or month, but trusts that payment will be forthcoming eventually. And if payment is by money, all involved are trusting that the issuer of whatever is positioned as money will act in ways (perhaps with state support) to ensure that, as far as is feasible, this money will retain the trust of the community as a whole and (so) its value − that is, that it will remain a liquid store of value. Rights and obligations also interrelate others in the scene, not only the customers, waiter or waitress and owner. For example, in the background beyond the café, a horse and cart are arriving, the driver of which has a right (I presume) to proceed on the road without being obstructed by pedestrians etc. − a right that manifests in this driver trusting that, as the carriage gets closer to them, any individuals positioned as pedestrians will (meet their obligation to) move or stand aside; and so on14.

18  Setting the context Clearly, I could have illustrated and so summarised the noted basic positional/relational features of social reality using almost any scene of human interaction. My use of Van Gogh’s Café Terrace at Night to do so is convenient in that the painting provides a focus (one of widespread and lasting familiarity) wherein it is relatively easy for the more ­fundamental of the relational features in question to be identified and quickly described; and, additionally, is of course opportune in affording me a justification (or is it an excuse?) for using the painting (a favourite of mine) as a cover for the book in the first place. I repeat, though, that processes of social positioning and all they entail are in operation and, at least with reflection, evident everywhere that human interaction occurs, no matter how simple or complex the forms, or how harmonious or conflictual the setting.

5  The structure of the book Processes of social positioning, unsurprisingly then, figure centrally in the chapters that follow. The foregoing is just a brief overview; the conception is elaborated in different ways in each of the included papers. Let me now turn to the specific content of each, considered in turn. In Chapter 2, the sole chapter of Part 2 of the book, a general conception of social ontology is set out. In the first part, I indicate how emergent social phenomena take the form of organised totalities in much the same way that emergent phenomena do in all non-social domains. In the second part of this same chapter, I elaborate the broad nature of the resulting social realm or human s­ ociety at length. A challenge that in part motivates it all is to establish that, and how, social phenomena are as real or objective as the objects studied within the non-social natural sciences such as physics, remaining irreducible to the latter and possessing their own distinct mode of being, whilst nevertheless being fully integrated with, and dependent upon, the rest of the natural world (rather than being dualistically composed of some separate non-naturalistic stuff). This is basically an exercise in philosophical ontology. In contrast, Chapters 3,4, 5 and 6, which comprise Part 3 of the book, are primarily concerned with scientific ontology, with specific manifestations of the conception laid out in Chapter 2. Specifically, I advance theories of the natures of the firm, including the corporation (Chapters 3 and 4) and of money (Chapters 5 and 6). These chapters are, in part, intended to be indicative of how all social existents are manifestations of the conception sketched above and laid out in Chapter 2, although each topic covered has its own peculiarities. I might have elaborated the natures of other social phenomena instead (say, of technology, markets, regions, cities, gender, ethnicity, class and so on), some of which I do address elsewhere (see, e.g., Lawson, 2014 on technology (or Clive Lawson, 2017); or, say, Lawson, 2007a and 2007b on gender). However, I believe that those topics that are here

Why social ontology?  19 covered are rather fundamental to modern capitalist society, whilst each is an interesting enough topic of study. In all cases the issues addressed are anything but settled. If Parts 2 and 3 indicate the principles or manner in which social reality is formed, Part 4, comprised of Chapter 7, is concerned with the nature and dynamics of processes of both emergence and structural reproduction and transformation. Many social totalities, in particular artefacts such as houses and computers, are clearly designed before being constructed and so constitute the results of largely intentional projects. But the same cannot be said of many and perhaps most social totalities (markets, even including stock markets, cities, crowds and so on), including capitalism itself. Chapter 7 is thus concerned with how social totalities emerge in the absence of design and against a general background of process and tendencies to disorder. This focus allows an examination of the nature of relations that hold between the causal powers and other properties of emergent social ­totalities and those of the elements organised as their components. Two prominent, if questionable, theses are examined along the way. The first, often referred to as top-down causation or reconstitutive downward causation, has it that emergent causal powers of a totality can act back synchronically on its own components. The second thesis, often systematised as causal and/or ontological reductionism, holds that emergent properties, including causal powers of the emergent totality, not only always depend on, but depend only on, and indeed are entirely predictable from a knowledge merely of the properties of, the various elements that are eventually organised as components. I give reasons to reject both of these theses along with their associated epistemological stipulations of, respectively, (versions of) methodological holism and methodological individualism. In the final part of the book, comprising Chapter 8, I consider some ­consequences of the conception defended for projects concerned with making the world a better place. I find that the ontological conception set out encourages an approach to social change, including change concerning matters of political economy, that is rather different from the sorts of proposals traditionally advocated. In place of the current debates relating to economic organisation (usually concerning more versus less regulation or stimulus), the warranted attention shifts to ways of transforming the organising structures of society rather more radically, often involving the creation of forms of community with objectives that themselves are rather different from those that currently dominate. A limitation of the way in which the book is structured, perhaps, being comprised of separate essays with some previously published, is that the latter were produced before the others, and I might have phrased a few things differently in the earlier published chapters had I possessed the greater appreciation of various aspects of the framework that came with time15. This applies especially to the elaboration of the notion of social

20  Setting the context positioning. Actually, I should acknowledge that in Chapters 2, 3 and 4, I have in fact made some very slight clarifying adjustments compared to those versions originally published; but very few. Even with these clarifications, the discerning reader may detect a gradual change throughout in that the more recent a specific chapter, the more developed the account of the positioning theory provided. The consistency across chapters, as I take there to be, is, then, most fundamentally of a developmental sort. ­Considered together, however, I believe that the chapters do represent a coherent whole and express my current thinking. An obvious advantage of the book comprising a set of essays, where each is designed to be fairly self-contained, is that the reader can enter the book at more or less any chapter. Let me finish this introductory overview with the following observations. In setting the context of the foregoing discussion, I have focused mostly on the academic discipline of economics interpreted as an autonomous division of social theorising. However, once social ontology is ­explicitly pursued, it is clear − and will be apparent from the essays or chapters that follow − that in actuality there is no reasonable non-­arbitrary basis for distinguishing a separate discipline or science of economics (or sociology or politics or anthropology etc.). Rather, there is legitimate scope for just one social science (see also Lawson, 2003, Chapter 6). For the grounded basis for dividing disciplines, as exhibited by the successful non-social sciences such as physics, chemistry and biology, is the distinctiveness of the materials or processes with which each deals. And it is evident from the analyses that follow that the same sorts of materials, structures and processes – not least those bound up with social ­positioning – are the le­ ivisions concerned with sogitimate focus of all those current academic d cial phenomena. Under capitalism, for example, all social processes have legal aspects, monetary aspects, gendered aspects, political or power aspects and so on. But the latter are just that: different aspects of the same processes, not different types of material. It may be useful, depending on the questions pursued, and so orientation adopted, occasionally to adopt divisions of labour within a unified social science along the lines of current institutional patterns, just as similar subdivisions are found within the successful non-social sciences such as physics. But there are no types of material or structures unique to one division. Thus, the canvassing for a (re)turn to social ontology motivates a similar urging of a (re)turn to a more unified social science. The arguments that are made support a dismantling of the largely artificial institutional barriers currently in place in the academy and a take-up of projects that, from the contemporary perspective of relatively isolated social disciplines, are usually interpreted as inter-, trans- or post-disciplinary study. No doubt such a suggestion will be strongly resisted in various quarters; many have a vested interest in maintaining the status quo. But even if,

Why social ontology?  21 or where, the argument I am making is accepted, the required transformation will likely take time, necessitating, as it does, a wide-scale ­institutional restructuring. Meanwhile, the case for an immediate reclaiming of social ontology of an explicit, systematic and sustained sort remains. Intellectually, the latter reorientation is feasible at any time and, whatever the institutional set-up or motivation, all projects in social theorising stand to benefit where it happens. Certainly, there remains much to be done, and the sooner the process is underway in a significant and sustained manner the better. Hopefully, the current collection can contribute.

Notes † For helpful comments on an earlier draft of this chapter, I am grateful to ­Yannick Slade-Caffarel. 1 Ontology, most simply stated, is the study of being; ‘onto’ (drawing on the Greek ὄντος or ontos being the genitive form of ὄν or on) means ‘being’, and ‘logy’ (drawing on the Greek suffix λογια or logia) expresses ‘the study of’. ­Ontology is investigation into the nature, basic constitution and modes of being of stuff, of all phenomena. To the best of my knowledge at the time of writing this chapter (May 26, 2018), the earliest known use of the term ‘ontologia’ is by Jacob Lorhard in 1606, in the first edition of his Ogdoas Scholastica (the full title of which is ­Ogdoas ­Scholastica, continens Diagraphen Typicam artium: Grammatices (Latinae, G ­ raecae), Logices, Rhetorices, Astronomices, Ethices, Physices, Metaphysices, seu Ontologiae). The earliest known occurrence of the term ‘ontology’ in English is in 1663 by Gideon Harvey in his Archelogia philosophica nova; or, New principles of ­Philosophy. Containing Philosophy in general, Metaphysicks or Ontology, Dynamilogy or a Discourse of Power, Religio Philosophi or Natural Theology, Physicks or ­Natural philosophy. Here Harvey writes: ‘It is [Metaphysics] called also the First ­Philosophy, from its nearest approximation to Philosophy, its most proper ­Denomination is Ontology, or a Discourse of a Being’ (Book II, Chapter One, pp. 17–18). I should note that the above observations constitute revisions to those provided in Lawson, 2015b (a paper actually first drafted in 2004, where I wrote that ‘“ontologia”, appears to have been coined in 1613 by two philosophers writing independently of each other: Jacob Lorhard in his Theatrum Philosophicum and Rudolf Göckel in his Lexicon Philosophicum. Its first occurrence in English seems to be in Bailey’s Dictionary of 1721, where ontology is defined as ‘an account of being in the abstract.’) These revisions are due to the fact that research into the origins of the term is ongoing and, as hitherto unknown early texts are occasionally uncovered, reassessments are made (for a discussion see, e.g., ‘Birth of a New Science: The History of Ontology from Suárez to Kant’, downloaded from www.ontology.co/history.htm on June 6, 2016). 2 The qualifier ‘necessarily’ is included in the definition to rule out phenomena that depend on human beings only contingently, that would or could conceivably exist even had there been no human beings. For example, many and perhaps most species on earth could be destroyed by us, and so their continued existence depends on our not so destroying them. The qualifier excludes all such phenomena being thereby regarded as social. 3 It was Einstein, of course, who repeatedly emphasised the significance of curiosity (‘curiosity has its own reason for existing’, 1955; ‘I have no special talents. I am only passionately curious’, 1952); and linked it to the wonder of gaining

22  Setting the context insight into fundamentals (‘One cannot help but be in awe when contemplating the mysteries of eternity, of life, of the marvellous structure of reality’, 1955). No doubt he was referring to marvellous structure of the non-social realm. But I am not alone in finding that a significant kick can be had from contemplating the structure of the social realm as well. 4 This is all seemingly rather clear where complex objects and/or high-tech tools are involved. Scientists of the non-social realm do clearly draw on insights into the nature of the objects of study for designing and constructing particle accelerators, various forms of telescopes and microscopes and stethoscopes and so on. But even a task such as maintaining a lawn requires a degree of ontological insight − for example, an understanding that grass is of a nature that it can survive being cut to a desired length and a recognition that, in order to cut grass, a lawnmower is, but a hammer, say, is not, an appropriate tool to adopt. 5 Since the recent economic crisis especially, most informed observers do recognise that the discipline of economics is in a sorry state, and, as I say, increasingly many academic economists are prepared to acknowledge this as well. However, fewer, I should add, seem ready to accept openly that the problems of the discipline started a long while before the recent crisis, that an inability to avoid reliance upon unrealistic assumptions and a continuous failure to achieve explanatory insight have been features of academic economics for the last 60 years or more. The preferred/official view runs along the lines of the assessment contained in the following commentary by Paul Krugman: It’s hard to believe now, but not long ago economists were congratulating themselves over the success of their field. Those successes […] were both theoretical and practical, leading to a golden era for the profession […] Last year, everything came apart. (Paul Krugman, New York Times Magazine, ­September 2, 2009) But there was no such golden era prior to the recent crisis. This was openly acknowledged not just by heterodox critics, but − in moments of reflection at least − by many in, or close to, the mainstream too. Thus, before the crisis, Richard Lipsey, the writer of a mainstream textbook noted: … anomalies, particularly those that cut across the sub-disciplines and that can be studied with various technical levels of sophistication, are tolerated on a scale that would be impossible in most natural sciences – and would be regarded as a scandal if they were. (Richard Lipsey 2001, 173) Or as Ariel Rubenstein observed when making a Nobel Memorial Prize speech on behalf of John Nash: ‘Economic theory lacks a consensus as to its purpose and interpretation. Again and again, we find ourselves asking the question “where does it lead?”’ (Ariel Rubinstein, 1995, p. 12). Consider, too, views of Nobel Memorial Prize winners in economics themselves (Walley Leontief, Milton Friedman and Ronald Coase), all commenting well before the crisis: Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions…..Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data without being able to advance, in any perceptible way, a systematic understanding of the structure and the operations of a real economic system. (Leontief, 1982, p. 104)

Why social ontology?  23 And: ‘economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems’ (Friedman, 1999, p. 137). Or: ‘Existing economics is a theoretical system which floats in the air and which bears little relation to what happens in the real world’ (Coase, 1999, p. 2) A prominent econometrician, Edward Leamer, recognised that: ‘The opinion that econometric theory is largely irrelevant is held by an embarrassingly large share of the economics profession’ (Leamer 1978, vi). And Mark Blaug summed the situation up in concluding that: Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. (Blaug, 1997, p. 3) All the noted observations were made well before the recent crisis. 6 Profits are typically determined as total revenue (quantity produced times its price) minus total costs. 7 Consider, for example, the phenomena of money and value. The explicit and systematic study of their nature was undertaken by Adam Smith (1723-1790), David Ricardo (1772-1823) and Karl Marx (1818-1883). Carl Menger (1840-1921) too wrote at length on the nature of money (Menger, 1892), as of course did John Maynard Keynes (1883-1946), amongst many others. Keynes (1930 [1971]), in fact, wrote a significant treatise on the topic. Earlier Keynes (1921 [1973]) had produced a similarly lengthy treatise on the ­nature of probability and the sorts of conditions to which probability reasoning could legitimately be applied, a discourse of an ontological nature that was later to underpin his critique of methods of econometrics (1973, for example pp. 285–6). Elsewhere Thorstein Veblen (1857-1929) argued repeatedly that the material of social reality everywhere conformed to (Darwinian) processes of cumulative causation, processes that rarely if ever manifested regularities at the level of events; and he developed conceptions of the nature of institutions and ­technology in conformity with this ontology (see Lawson, 2013, 2015c). Alfred Marshall (1842-1924) too recognised this sort of social ontology, albeit that in the process he failed to fully grasp the implications that followed at the level of method (a failing that, as noted in the main text, led to Veblen coining the term ‘neoclassical’ precisely to capture the ontological inconsistency involved − see Lawson, 2013, Pratten, 1998). Friedrich von Hayek (1899-1992), somewhat later, concerned himself with the nature of social order (see Lewis, 2015). And Marx (1818-1883) is best ­conceived as elaborating the nature of capitalism as a whole (his book Capital [1974] starts with considering the nature of the commodity, then the nature of value, of money, labour and labour power, capital and ultimately of the totality that is capitalism). And so on. This, too, is a situation I have again detailed elsewhere (e.g., 2018), and so will not expand further upon here. 8 Mostly it has not been a feature at all. But in recent years, as a result of ­economics students in Cambridge petitioning for such a course to be part of the economics curriculum, a trial option has been recently introduced. 9 See Pratten, 2015, or the recent special issue of the Cambridge Journal of ­Economics on ‘Cambridge Social Ontology: Clarification, Development and Deployment’, (2017, Volume 41, Issue 5, pp. 1265–1537). 10 This latter approach or orientation will no doubt seem overly indulgent to some, and a distraction from getting on with the real work of science, which

24  Setting the context

11

12

13 14

is always practically motivated and concerned. Certainly, it stands in stark contrast to most practices of modern economics. However, there are more than a few (in all fields) who hold that the noted sort of orientation is not only good for flourishing, but likely fundamental to science and knowledge advance more widely anyway. This is a view shared, for example, by physicists such as Einstein (‘Science will stagnate if it is made to serve practical goals’, 1960, p. 402), and economists such as Veblen (‘Wisdom and proficiency of the pragmatic sort does not contribute to the advance of a knowledge of fact’, 1906, p. 19), amongst numerous others. Of course, I do not suggest that participants in these discussions are, or could ever be, other than situated and interested; all of us are historical and cultural products. Prior orientations and determinations certainly bear upon the issues about which we are curious, the questions we are interested to pursue, the contrasts and contradictions that surprise and move us, the puzzles we seek to unravel, as well as the way we respond to any insights gained. That is quite different, however, from pragmatically looking always to support a prior political orientation, or to generate a specific preconceived sort of result, or to use predetermined methods etc. Rather, it is merely to recognise that, no matter how disinterested the orientation with which we approach a topic, we must always seek to advance understanding starting from who we are/have become, what we have been through and where we happen to be, drawing on existing understandings and motivated by accumulated concerns, beliefs and interests etc. The disinterested spirit relates to the manner in which analysis is approached, not to overall relations to the world. The person, a central figure, has long hair and there are 12 customers − ­leading some to suppose that the painting not only captures a scene from everyday life that was very familiar to van Gogh, but additionally alludes to Da Vinci’s The Last Supper. This does not preclude other arrangements being accepted. It is not impossible that a regular such as Van Gogh may, through negotiation, have arrived at an agreement whereby some debt could be discharged by giving a painting. If even a scene as simple as this is found to be highly structured by social relations, so the scene described must be recognised as one not of fixity, but of process, though a snapshot or painting cannot easily capture this. I refer not to the fact that there is movement of various characters within the painting, or to a recognition that as the scene is repeated each evening, the individuals ­positioned as customers, pedestrians and even waiter or waitress can be different. Rather, I mean that the positions and structures themselves are never merely fixed, but to persist need continually to be reproduced (and are continually transformed to an extent by all that goes on). The continual reproduction of the basic structures requires (amongst other things) that day after day, week after week, a sufficient number of individuals keep slotting into the position of customer (and that other forces such as deaths, earthquakes, town restructuring, wars etc. do not arise and undermine it all). Although each ­customer, by way of her or his custom, contributes to reproducing the café, this typically is not the reason a drink is taken; nor is it something any customer will typically be aware of achieving. But this is the nature of the process anyway. The importance of customers to reproduction of entities such as cafés is easily recognised at the current time, when the ‘high street’ in many towns and cities of numerous countries is witnessing mass closures of shops due to ‘customers’ switching to ‘online’ shopping. Of course, the particular café in question has revealed very significant longevity. It existed when painted in 1888 by Van Gogh, clearly, and is still going strong. This, of course, is very likely in significant part just because Van Gogh painted it, though the café’s longevity was presumably not a part of his

Why social ontology?  25 intentions in making the painting. So famous is it, however, that many admirers travel to Arles, where the café is to be found, just to be amongst the café’s customers (and it has appeared in numerous films). For this reason, much of its decor is kept the same (or rather in 1990 and 1991 it was refurbished in such a way as to return it to its form as expressed in the painting), though much of the scene will also be very different. The clothes will have changed, the means of discharging debts, the technologies involved and artefacts on display, the particular individuals, the modes of transport of passers-by (largely bicycles today) will have changed etc. And yet there is a sense in which it can be ­meaningfully be said that today’s visitors do sit and drink at the very café which Van Gogh painted (and, of course, at which he too was a frequent customer). In short, in this particular case, through all the changes that have occurred, the café has been (continually) reproduced (as well as partially transformed). 15 Especially helped along by the critiques provided by others. See, for e­ xample, the interchanges on these matters in a symposium in the Journal of Social ­Behaviour, 2016, 46 (64), and the critical contributions in the special issue of the Cambridge Journal of Economics of August 2017 on Cambridge Social Ontology, or provided by Ingham, 2018.

References Archer, Margaret S. (ed.) (2013) Social Morphogenesis, New York: Springer. Archer, Margaret S. (ed.) (2014) Late Modernity: Trajectories towards Morphogenic ­Society, New York: Springer. Archer, Margaret S. (ed.) (2015) General Mechanisms Transforming the Social Order, New York: Springer. Archer, Margaret S. (ed.) (2016) Morphogenesis and the Crisis of Normativity, New York: Springer. Archer, Margaret S. (ed.) (2017) Morphogenesis and Human Flourishing, New York: Springer. Blaug, Mark (1997) Ugly Currents in Modern Economics, Options Politiques. ­(Septembre), 3–8. Coase, Ronald H (1937) ‘The nature of the firm’, Economica, vol. 4, no. 16, 386–405. Coase, Ronald (1999) Interview with Ronald Coase, Newsletter of the International Society for New Institutional Economics, vol. 2, no. 1 (Spring). Einstein, Albert (1935) The World As I See It, The Thinkers Library, No. 79, London: Watts and Co. Einstein, Albert (1952) Letter to Carl Seelig, (11 March), Einstein Archives, 39–013. Einstein, Albert (1955) ‘Statement to William Miller’, Life Magazine, 2 May. Einstein, Albert, Otto Nathan and Heinz Norden (1960), Einstein on Peace, London: Simon and Schuster. Friedman, Milton (1999) Conversation with Milton Friedman in Snowdon B. and Vane H. (eds.). Conversations with Leading Economists: interpreting modern ­macroeconomics, 124–44, Cheltenham: Edward Elgar. Hahn, Frank Horace (1982) Money and Inflation, Oxford: Blackwell. Harvey, Gideon (1663) Archelogia Philosophica Nova; or, New Principles of ­Philosophy. Containing Philosophy in General, Metaphysicks or Ontology, Dynamilogy or a ­Discourse of Power, Religio Philosophi or Natural Theology, Physicks or Natural ­Philosophy, London: Thomson. Ingham, Geoffrey (2018) ‘A critique of Lawson’s “Social positioning and the nature of money”’, Cambridge Journal of Economics, 42, pp. 837–850.

26  Setting the context Keynes, John Maynard (1921 [1973]) A Treatise on Probability, The Collected Writings of John Maynard Keynes, Vol. VIII, published for The Royal Economic Society, London: Macmillan: St Martin’s Press. Keynes, John Maynard (1930 [1971]) A Treatise on Money: The Pure Theory of Money, The Collected Writings of John Maynard Keynes, Vol. V, published for The Royal Economic Society, London: Macmillan: St Martin’s Press. Keynes, John Maynard (1937 [1973]) The General Theory and After: Part II Defence and Development, The Collected Writings of John Maynard Keynes, Vol. XIV, St Andrews, Royal Economic Society. Krugman, Paul, (2009) New York Times Magazine, Sept 2. Lawson, Clive (2017) Technology and Isolation, Cambridge: Cambridge University Press. Lawson, Tony (1997) Economics and Reality, London and New York: Routledge. Lawson, Tony (2003) Reorienting Economics, London and New York: Routledge. Lawson, Tony (2007a) ‘Gender and Social Change’ in Brown, J. (ed.) The Future of Gender, Cambridge, Cambridge University Press, pp. 136–62. Lawson, Tony (2007b) ‘Methodological Issues in the Study of Gender’, Journal of International Economic Studies, No 21, 1–16. Lawson, Tony (2013) ‘What is this “school” called neoclassical economics?’ ­Cambridge Journal of Economics 37(5), 947–983. Reprinted in Lawson, 2015a, pp. 56–104; also reprinted in Morgan, J. (ed.) 2015, pp. 30–80. Lawson, Tony (2014) ‘A Speeding up of the Rate of Social Change? Power, ­Technology, Resistance, Globalisation and the Good Society’, in Archer, Margaret S. (ed.), Late Modernity: Where are we Going? New York: Springer, pp. 21–47. Lawson, Tony (2015a) The Nature and State of Modern Economics, London and New York: Routledge. Lawson, Tony (2015b) A Conception of Social Ontology, in Pratten, S. (ed.) (2015), pp. 19–52. Lawson, Tony (2015c) ‘Critical Ethical Naturalism: An Orientation to Ethics’, in Pratten, S. (ed.) (2015) pp. 359–387. Lawson, Tony (2015d), ‘Central Fallacies of Modern Economics’, Schmollers ­Jahrbuch: Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, vol. 135(2), pp. 189–208. Lawson, Tony (2016a) ‘Comparing conceptions of social ontology: emergent social entities and/or institutional facts’, Journal for the Theory of Social Behaviour, vol. 46, no. 4, 359–99. Lawson, Tony (2016b) ‘Ontology and social relations: reply to Doug Porpora and Colin Wight’, Journal for the Theory of Social Behaviour, vol. 46, no. 4, 438–49. Lawson, Tony (2017) ‘What is wrong with modern economics, and why does it stay wrong?’ Journal of Australian Political Economy, vol. 80, pp. 26–42. Lawson, Tony (2018) ‘Debt as Money’, Cambridge Journal of Economics, 42(4), pp. 1165–81. Leamer, Edward E. (1978) Specification Searches: Ad hoc inferences with non-­ experimental data, New York: John Wiley and Sons. Leontief, Wassily (1982) Letter in Science, 217, 104–7. Lewis, Paul (2015) ‘Notions of Order and Process in Hayek: the significance of emergence’, Cambridge Journal of Economics, 39, 1167–1190. Lipsey, Richard G. (2001) ‘Successes and failures in the transformation of economics’, Journal Of Economic Methodology, Vol. 8, No. 2 (June), 169–202.

Why social ontology?  27 Lorhard, Jacob (1606) Ogdoas Scholastica, Continens Diagraphen Typicam Artium: Grammatices (Latinae, Graecae), Logices, Rhetorices, Astronomices, Ethices, Physices, Metaphysices, Seu Ontologiae, St. Gallen. Marx, Karl (1974) Capital, vol. I, A Critical Analysis of Capitalist Production, transl. by Moore S. and Aveling, E., ed. by Engels, F., London, Lawrence and Wishart. McCloskey, Deirdre (1994), Knowledge and Persuasion in Economics, Cambridge: Cambridge University Press. Menger, Carl (1892) ‘On the origins of money’, Economic Journal, vol. 2, no. 6, 239–55. Morgan, Jamie (2015) What is Neoclassical Economics? Debating the origins, meaning and significance, London and New York: Routledge. Porpora, Doug (2016) ‘Response to Tony Lawson: sociology versus economics and philosophy’, Journal for the Theory of Social Behaviour, vol. 46, no. 4, 420–5. Pratten, Stephen (1998) ‘Marshall on tendencies, equilibrium, and the statical method’, History of Political Economy, vol. 30, no. 1, 122–63. Pratten, Stephen (ed.) (2015) Social Ontology and Modern Economics, London and New York: Routledge. Pratten, Stephen (2017) ‘Trust and the social positioning process’, Cambridge ­Journal of Economics, Volume 41, Issue 5, 1 August 2017, pp. 1419–1436. Rubinstein, Ariel (1995) ‘John Nash: the master of economic modelling’, Scandinavian Journal of Economics 97(1), 9–13. Searle, John (2016) ‘The limits of Emergence: Reply to Tony Lawson’, Journal for the Theory of Social Behaviour, 46, 4. Searle John, (2017) ‘Money: Ontology and Deception’, Cambridge Journal of ­Economics, Special Issue: Cambridge Social Ontology: Clarification, Development and ­Deployment, vol. 41, pp. 1453–1470. Veblen, Thorstein (1900) ‘The Preconceptions of Economic Science III’, Quarterly Journal of Economics, vol. 14, no. 2, 240–269. Veblen, Thorstein (1906) ‘The place of science in modern civilization’, The ­American Journal of Sociology, Vol. XI, No. 5, pp. 585–609. Reprinted in Thorstein Veblen (1919) The Place of Science in Modern Civilization and Other Essays, New York: ­Viking Press, pp. 1–31 (page references to the latter). Wight, Colin (2016) ‘Oversocializing the social world(s)?’, Journal for the Theory of Social Behaviour, vol. 46, no. 4, 413–19.

Part 2

A general conception

2 Ontology and the study of social reality Emergence, organisation, community, power, social relations, corporations, artefacts and money*† 1 Introduction Research activity or reports presented as contributions to social science are often met with suspicion, if not outright derision, as inevitably not contributing to or constituting real or proper science1. Underpinning this ­reception is a widespread apprehension that, unlike the sciences of ‘nature’, such a would-be or proclaimed (social) science does not have a proper ‘object’ of study; one with its own properties, its own dynamic, its own mode of being, requiring (and permitting) specialist study. If ­political commentators are sometimes interpreted as announcing that there is no such thing as society2, others − not least philosophers of ­science − frequently charge, and not always without reason, that social theorists mostly invent their subject matter, creating theoretical entities that are not to be treated as realistic in any way, being without referents in the real world3. What would it take to demonstrate that such negative receptions are unwarranted, that a meaningful social science is after all entirely ­feasible? A sufficient response, I take it, would be to identify causal factors, properties or/and entities that can reasonably be categorised as social, which possess their own distinct mode of being, yet are as real or ­objective4 as the objects studied within the traditional ‘natural’, that is the non-social, sciences, and in a relevant sense irreducible to the latter. Primary candidates for features to be classified as social so conceived, I suggest, are those (if there are any) that arise out of, and depend necessarily upon, human interactions (clearly constituting a unique mode of being); those, if any, that could not exist in the absence of human beings and their doings. My contention is not only that there are indeed features or phenomena reasonably so identified as social − and collectively constituting the social domain or social reality − but also that such features are just as real or objective as those of any other domain, bearing their own irreducible causal powers, justifying and indeed warranting their separate, specialised and

32  A general conception relatively autonomous form of scientific study5. In other words, I contend that, whatever the achievements of ‘social science’ to date, the material conditions for a social science that is scientific in the sense of existing ‘natural’ science are entirely present. An apparent obstacle to my grounding this contention is the widely accepted doctrine of ontological naturalism, the thesis that everything can be explained in terms of natural causes. This is a non-dualist orientation that entails that even features such as life, choice and intentionality are integrated with the (rest of the) natural world and not composed of some separate (non-naturalistic) stuff. From the perspective of this doctrine, it may seem unlikely that many of the usual categories of social theory can be accommodated − not least those such as social position, social power and social relation that figure centrally in my own conception of social reality. Instead, from the perspective of ontological naturalism, it may well be held that such categories at best serve as placeholders for features that can be more properly described in terms of the traditional objects of some non-social science. I too accept the doctrine of ontological naturalism. My objective here is not to resist it, but to suggest that this doctrine is not after all contravened by the conception of social reality I have previously defended, despite the latter including the noted causal features − features that are held both to have a distinct mode of being and to be (in relevant senses to be defined below) irreducible to phenomena studied in the traditional ‘natural’ sciences. Thus, I shall be defending an account whereby social reality is seen to be distinct from, and yet dependent upon, non-social material. 1.1  A philosophical contrast The systematic consideration of issues such as these falls under the head of social ontology, the study of the nature of social being. This is a branch of philosophy that, as an explicit pursuit, I believe to be overly neglected in both philosophy and science (see, e.g., Lawson, 1994, 1997, 2003; Fullbrook, 2009). This neglect is not total, however. One contributor who in recent times has written explicitly on social ontology and in a sustained and systematic way is the philosopher John Searle (e.g., 1995, 1999, 2010), and here I advance my arguments by way of initially making some comparisons between Searle’s position and my own. For although in our respective contributions we focus largely on the same set of issues and generate results and frameworks that, in very many ways, are extremely similar, in certain fundamental respects relevant to my concerns here our positions also appear very different, at least at first sight. An immediate relevant difference concerns the manner in which Searle and I have gone about our theorising and in particular our contrasting

Ontology and the study of social reality  33 starting points. The latter especially reflect the different priorities given to the constraint of ontological naturalism. My own approach is multifaceted, but a central component has been to proceed by first identifying generalised features of experience concerning (aspects of) human interactions and then questioning whether any of their preconditions (i.e., the conditions that must be in place for these experienced interactions and aspects to be possible) include those that are additionally irreducible outcomes of human interactions (and if so, to explore their natures etc.). If such human-interaction-dependent features are so identified, then, being causally efficacious conditions of (further) human interaction, they can be accepted as real; and being products of human interaction, they are seen additionally to be social. The conception of social ontology I defend (and elaborate upon in due course below) is to a significant extent the result of such endeavour (see, e.g., Lawson, 2003, especially Chapter 2). If my approach might be appropriately described as working backwards (from actual social interactions to their conditions of possibility), Searle’s alternative is perhaps best described as working forwards – by building on the results of non-social sciences regarded as the most sound. Specifically, according to Searle, there are ‘two features of our conception of reality that are not up for grabs’ and within which any theory of society must fit: ‘the atomic theory of matter and the evolutionary theory of biology’ (Searle, 1995, p. 6)6. Searle’s mode of theorising then is not only consistent with, but also guided by, the constraint of ontological naturalism. By explicit intent, Searle is concerned to understand how anything that might be termed ‘human society’ has arisen out of material that is traditionally studied by the non-social sciences. Whether or not Searle holds to there being something distinct about social reality, it is clear that dependence and continuity are stressed throughout. If it is the case that by starting from human interactions and working backwards in the manner briefly sketched, I have given insufficient ­ explicit attention to ontological naturalism in previous contributions, the latter, as I say, is nevertheless a thesis I broadly accept. My previous neglect of a naturalistic assessment of my position is thus, to repeat, something I seek explicitly to rectify here. 1.2 Emergence In naturalistic discussions of how novel elements or properties come about in any domain of reality, a critical analytical category is that of emergence. It is a term used to express the appearance of novelty, or something previously absent or unprecedented. It figures in Searle’s writings as well as in my own. And whilst there are numerous competing accounts of emergence to be found in the literature, it is clear that both Searle and I seek non-dualist conceptions (i.e., that do not portray social

34  A general conception or any emergent reality as consisting in non-naturalistic material, totally separated from other material). Even so, it is precisely over issues covered by the category of emergence that, prima facie at least, Searle and I seemingly diverge the most in elaborating our basic frameworks. Let me briefly indicate how. Typically, emergence is conceived in terms of entities and their properties found at a particular level of reality, but composed out of entities (components) existing at a lower level of reality. Specifically, an entity and its properties are said to be emergent from some lower (or different) level where they arise through the relational organising of lower-level elements, and the emergent properties in question are not possessed by any of the (lower-level) elements that get to be organised. The foregoing is sufficient to give a general (non-dualist) conception of emergence. Searle and I – and seemingly most others who advance emergentist positions – accept this conception as far as it goes, with Searle referring to it as emergence1 (Searle, 1992, p. 111). Emergence so understood, however, is not an explanatory term, but rather one that marks the spots where (diachronic) explanatory work remains to be undertaken to reveal how the higher-level entities do (or have) emerge(d)7. In particular, the above conception of emergence implies nothing about the relationship between higher-level emergent causal powers and the powers of the lower-level components. Whether or not it is built into the idea of emergence per se, I additionally hold to the notion that any higher-level emergent entity and its properties are, if conditioned by and dependent upon lower-level elements or components, nevertheless synchronically both causally and ontologically (and not merely taxonomically and epistemologically) irreducible to them. At first sight at least, Searle, as we will see, appears to reject this latter thesis of (synchronic) causal and ontological irreducibility. If this is indeed a difference between us, then it is a significant one. For it is the composite or stronger view additionally positing (synchronic) causal and ontological irreducibility (a conception which Searle terms emergence2) that, when applied to social phenomena specifically, grounds most securely my assessment that a relatively autonomous social science is entirely feasible. In fact, as far as I can discern, most philosophers prepared at all to defend non-dualist accounts of emergence appear to disallow causal and ontological irreducibility. Such stances are understandable. For, as already noted, any notion that, starting from the atomic theory of matter, we are somehow able to end up with irreducible items such as social relations with their own equally irreducible causal powers can easily seem altogether far too mysterious. It is thus easy to suppose that, by claiming space for such supposedly irreducible social causes in my own framework, I have after all exempted myself from the constraint of producing an account that is coherent with ontological naturalism.

Ontology and the study of social reality  35 As I say, I do propose to provide an explicitly naturalistic account of my position here. But in so doing, I shall maintain the stronger view of emergence that posits causal and ontological irreducibility nevertheless, and take the opportunity to indicate that there is nothing especially mysterious involved in accepting it. I shall argue indeed that it is quite consistent with our best accounts of the physical sciences, at least as I understand them8. To achieve these ends, however, does require my running through aspects of my analysis of emergence in greater detail than I have hitherto. This, and specifically a defence of causal and ontological irreducibility in the context of emergence, is the focus of the following section. Whether Searle and I really do disagree significantly on the relevant issues here (a matter that I shall explore), it is certainly the case that Searle’s seemingly opposed formulations provide a useful foil or contrast at this point, enabling me more easily to draw out and explore the issues I regard as most significant for the questions being addressed. In this next section the discussion focuses on emergent reality in general without specific reference to any putative social domain. In the section which follows, I turn to argue that the version of emergence that I am defending equally underpins the development of phenomena that can reasonably be defended as social. In this part of the discussion, the challenge I take up is to run through my previously presented account of specific social emergents (see, e.g., Lawson, 1997, 2003) − not least my account of social relations, powers and positions − to demonstrate their coherence with the doctrine of ontological naturalism. In a final section, I briefly indicate that the conception to that point set forth, which focuses mainly on human beings in social relations, also extends, in important respects, to the analysis of inanimate social objects including artefacts and, or such as, (aspects at least of) money.

2  Emergence, reduction and organisation At the heart of the competing conceptions of emergence under consideration here, then, are apparent differences regarding possibilities of certain forms of reduction, namely causal and ontological. Actually, in wider discussions regarding the nature of emergence, the focus is often on causal reduction alone. Nevertheless, both forms are pertinent here, and clearly the meanings of both warrant elaboration. Searle (1992) himself provides explicit formulations of each. Of causal reduction, Searle writes: This is a relation between any two types of things that can have causal powers, where the existence and a fortiori the causal powers of the reduced entity are shown to be entirely explainable in terms of the causal powers of the reducing phenomena. (Searle, 1992, p. 114)

36  A general conception And Searle’s conception of ontological reduction is a situation in which ‘objects of certain types can be shown to consist in nothing other than objects of different types’ (Searle, 1992, p. 112). If the account of emergence that I am defending is such that the possibilities both of causal and of ontological reduction are, in the senses just noted, foreclosed, for Searle, not only is this seemingly not the case, but causal reduction follows automatically from emergence1 and such a reduction usually leads itself to an ontological reduction. Thus, after reviewing numerous examples, Searle summarises his findings as follows: The general principle in such cases appears to be this: Once a property is seen to be emergent1, we automatically get a causal reduction, and that leads to an ontological reduction, by redefinition if necessary. The general trend in ontological reductions that have a scientific basis is toward greater generality, objectivity, and redefinition in terms of underlying causation. So far so good…. (ibid, p. 116) Searle goes on to argue, however, that although consciousness is emergent1 and so, by his reasoning, causally reducible, it is also somewhat exceptional in being at the same time ontologically irreducible. My seemingly somewhat more radical contention is that whilst consciousness is indeed ontologically irreducible, it is, like everything else regarded by Searle as emergent1, also causally irreducible. But then my assessment is that every ‘higher-level’ phenomenon is both ontologically and causally irreducible. Moreover, if prima facie paradoxically, I also want to suggest that in maintaining this contention, my position is ultimately not so different from that of Searle. That is, despite explicit statements such as those noted above, I am not convinced that Searle is ultimately appropriately represented as supporting causal and ontological reductionism at all. 2.1  Emergence and causal and ontological irreducibility So how do I propose to defend a version of emergence that resists the theses of causal and ontological reductions in particular? Furthermore, how do I propose to do so in a manner in which the resulting conception remains consistent with (ontological) naturalism and thereby (or otherwise) avoids the charge of mysteriousness that tends to accompany claims of strong emergence? Further still, how do I propose to sustain a non-causally and non-ontologically reductionist account of emergence in a manner that implicates Searle as holding to a similar thesis? Before setting out the argument, it may be useful to emphasise the distinction between synchronic (at a point in time) and diachronic (over time) forms of reduction and explanation. I doubt that many commentators who

Ontology and the study of social reality  37 accept ontological naturalism deny that, where higher-level features have arisen, there will have been a historical process whereby these features came about. That is, there is always a historical explanation of higher-level phenomena to be uncovered and so in that sense there is a possibility of a historical or diachronic reduction. This is not in contention here. Rather, the debates over stronger versus weaker forms of emergence are concerned with the possibility of synchronic (not diachronic) reducibility, with whether higher-level elements or features or powers can be reduced to lower-level ones alone, and at a given point in time. This is the way the issue is framed by Searle above, for example, when he speaks of causal reducibility in terms in which ‘the existence and a fortiori the causal powers of the reduced entity are shown to be entirely explainable in terms of the causal powers of the reducing phenomena’ (emphasis added), and of ontological reducibility in terms whereby ‘objects of certain types can be shown to consist in nothing other than objects of different types’ (emphasis added). It is the possibility of such synchronic causal and ontological reductions that I am disputing and indeed rejecting. On what basis do I do so? In quoting Searle in the last paragraph, I have added italics to emphasise the expressions ‘entirely explainable’ and ‘nothing other than’. I emphasise these expressions just because it is these over which, at first sight at least, we seemingly disagree and which are essential to a position that qualifies as reductionist here. I do not deny that the causal powers of lower-level phenomena are contributory to higher-level ones, or that these lower-level elements are components of higher-level entities (albeit perhaps after modification, as, say, when the electrons of atoms are rearranged if two combine to form a molecule). But there is always more going on. An emergent property or power is the property or power of something (that possesses it) − that is, it is a property of an object, entity or element, where the latter is usually formed by way of a combination of pre-existing (lower-level) elements or entities. On this, there is seemingly widespread agreement. However, the components of emergent entities (unlike members of aggregate collections) do what they do qua components only because of the manner in which they are organised (arranged, structured or related) as parts of the whole. Quick examples are the properties of liquidity of any material, the affordances of a home, the movement of a car, the validity or conclusion of a deductive argument. It is precisely when, and due to the manner in which, the lower-level elements are (perhaps with or through modification) so organised that emergent entities with emergent powers are feasible, and component parts make the contribution they do to the emergent result. I do not think this is especially denied in the philosophical literature. However, in discussions of emergence, two sets of phenomena tend, between them, to receive the dominant if not the sole emphasis. The first

38  A general conception set consists of (emergent) entities or ‘elements’ with powers of efficient causality conventionally described as lying at the higher level. The second consists of entities or ‘elements’ with powers of efficient causality conventionally located at the lower level, and which (perhaps through modification) come to comprise components of emergent higher-level entities. I have already noted that missing from the analysis is any account of the manner in which the lower-level phenomena become organised (arranged, related or structured) in the process through which the higher-order entities emerge. This is an absence that is significantly masked by the repeated use of the noted categories. A result is that this relational organisation, which entails an arrangement of lower-level elements, is very often left largely under-elaborated or little discussed, and treated implicitly as part of the lower level and mostly as a given. My contention is simply that the organisation of the lower-level phenomena is itself always a novel phenomenon, emerging along with any higher-level totality. In other words, the relational organisation itself must be regarded as a higher (not lower) level feature, and indeed a causal property of the emergent totality or entity. Think of the components of a building, comprising, say, bricks, mortar, blocks of wood, panes of glass and so forth. Imagine a particular building dismantled and its bricks and other components then rearranged differently, and perhaps randomly or blindly. It is easy to imagine configurations whereby the house, along with house properties of affording shelter etc., would no longer emerge. The arrangement, the configuration or organising relations of the components, makes a difference. It is a form of causation; it is formal causation. It emerges along with any emergent totality and indeed is a property of the latter. And it is easy to see that the arrangement of lower-level components is a causal feature of higher-level entities generally (for an elaboration of this latter assessment, see Lawson, 2013 [Chapter 7, below]). It is a recognition that organising structure is an emergent higher-level phenomenon, we will see, that grounds my claim that emergent phenomena are in the relevant sense ontologically and causally irreducible. I should perhaps quickly note here that the term ‘organisation’ has two inflections. In processes of emergence, the lower-level elements become organised as components of the emergent entity or whole, and we can refer to the organisation of the components. But the category of organisation is also regularly employed to refer to the totality, including the lower-level elements that have become (re)organised9. Hopefully, it will be clear from context which meaning is intended here. When the term refers to the emergent entity or totality − that is, when the organisation is a whole or a system – it includes not just the lower-level elements that (perhaps with or through modification) have become components, along with their context, but also an organising structure comprising emergent relations between components (as well as, of course, others that bind these components to features in their environment).

Ontology and the study of social reality  39 2.2  The impossibility of synchronic reducibility Once (or where) it is recognised that the emergent phenomenon is a system in which components are constrained to act within organising structures, the argument against ontological reducibility is straightforward. For if, as I am suggesting, the emergent entity or system includes ­organising relations that are external to the lower-level elements, then the totality is necessarily ontologically irreducible to the lower-level components alone, components which in fact become organised (and, to repeat, thereby are very often indeed significantly modified10 ) in the process of emergence. The argument against causal reducibility is no less straightforward. For it is clear enough that any emergent higher-order forms of efficient causation are precisely powers of the emergent system, whole or organisation, and depend as much on the organising structures and relations as on the lower-level components that the latter organise. I am not sure that, put like this, my claim is especially contentious. Far too often, though, the organising structure, despite involving relations that are externally related to lower-level components, is left implicit and taken for granted in the relevant discussions11. I am suggesting that this neglect of attention to organising structure is unhelpful at best, and serves almost unwittingly to deflect challenges to the dominant presumption that the causal powers of emergent phenomena are somehow always reducible to the causal powers of lower-level phenomena alone. Once recognition of organising structure as a higher-level phenomenon is made fully explicit, I think it follows straightforwardly that synchronic reductions are not feasible. 2.3 Searle Is this really a very different position from that of Searle? I am not so sure. Certainly, there appear at first sight to be very clear differences. For as we have seen, Searle explicitly embraces the doctrine of causal reducibility, according to which causal powers of any higher-level phenomenon are said to be ‘entirely explainable’ in terms of the causal powers of lower-level components, as well as the doctrine of ontological reducibility, according to which ‘objects of certain types can be shown to consist in nothing other than objects of different types’. We also find, however, that a notion of organisation or system does usually figure as a presupposition in Searle’s more detailed formulations, ­albeit as one that is usually left largely unexamined. Thus, when in his 1992 book (which most discusses these issues) Searle introduces the notion of ‘emergence’, he writes explicitly in terms of ‘causally emergent system features’: But some other system features cannot be figured out just from the composition of the elements and environmental relations; they have

40  A general conception to be explained in terms of the causal interactions amongst the elements. Let’s call these “causally emergent system features.” Solidity, liquidity, and transparency are examples of causally emergent system features. (Searle, 1992, p. 111) Although in using the category system here Searle does not write explicitly in terms of the relational structuring of components, when elaborating a little on the example of solidity, he adds: Thus, for example, some objects are solid and this has causal consequences: solid objects are impenetrable by other objects, they are resistant to pressure, etc. But these causal powers can be causally explained by the causal powers of vibratory movements of molecules in lattice structures. (ibid, p. 114) We can see, then, that this statement does not amount to reducing solidity to the causal powers of molecules alone, for emergent organisation in the form of lattice structures is clearly essential. Whatever Searle’s formal claims about causal reductions, it seems clear enough that any emergent causality also depends upon the organisation of lower-level phenomena, where the former is irreducible to the latter. I am suggesting, then, that when Searle, on accepting causal reduction, insists that any higher-level causal powers are ‘entirely explainable in terms of the causal powers of the reducing phenomena’, this may yet be correct, but only to the extent that we add the qualification: ‘when these latter phenomena, perhaps through a process of modification, are organised via structures or relations that are themselves an emergent part of the higher-level emergent entity.’ I am suggesting, too, that Searle appears to be accepting the latter qualification at least up until (though perhaps without also accepting) the point that the organising structures are interpreted as an emergent part of the higher-level emergent entity. In other words, the real difference between us, if there is one, is seemingly not over the question of whether organisation plays an explanatory role (in addition to the explanatory contribution of the components), but over the sort of recognition or emphasis or status to be given to the category of organisation. I believe organisation should be seen as itself an emergent phenomenon (requiring diachronic explanation), and one that significantly forecloses the possibility of (synchronic) causal and ontological reduction. Searle at times at least seems to take relational organisation as something like an implicit lower-level background factor – one that is ­explicitly acknowledged when writing abstractly of causally emergent (‘system’) features, but neglected when defending causal reductions. In short, I am suggesting that in Searle’s conception of emergence, there is a mostly present but underplayed referencing of a relational structure

Ontology and the study of social reality  41 (organising the lower-level components) in his accounting for higher-level powers that interest him, and that it is this underplaying of organisational relations that allows or leads him to sanction the idea that causal and ontological reductions are (almost) everywhere feasible. In contrast (and whatever may be Searle’s position), I am suggesting that the organising structure of an emergent entity is itself an ever-present emergent feature. And because any emergent powers of efficient causation possessed by the emergent whole are dependent upon the organising structure, synchronic causal and ontological reduction as understood throughout are proscribed. 2.4  Historical emergence Let me elaborate my argument a little further. I have acknowledged that there is always a historical explanation to any object or property that emerges. Reality is seen to be processual in the sense (or to the extent) that novel entities continually arise out of, and through (re)organisations of, what is there before (albeit with the latter possibly transformed in the process). So to repeat, a full understanding of any emergent form of ­reality requires concrete (diachronic) causal accounts of emergent organisational order. In other words, a significant task facing any science is to provide detailed, empirically informed accounts of how, in different domains, relatively stable organisations of lower-level phenomena do arise (or have arisen). Very often, this is no easy task. All forms of such emergent order somehow results in the face of, and despite, the second law of thermal dynamics, according to which everything tends to entropy or messiness. It thus seems clear enough that emergent order must arise and act via the workings of this law, rather than somehow negating or acting against it. In fact, it appears to be the case in many situations and levels of complexity that emergent organisation is essentially a contingent configuration that is left over after thermodynamic and numerous other processes have worked to eliminate the vast majority of a priori potential configurations of ­lower-level properties. These are issues I explore more systematically elsewhere12. For now, I merely report that in all cases examined, the emergence of the totality and of the organising structure is effectively the same development. Because of this, higher-order properties are not synchronically reducible to lower-level properties alone. And this is the form of reducibility in which the relevant debates (over the nature of emergent properties) have occurred, and which ultimately matters most if we are interested in questions of academic disciplinary autonomy. 2.5  Modern physics Though I cannot elaborate further here on substantive processes of emergence, my concern not only to adhere to the doctrine of naturalism, but

42  A general conception also to be seen to be doing so, does perhaps mean that I need to indicate how I suppose the anti-(synchronic) reduction thesis I am defending coheres with (or anyway is not obviously inconsistent with) those results of modern non-social science (particularly of physics) that appear most to challenge the conception I am defending. Obviously, this is a huge topic and, since the development of quantum theory especially, physics itself, as well as its philosophy, is an area of high contestation. So it is impossible to be comprehensive or inclusive here, or indeed to be more than indicative. Even so, there is an onus on me, I suspect, to at least touch on the manner in which I believe coherence can be sustained, at least against the seemingly strongest challenge from reductionism; and I do believe the anti-reductionist thesis is no less coherent with the results or findings of modern physics than is the doctrine of synchronic reductionism. So in support of this latter contention, and with the foregoing qualifications in mind, let me very briefly focus on particle physics specifically, which may seem to provide the biggest challenge to the position here defended. Proponents of the thesis that emergent phenomena are synchronically reducible have understandably been especially interested in seeking out any fundamental elements from which all others ultimately have emerged, and to which all are ultimately reducible. Particles have traditionally been regarded as the primary candidates for any such fundamental elements. And in particle physics, specifically, the categories of elementary particle and fundamental particle have been fashioned to express just such elements. These categories are applied to phenomena interpreted as particles, but not known to have any substructure; that is, are believed not to be made up of smaller particles. With elementary particles believed not to have structure − and in the standard model, quarks, leptons and gauge bosons are currently regarded as elementary particles13 − they tend to be interpreted as amongst the basic building blocks of the universe, from which everything else is ultimately formed. From such a standpoint, it is easy to suppose that only causation at the level of elementary particles is real or of proper scientific interest. Clearly, from the alternative perspective I am defending, the latter set of inferences, if attractive to many, is not sustainable; simply because even in such a scenario, the emergence of any higher-level causal properties would still depend upon the organisation of lower-level elements, even supposedly fundamental ones. Thus, even here any higher-level causation, being a real property of emergent forms of organisation, would, like the emergent organisation from which it derives, be synchronically irreducible and so warranting of scientific investigation at its own level, no matter how fundamental the elements so organised. But as much or more to the point, any supposition that it is causation only at the level of elementary particles that is real or of proper scientific interest is no longer supported, even within leading branches of ­modern

Ontology and the study of social reality  43 physics, just because, strictly speaking, there are no particles − at least not as conventionally understood. Specifically, according to quantum field theory, or at least its seemingly more explanatorily powerful interpretations14, if anything underpins everything else, it is quantum field processes15, and the phenomena that appear to be particles are the resulting effects of the quantisation of field excitatory activity. The ­particle-like elements are in fact said to be ‘quanta of excitation’ or ‘field quanta’. As such, they are effectively emergent forms of organisation displaying particle-like behaviour. Organisation, in other words, is found to be a fundamental category and a feature of emergent phenomena even in modern physics concerned with ‘particles’; particle-like phenomena are but emergent features – that is, essentially organisations – of quantum field processes (although they are not so much like little balls as organised ripples in a field). Moreover, according to quantum field theory, at least as I interpret it, there is also little reason to concentrate on searching out fundamental forms of organisation (to ground a reductionist programme). For quantum field processes seemingly occur at many different and perhaps all levels, at many different scales and degrees of complexity. It follows that although there are, or can be, relations of dependency between organisations at different levels, there need be no ultimate or base level in quantum field theory, and so no reason for asserting that any one pattern or organisation of process is more fundamental, elementary, genuine, real or basic than any other; all remain of potential interest to science. So, even from the perspective of modern quantum theory, the basic reductionist thesis can be challenged; and a stronger version of emergence of the sort I am defending appears grounded. 2.6  Searle again Interestingly, I find resonances of all this once more in the contributions of Searle. Specifically, in a chapter preceding that in which he indicates his preferred notion of emergence, Searle (1992) discusses the nature of the physical phenomena of the atomic theory of matter. He acknowledges of these phenomena that it is ‘convenient, though not entirely accurate, to call [them] “particles”’ (1992, p. 86). He notes too that when these are not interfered with, they in fact behave more like waves. And he suggests that such ‘particles’ in all the examples considered ‘are organized into larger systems’ (p. 86), adding: Essential to the explanatory apparatus of atomic theory is not only the idea that big systems are made up of little systems, but that many features of the big ones can be causally explained by the behaviour of the little ones. (Searle, 1992. p. 87)

44  A general conception Here I primarily want to emphasise Searle’s apparatus of systems or organisations consisting of (organised) subsystems. Of course, Searle is also supposing of organisations or systems that ‘many features of the big ones can be causally explained by the behaviour of the little ones’. As noted above, I hold that this is correct only if we add the qualification: ‘when these latter “little ones”, perhaps through a process of modification, are organised via structures and relations that are themselves an emergent part of the higher-level emergent system or organisation.’ But putting that qualification aside, it seems that Searle too is of the view that everything is emergent organisation. 2.7 Entities If emergent organisation is seemingly characteristic of all reality, and if features of reality are continually being reorganised (as well as de- or disorganised), it appears that everything is effectively in process. From this perspective, it is perhaps opportune to clarify what, if anything, ­taken-for-granted categories such as things or entities might mean. At this point, in other words, I should probably state explicitly what I have in effect been supposing these categories to mean throughout the discussion of emergence. I suggest that a category such as entity is appropriately used just to express (or can be thought of as expressing) a relatively stable actualisation of a feasible emergent organisation or system of underlying processes. The latter clearly do abound. Field quanta can be relatively stable, and physicists do reasonably continue to use the term ‘particle’ to refer to such stable organisations that reveal ‘particle-like’ behaviour. But examples more immediately relevant to social analyses include human beings, artefacts and, I will argue below, human society or social communities and the like, which are simply relatively stable social organisations. Such a response does prompt the further question of what might be meant here by the notion of organisational stability. Abstractly speaking, stable organisation comes in at least two forms or ‘systems’, the first of which we might refer to as an environmentally closed, or equilibrium, system, and the second of which we can label an environmentally open, or far-from-equilibrium, system. Briefly put, equilibrium systems are stable if there are no disturbances from the outside environment; far-from-equilibrium systems require perpetual inputs from the environment to endure and be stable. A naturalistic example of the former is perhaps an atom, and of the latter a home fire or garden bonfire that needs constant inputs of oxygen and (possibly varying forms of) fuel. Notice that there is no reason in principle why a far-from-equilibrium system cannot evolve in a relatively stable fashion over time, due to a (possibly gradual) transformation in its manner of organisation or/and to

Ontology and the study of social reality  45 variation (possibly systematic) in the necessary stability-facilitating external inputs. I think it is evident that such is the case with both living beings and human societies. I come to discuss the social realm explicitly below. For now, it can be noted that widespread organisational stability is evident but, wherever it is found, is always warranting of explanation. 2.8 Naturalism That the account defended, at least in terms of the aspects so far touched upon, coheres with naturalism should by now be clear. But let me address the issue explicitly. As far as I can discern, dismissals of ‘stronger’ accounts of (synchronic) emergence as being somewhat mysterious and inevitably non-naturalistic turn on two central presuppositions. The first is just that the organisation of lower-level phenomena is itself (implicitly) part of the lower level or otherwise something not warranting explicit attention. The second is the assumed completeness of contemporary accounts, or the asserted causal closure, of the physical world at lower ­levels − a position seemingly accepted by Searle, as well as others (e.g., Kim, 1993a, 1993b). It follows from the latter presupposition alone, if true, that the stronger version of emergence positing irreducible novel causal powers must be untenable. But it is the former presupposition that prevents the second presumption from encountering any effective challenge. I am suggesting, however, that there is a sense in which the lower-level components indeed do not contain all that is causally relevant; and this is precisely because higher-level properties depend in part on how the ­lower-level components come to be organised involving relations external to the components organised, where this organisation is itself part of the higher level. On this conception, although nothing can emerge or happen that was not in some sense already possible, the future is entirely open and possibilities of emergence that are realised are so contingently. To so argue, however, is not to adopt some inescapably anti-naturalistic stance; I am suggesting nothing here that violates the thesis that all explanations are in terms of natural causes. Nor is there anything particularly mysterious about the picture conveyed. Moreover, I am not even proposing that there is anything to be added to the picture that is not already presupposed by opponents of the view of strong emergence. For it is clear that even if the organisation of the lower-level elements be recognised as a higher-level emergent phenomenon, it remains something that is already included as part of the standard naturalistic picture, albeit something that is typically left implicit and treated as a lower-level feature. If the organisation (of lower-level elements) is not viewed as a challenge to naturalism when regarded as a lower-level feature or anyway left implicit and undiscussed, this must presumably remain the case if instead it is interpreted itself as a higher-level emergent phenomenon.

46  A general conception It is reasonable to conclude, then, that the account of strong emergence I am defending, both in principle and at least on the issues covered so far (I turn to the specifics of social emergence below), is quite consistent with ontological naturalism. I have argued throughout that emergent phenomena are neither causally nor ontologically reducible. I have acknowledged, however, that the differences between the position taken here and those of contributors accepting the feasibility of such reductions may not be as significant as they first appear. Perhaps in some cases the differences on the matters discussed are even mostly presentational. I suspect not, but even presentational differences matter. For the form of presentation can have practical consequences − not least to those interested in examining the possibility of, and doing, social science. For if my own account is correct, then it follows that all forms of established science have objects of study that are synchronically irreducible emergent forms of organisations-in-process. And a putative social science is likely to be no different. Indeed, I argue below that this is so. But it is important to recognise first that this is indeed the appropriate formulation if the possibility of a social science is a motivating question and issue. And this is something easily masked where relational organisation is treated as a lower-level given. I fear, too, that accounts of emergent causal powers that treat the relational organisation as a background given will tend to result in a failure to examine not only how this organisation, itself an emergent phenomenon, came into being (morphogenesis), but also how it persists when in fact it does (morphostasis). An account of the mode of reproduction of social organisational structure, indeed, is a feature I believe to be vital for a sustainable account of social ontology, a matter to which I turn shortly below. To sum up the argument so far, I have suggested that philosophical ­rejections of stronger conceptions of emergence are due in part to an inadequately elaborated ontology, to a failure to incorporate or emphasise process organisation or organisation-in-process sufficiently, and specifically as a central form of emergent. However, once it is recognised that, in standard accounts of emergence, the actual relational organisation of ‘lower-level’ elements is usually everywhere presupposed, the move I have made here appears almost unavoidable and perhaps even trivial, albeit one that is nevertheless consequential. The more challenging task, as I see it, is to give explanatorily powerful accounts of actual emergents. It is with this latter undertaking in mind that I turn now to focus on the social realm specifically, to analyse the nature of society or social reality. In particular, my aim is to demonstrate that the emergentist conception I have elaborated in earlier contributions (Lawson, 1997, 2003; Fullbrook,  2009) is not only sustainable, but consistent with naturalism and indeed consistent with the specific (naturalistic) account of emergence elaborated above.

Ontology and the study of social reality  47

3  Social systems I turn then to the study of social reality, and to examine whether a would-be social science has a legitimate claim to be dealing with an emergent (irreducible) object or field of study. Basic to everyday and indeed all human life is human interaction. I take it that this is not contentious. Here I want to elaborate aspects of its nature. A first property to note is that modern interaction takes place mostly within communities. I will (further) elaborate the notion of community in due course (once relevant additional categories of a social reality found to be a highly interdependent are developed), but for now it will suffice to a community as an identifiable, restricted, relatively enduring (if typically evolving) coherent organised grouping of people who share some set of (usually equally evolving) concerns. So conceived, a specific community may or may not be regional; and where it is regional, it can be pan-national or very highly localised or situated anywhere on a spectrum spanned by such cases. Different communities may, and clearly do, overlap, intersect and/or nest. We each of us interact with others within many different communities simultaneously. I take it that, pitched as it is at this relatively high level of abstraction, the observation that interaction occurs in communities so conceived it is not especially contentious. A second feature of human interaction to emphasise is that it is structured by the prevalence of what can be termed ‘collective practices’. By a collective practice, I mean a specific way of going on that 1) is recognised, over an interval in time and within some specific community, as the accepted way of proceeding with regard to achieving a particular outcome; and 2) involves the participation of all members of the community, either through their direct adherence to the given accepted way of proceeding or through their acting in other ways that facilitate, presuppose or otherwise maintain the latter, including avoiding intentionally impeding the actions of those more directly participating. Let me immediately stress that by describing a collective practice as an accepted way of proceeding or going on, the manner in which I am interpreting the category of acceptance here has nothing to do with preference, agreement, support or approval etc. Indeed, many individual participants in a collective practice may be particularly dissatisfied. Rather, the term indicates a way of proceeding that is in fact widely adhered to or observed or recognised by members of a specific community, whatever its intrinsic appeal. As such, the term ‘acceptance’ here − a form of collective or community acceptance (in contrast to the more evaluative notion of individual acceptance that I consider in due course) − is effectively a status. It carries, and rests upon, community-wide recognition and serves to constitute a way of proceeding as the done way. So a collective practice, put differently, is precisely a way of proceeding that (implicitly) has attached to it the status of being a (collectively)

48  A general conception accepted way of proceeding within a community. It indicates something that is the case. Various ways of proceeding might be imagined that could serve any outcome that (whether or not by design) happens to be facilitated through generalised conformity with the accepted way − that is, with the specific collective practice; but for whatever reason, one way has turned out to be the way that is generally observed. Driving on the left side of the road in the contemporary UK might be a simple example of a way of proceeding that is recognised within a community. Using specific words or sentences to convey particular intended meanings is another. So too is queuing in a specific aisle to pay for goods at a local store. Notice that there is always a range of behaviours consistent with any given collective practice. Typically, moreover, a collective practice will encompass several components or subpractices. Thus, the accepted way of shopping at a local store may involve using a metal basket or trolley (provided by the store) as a means of carrying selected goods before purchase; queuing in a specific aisle; paying in one of several accepted ways to a person sitting behind a counter; and so on. But all are part of the collective practice of shopping at the store. Notice too that as a precondition both for a collective practice to be recognised as such − that is, as a way of proceeding that is accepted within a community − and so for successful participation, individuals within the community must have a sense of the scope or boundaries of the relevant community, and recognise any such practice as in effect the property of that community. Very often, practices such as those I am discussing are referred to as ‘social conventions’. But given the many very different and often contested (and frequently inconsistent) interpretations of the category ‘convention’ that are to be found in the social theory literature, and a desire not to be side-tracked by debates over how this particular category is best employed, I shall stick with the notion of collective practice16. A feature of social interaction, then, is the widespread conformity to collective practices, where the latter are everywhere to be found in human societies. I take this assessment also to be reasonably non-contentious; the ubiquity of collective practices, along with widespread conformity to the range of behaviours consistent with each, is seemingly a generalised feature of experience. 3.1 Coordination It is clear that these accepted ways of going on, however they originally came into being, can be, and very often are (in being so ‘accepted’), functional in the sense of facilitating what is, in effect, a form of social life. In particular, they can and do serve to coordinate social interaction by indicating to all would-be (and permitted-to-be) participants within a specific

Ontology and the study of social reality  49 community how, amongst various conceivable ways of proceeding to a certain end, things are in fact done by other members of a community, so facilitating relative stability and thereby a degree of predictability. In making these latter observations, I do not wish to imply a functionalist explanatory orientation. The fact that a specific set of collective processes may be functional to a particular outcome or form of life, in particular through facilitating coordination and predictability, does not necessitate that this is their explanation, the reason they came into being. It can be, but this is not an essential feature of collective practices; a chance meeting, say, repeated and then further repeated and so on, can result in a regularised (set) of originally unforeseen and unintended collective practice(s)17. The point I do want to focus on, however, is that, whatever may be the manner in which specific collective practices come into being and whatever their formal status, they are widely to be found; individuals everywhere (whether consciously or otherwise) regularly use the a posteriori (relative) stability and widespread acceptance of such practices as a basis on which to get by, to form expectations and to decide appropriate action in order to coordinate with the actions of others. 3.2 Normativity It is no doubt in large part because collective practices, where they are successfully produced and reproduced, are functional in various ways – not least in contributing to social coordination, stability and predictability – that the idea of acceptance not only expresses the done thing (or things), but usually also carries connotations of normativity. Indeed, collective practices are often referred to as norms. Normativity arises because, or when, the noted indicative aspect of any collective practice is also interpreted as stipulative, as indicating how an individual ought to proceed. Collective practices, in order to facilitate coordination etc., need to persist, and this usually requires that relevant individuals conform to (various interacting sets of) them. It seems clear that through an upbringing in modern communities, we all learn not merely to recognise the widespread prevalence of collective practices (even, or perhaps especially, as infants we do so in learning accepted ways to eat, drink, speak and even sleep etc.), but also to respect them qua collective practices, to conform to and so help preserve those of the communities we ‘inhabit’ (irrespective of any support or opposition to content); and to seek out knowledge of collective practices of other communities we may have the occasion to ‘visit’ in order to conform. The normative aspect of collective practices thus gives rise to the notion of obligations − a category that, along with the associated category of rights, will be seen in due course to be central to the conception of reality being developed. Obligations are accepted ways in which relevant community members are expected to proceed; rights express accepted ways of going

50  A general conception on in which relevant individuals may proceed. If we are a part of, or wish to ‘enter’ or ‘join’ a community, then when appropriate, we are under the obligation to adhere to its norms or collective practices. At the same time, when we are part of a community, we are permitted to enter into at least some of the community’s collective practices and where this is so, these must be seen as rights (I will come to the issue of the segmentation of, and differentiated access to, certain practices below). It may seem strange to interpret participation in the collective practices of, say, speaking English or shopping in a local store as rights. Yet even these practices exist only as community properties; they allow various individual activities just because the collective practices in question are accepted in the wider community. In other examples, the rights aspects of collective practices are clearer. In the UK, not everyone has the right to drive on a motorway – a licence is required. Also in the UK, individuals under a certain age are not allowed to vote; and not so long ago, nor were gendered women of any age. Rights of individual property ownership have not always been the norm and so on. And of course, even speaking English may not be a right in some courts, say, of the non-Anglophone world. Notice that the role of rights and obligations in structuring social life presupposes the human capacities of being trustworthy and trusting others, of being willing and able to make and keep promises and other commitments, and to believe that others can and will also do so. As is clear in activities such as driving on motorways, any cooperative interaction and ultimately any form of collective action, these human capacities are necessary conditions for the interactions involved to occur, for obligations in particular to be efficacious. As such, these capacities of trusting and being trustworthy etc. qualify as much as anything to be categorised as the glue of social reality, the adhesive that enables the organisational structure to achieve a degree of binding. I elaborate upon many of these issues below. But for now, I am primarily emphasising that we all find ourselves under the obligation to respect the collective practices or norms of the communities of which we are a part, or in which we wish to participate, and fulfilling this obligation is a condition of enjoying the rights to participate directly in, and so benefit from, at least some of the practices of those communities. I might add that a widely interpreted additional right, if not quite an obligation, in many contexts is to criticise in various ways individuals who, though situated within a community, show signs of deviating from or of acting in ways that serve to undermine community collective practices or norms. 3.3  Organisation in process So community life is relationally organised. Amongst other things, it is organised by way of the collective practices and their inherent rights and

Ontology and the study of social reality  51 obligations that structure human interaction. Taken together, human beings, their trusting capacities and their interactions, along with the structural features of collective practices that organise the interactions, amount to a social totality or set of totalities. It is important to avoid reification, however. Notice that collective practices are inescapably processual in nature. The network of existing collective practices is a condition of individual practices and the sum total of individual practices, each a token of a collective practice, serves to reproduce and/or transform the total network of collective practices. Collective practices are both condition and consequence of the individual practices they facilitate. Their mode of being is precisely that of being reproduced and/or transformed through the individual practices or activities they facilitate; they are inherently processual. The overall conception, then, is one of organisation-in-process. We can thus appreciate that any stability provided by a given collective practice is always relative and contingent. Collective practices are indicative of how it is possible to go on in ways that are currently accepted within a community, but it is only through individuals participating in available collective practices that the latter are reproduced (when they are). Equally, through such participation, whether by design or by accident, practices or aspects of them are frequently (and sometimes continuously) transformed. Technological developments or physical transformations often make a difference. Language styles and vocabulary are transformed to meet the needs and restrictions of mobile phone communication; a structural alteration to a grocer’s shop may affect the positioning of queues; developments in computer technology impact on practices involved with buying and selling, banking and so much else. Of course, even when certain practices are collectively accepted within a community, the evaluative orientations of the individuals involved are not irrelevant to their stability. Collective acceptance, though by no means the same thing, cannot stably exist without at least some form and degree of generalised individual acceptance, unless of course there is physical coercion or huge personal or community ‘costs’ to desired changes. Here it is useful to distinguish individual acceptance to participate in a collective practice and individual acceptance of the merit or legitimacy of the practice. Sufficient conditions for individual acceptance to participate in a collective practice are seemingly that the individual 1) understands the practice; 2) recognises that it is regarded as ‘accepted’ within the community and so is operative − that is, that it is a collective practice; and 3) is willing (for whatever reason, including purely instrumental ones) to go along with the (range of behaviours consistent with the) collective practice. In contrast, individual acceptance of the legitimacy of a collective practice additionally turns on evaluations made of the practice’s intrinsic merit, how it was instigated (fairly, openly or otherwise), the nature of its consequences (e.g., whether it involves a community subgroup being

52  A general conception oppressed as a result) etc. Of course, the fact of a given practice being accepted within a community is typically in itself some ground for it being regarded as legitimate. In many cases, however, this may not be sufficient, at least for specific individuals. Clearly, then, it is interesting to consider how (if at all) the stability of collective practices varies according to the degree of individual acceptance of their legitimacy; and perhaps in particular how negative individual evaluations of the legitimacy of a given collective practice can and often do emerge and/or gain a voice and/or give rise to forms of action that lead to the collective practice in question being transformed or replaced. Of course, everything moves forward from ‘here’ − that is, everything is path dependent, so that there is always continuity in change, just as there is usually change in continuity. The point, though, is that with collective practices being given to individual actions, and being reproduced and/or transformed only through the sum total of those actions, everything is in process; so that such stability as is found, though often relatively enduring a posteriori, is always contingent and never fixed. 3.4  Social emergence The picture so far laid out is only a very partial version of the conception of social reality that I have defended previously; and I extend it significantly below. But even this brief sketch, which I hope is relatively non-contentious, is indicative of how social reality fits with the general account of (synchronically irreducible) emergent organisation-in-process elaborated above. Certainly, the conception of social reality so far elaborated (though highly partial), turning on the category of collective practice, is of an emergent form of organisation; it is a (normative) mode of organisation of individuals that facilitates forms of coordinated interaction, (relative) stability and predictability that would be unavailable to each individual in the absence of any such organisation. In other words, certain powers of coordinated interactions are available to individuals qua community members, constituting affordances, involving rights and obligations, that would not have emerged if human individuals were instead mere-biological beings that just happened to be situated in close time-space proximity of others but without much, if any, sense of group collective practices. So we already can recognise a form of organisation (of human interactions) that is ontologically irreducible, involving powers or affordances that are thereby causally irreducible. Notice that it is because such collective practices, as emergent forms of organising structure, are efficacious in facilitating coordinated interaction that their reality is established. And it is because they are irreducible to the individuals and individual practices that they organise that their relative autonomy is equally grounded, as is that of an appropriately oriented social science.

Ontology and the study of social reality  53 When and how human collective practices first appeared on the scene is a question for historical investigation. It is feasible that amongst early groupings of our ancestors, found-to-be useful patterns of behaviour gave rise to physical dispositions or inclinations to act in certain ways, which eventually morphed into collective practices with associated rights and obligations. The existence of rights and obligations seems to presuppose the ability to represent obligations and rights in some at least rudimentary manner. This is an ability, parenthetically, that Searle believes only appeared with the emergence of language (see especially Searle, 2010)18. I am not so sure; language, it seems to me − especially a language capable of representing rights and obligations − is in part built on, and presupposes, the (prior) existence of normative collective practices (concerning how words and sentences, or at least basic sounds and signs, are to be interpreted etc.). But however that may be, we certainly live now in a linguistically infused universe, and community-relative collective practices carrying rights and obligations that serve to organise social life are seemingly ubiquitous. 3.5  Social rules I turn now to develop or extend the conception of social reality so far given. In so doing, let me first observe that it is with respect to the normative aspects of collective practices that social rules come into play. These, as I interpret them, are basically expressions of the content of acceptances under their purely indicative aspect, interpreted as stipulations. They are representations of norms, interpreted as generalised procedures for action (see Lawson, 1997, Chapter 12; 2003, Chapter 2). As such, they can always be (though they need not be, and are not always) expressed in a codified form along the lines of: In C, if X then Y Here C is the relevant community or context, X is the type of activity and Y is the content of a collective practice. For example, if in the relevant community C, an individual wishes to drive on public roads, to wear appropriate dress for a particular event such as a wedding or a funeral, or to communicate a certain idea to others, all being instances of X, then the content of some Y, such as drive on the left etc., indicates the accepted way of doing it19. I do not wish to suggest that rules are always a posteriori features of spontaneously evolving collective practices. Clearly, rules may equally be introduced in an a priori fashion via a decision or declaration by a relevant body or subgrouping of the community and designed to facilitate new forms of collective practice or coordination, or to transform the manner in which forms of coordination have previously been achieved etc. But either way, a rule is an expression or formulation of a normative aspect of a collective practice, whether as emergent representation or by

54  A general conception design. Thus, on this understanding, a rule is something that may be broken, or never codified, or conformed to without acknowledgement, misinterpreted etc., and so is clearly ontologically distinct from the practices with which it is associated20. 3.6  Division of practice, process and events A further elaboration of the picture so far set out (slightly touched upon above in noting that community-wide collective practices are effectively rights) is that, whether the concern is with declared rules or more spontaneously emergent rules, not only are specific collective practices limited by the stretch or jurisdiction of the community of which they are the properties, but within any community, specific practices are typically limited further and differentially allocated. In short, there is a division of collective practice. It is accepted that certain practices can be followed by some, but not by others. To follow particular practices, it is necessary to belong to specific subgroups within a community. Further still, particular practices accessible to some community m ­ embers are always oriented to, and indeed are constituted in relation to (i.e., are internally related to) different practices accessible to others. Thus accepted (highly restricted) practices associated with teachers and students are not just oriented to, but presuppose, each other; as is the case of the (equally restricted) practices associated with employers and employees, landlords or landladies and tenants, parents and children, leaders and followers (e.g., in partner dances such as jive or tango), buyers and sellers etc. Similarly, even those practices of shopping in the local corner shop are not merely different from, but presuppose those entered into by, the owner, the cashier, the supplier of goods to the store, the store cleaner and so on. Collective practices then cohere and interrelate with others, and indeed are constitutively interdependent. Parenthetically, a question that might reasonably be put at this point is whether all internally related interactions are best considered as part of the same collective practice. Are the accepted ways of going on for the cashier part of the same collective practice as shopping in the store? If university lecturing presupposes (and is a presupposition of) the activities of others participating as members of a student audience, are all implicated activities part of the same collective practice? Is goalkeeping in a football game part of the same collective practice as being an outfield player? In part, this is a matter of choice of use of categories. But I think things are clearest and simplest if we interpret lecturing as a separate ­(multicomponent) collective practice to that of being a student; shopping as a separate practice to cashiering; goalkeeping as a separate practice within a football game to playing outfield and so on; though always recognising that all distinguishable collective practices are oriented to, and mostly indeed constituted in relation to, those of others.

Ontology and the study of social reality  55 Any internally related combination of practices we might term a collective process. Examples are the continuous interactions on a university campus or in a marketplace, or the incessant traffic on a motorway21. And a collective process often supports distinguishable episodes or subprocesses that we might identify as collective events, such as a particular lecture, concert, wedding or football game, or perhaps a specific purchase. In all this, once more, the framework of acceptances is fundamental. Within any community, it is accepted that one set of practices constitutes an accepted way of proceeding for group X, and a second set, perhaps constituted in relation/orientation to the first, is an accepted way of going on for group Y. Similarly, there are usually accepted ways of allocating some individuals to group X and others to group Y; processes of allocation that are themselves clearly each a form of collective practice. Thus, the appointment/allocation of certain individuals to the category of university lecturer in the UK will proceed according to university and nationally accepted ways of making such appointments etc. 3.7 Positions It is these different groupings, each with its own associated accepted sets of ways of proceeding, that I have previously identified (and continue to identify) through use of the category of position. This is a central and significant category in the conception I defend. A position or rather position occupancy is an accepted status that confers a social identity; to be allocated to a specific position is to acquire the social identity of being so positioned. For example, an individual allocated to the position of university lecturer acquires the social/positional identity of (is accepted within the community as possessing the status of) university lecturer. Notions of rights and obligations are now clearly seen to be associated with positions and thereby group membership. If some positional practices may be participated in by a specific set of appropriately positioned individuals, it is typically only a subset of those same practices that should be undertaken by these positioned individuals. To continue with the example of a university lecturer, an individual so positioned in the modern-day UK is typically allowed to use a faculty library, or work in her or his faculty office at any time of the day; these are included amongst the employment rights that go with the post and are not available to all members of the wider UK community. But the individual is typically not only allowed, but additionally required, to give lectures and set and mark examinations etc; these are included amongst the employment obligations of the position. Positional rights and obligations, so conceived, always go together; certainly, the former presuppose the latter. So a position is essentially a locus of a set of specific rights and obligations, where the accepted position occupants are the agents or bearers of these rights and obligations and typically acquire a status or identity associated with them.

56  A general conception Notice, however, that it is not just the incumbents of specific positions that incur obligations associated with them. Some others or some agency somewhere must ensure that rights such as those mentioned above can be met. Some positioned individuals or groups have the obligation to ensure processes are in place serving to fund and facilitate universities, schools and libraries, to maintain lecture halls etc. 3.8 Power Notice yet further that positional rights and obligations ultimately relate to ways of influencing the behaviours of others, whether directly (e.g., teachers’ powers to instruct students) or indirectly, through having influence over restricted community resources (e.g., academics’ right of access to libraries and other publicly funded research facilities that constitute resources that are not available to all). Even obligations involved in serving time in prison or acting as servants possess this characteristic. It thus seems reasonable to refer both to rights and to obligations as (positional) powers. Indeed, they are constitutive of what might reasonably be termed social, collective or positional power. Such power, in other words, expresses positioned rights and obligations to participate in specific ­others-affecting collective practices that are granted to accepted occupants of relevant positions22. A fundamental feature of modern social reality, then, is a multitude of interrelating multicomponent collective practices, processes and events constituting or grounding a complex (clearly equally emergent) structure of positional powers, comprising rights and obligations, in process. Incidentally, it is not just human beings that acquire social identities through being socially positioned; inanimate objects do too. Obvious examples are those that, when suitably positioned, take on the identity of cash, passports, other identity cards, deeds of ownership, wedding rings etc. But this process applies to all objects that (or when they) are brought into social being; all acquire social identities through being positioned in various ways and their being so always depends on community acceptance. Of course, when inanimate objects are so socially positioned, the capacities or powers most closely associated with their (system) positioning take the form not of rights and obligations, but of (system) functions. I return to this topic in the final section below; for the remainder of this section, I focus on positions occupied by human individuals. 3.9  Social relations All forms of social being, then, depend upon positions and are associated with some form of positioned powers. The most fundamental are those immediately occupied by human beings. It is reasonable, therefore, that the category social relation be used to express the manner of connection of

Ontology and the study of social reality  57 social positions, or at least those occupied by human individuals. But such social positions are connected precisely through the accepted rights and obligations associated with them. Thus, on the conception I am elaborating, a social relation just is (or is first and foremost) an accepted set of rights and obligations holding between, and connecting, two or more positions or occupants of positions. Social interaction can be understood as the contingent actualisations of such social relations. It follows that because rights and obligations are forms of power, there is a sense in which all social relations are power relations. Social relations, so understood, are not restricted to connecting those positions we tend explicitly to acknowledge as social identity constituting, such as those of teacher and student, employer and employee, landlord and tenant, parent and child, and so on. Others are to be found to hold so widely in a community that we may overlook the positionality involved. These include relations of creditor and debtor, or gendered man and woman, or even citizen and non-citizen. In some cases, the positionality may (erroneously) seem to be (merely) one sided just because the relation is between one explicitly positioned (or small group of) individual(s) and all others. A property relation is of this latter sort, at least within much of the modern world. If someone in a specific community, such as the contemporary UK, owns, say, a house or a lake, then everyone else in that community is in the position of not owning this house or lake. The owner has rights of access, use and disposal of it; the rest of us have the obligations involved in respecting and facilitating the owner’s rights. Of course, at an appropriate level of abstraction, an identical set of rights and obligations is available to all current UK domestic property owners. But such considerations usefully serve to remind us that there is nothing preordained about ownership per se; rather, the latter is seen to be a human community construct, a merely conventional, if at this time highly customary, feature of certain specific geo-historical and cultural forms of human organisation. When members of a community accept or observe a situation of property ownership, even if there is only a single person in the community for whom property rights are to hold (say, a tribal chief in regard to her or his dwelling), the members are accepting or observing consequences for everyone. This recognition reinforces the idea, implicit if not explicit throughout, that all collective practices are positioned and other-oriented. As such, it is evident that human beings qua social beings are always beings-in-social-relations. 3.10  Power and its pursuit I might briefly note how the conception laid out bears on how we understand activities concerned with the pursuit of power, a fundamental activity of modern societies. Clearly if, as I argue, community sanctioned

58  A general conception power (over others) mostly takes the form of positional rights (and obligations), it follows that much of the intentional pursuit of power in modern societies takes the form of human activities whereby those involved seek either 1) to acquire occupancy of existing relatively powerful positions; 2) to transform (or defend) the rights and obligations associated with existing positions already occupied; or 3) to create, and thereupon occupy, novel positions with emergent associated rights. The practices both of individuals seeking to gain entry to established powerful positions and of positioned individuals and groups concerned to improve/defend/undermine existing positional rights and obligations are familiar enough topics of social theory, especially within industrial relations, human resource management and labour market studies. But the manner in which particular individuals and groups are able, often with relative ease, to increase their power over others just through creating novel positions that they then frequently themselves occupy perhaps deserves more attention. This is usually achieved via the device of declaring novel ‘legal entities’ or some such, which are effectively statuses or placeholders allowed by, and within, a wider community (and established by way of following procedures and/or collective practices of the relevant community). The establishment of these formal entities tends to disguise the fact that basically what is pursued and created is a new structure of power relations. This is a topic that I can do little more than mention here, though I can perhaps note that an obvious way in which an individual or group can create novel forms of power over others in contemporary Western society is by establishing/registering a novel company (UK) or corporation (US) that serves the goals of its establishers. Very little need be involved in creating the relevant powers; typically, not even buildings are necessary. Indeed, in order to register or be incorporated (in the UK or the US), little more is required than for the individuals concerned to supply a company name and address (the latter can even be that of a third party such as an accountant), officer details (a director can be sufficient, though a secretary is also typical), details of any share capital and shareholders, and a payment; and to file a memorandum and articles of association. But the process is straightforward and incorporation can even be completed online/electronically. Following a successful application, the resulting company or corporation is thereby ‘granted’ many of the same legal rights as an actual person, but usually with limited liabilities. Companies or corporations, which may be made up of a single person or a group of people, thus effectively exist as legal persons, providing or constituting in effect legal devices that provide (typically) limited protection to the actual people involved in the activities of the company or corporation. And power for those involved is thereby achieved over numerous others and − not least where profit seeking is involved − over those who are unable to raise capital themselves and so must serve (somewhere) as company employees23.

Ontology and the study of social reality  59 These are not matters I can elaborate upon here. I merely emphasise that a significant if perhaps under-theorised feature of social reality is the various endeavours to set up legal entities and other formal organisations or formal titles, motivated by the goal of establishing, and thereafter exercising, novel forms of power (always over others). If the conventional route of those involved is to present the situation as one in which the positioning of individuals, and the subsequent activities of positioned individuals, are derivative of, and subservient to, the goals of some seemingly neutral, or perhaps laudable, legal entity, associated organisation or some such, the fact is that the creation of the latter entity is often, and perhaps usually, derivative of, and subservient to (and tends to work either to legitimise or to mask), the power aspirations of the individuals involved. The point of establishing and maintaining devices such as companies and other formal bodies is to establish a novel structure of power relations between people24. To return, however, to the more general point, modern societies are characterised by social relations that are constituted in terms of positional rights and obligations, representing forms of positional powers (always over others). The community-based opportunities available to us all depend upon the positional powers we can access. So not surprisingly, a significant feature of social life in modern communities is the prevalence of activities oriented to getting access to, and/or transforming (or just maintaining/defending), and/or creating novel forms of, positional powers (over others). 3.11 Community At the start of the discussion of the nature of social reality, the community was conceptualised as an identifiable, restricted, relatively enduring (if typically evolving) coherent grouping of people who share some set of (usually equally evolving) concerns. I need now to elaborate this conception so that the community too is seen not as a foundational category (there clearly are no social foundations), but as an emergent and also contingent component of a human-practice dependent social reality in process. Some way into the discussion, I argued both that collective practices are effectively properties of communities and that even the most general or open of a community’s collective practices carry rights and obligations. I have since argued that rights and obligations are always associated with social positions. It follows, then, that each community is precisely a totality comprising the set of occupants of a certain specific social position along with (and organised through) all the structures bearing upon those positions, including, not least, the rights and obligations associated with the relevant position. As such, the concerns that community members share may or may not be reducible to the powers and interests that derive from position

60  A general conception membership, but the latter will be a major part of the members’ concerns. And, significantly, with every community, even very short-lived ones, being associated with certain (positioned) rights and obligations, there is a clear sense in which each community must be seen to be a moral community. Notice, incidentally, that from the start I used the category of ‘collective practice’ or ‘norm’ to express what is essentially a community status ­conferred on a way of proceeding by way of its being (collectively) accepted. I am now suggesting that community membership or participation (i.e., position occupant) is, in the same way, itself a status, so that any associated collective practices can indeed be viewed as status practices; where participation in such collective practices is amongst the rights and obligations of community membership. If every community corresponds to, or is underpinned by, a social position, a reasonable question to pursue is whether it is equally the case that every social position supports a community. Notice that on the conception I am defending, any given community may 1) contain subdivisions or subgroupings each with its own differentiating and internally related positional powers; and/or 2) be itself a subgrouping of a broader group so that its members have access to the positioned powers of the broader grouping, though also possessing some of their own defined relationally to other such subgroupings. So the question before us includes enquiring whether all such sub- or meta-groupings of a given community are equally communities. I suggest that any position can be said to support a community. An intuitive difficulty with responding in the affirmative perhaps (at least for those social positions that are occupied by more than one individual − which is typically the case) is that everyday notions of community often carry a sense of a coming together over some concerns, whereas it is always possible that there are positions where occupants do no such thing, or at least do not do so regularly or universally25. However, this difficulty, if such it is, can be circumvented by distinguishing between a community in itself and a community for itself, with positional identity associated with the former. In most cases, I suspect, a community in itself so conceived has the potential to become a community that is also for itself, as a response to perceived threats, crises or challenges (or opportunities) that can at any time affect the always very real and objective common set of positioned rights or concerns and obligations or responsibilities of those appropriately positioned. In other words, there is always the potential for the positioned agency stemming from membership of any community to morph into the collective or corporate agency of a community for itself, including defensive associations and/or unions, social movements, vested interest groups and the like, strategically focused on realising and/or directing (emergent) powers to systematically engage in action to transform, retain or obtain various sets of structural features or conditions thought to be unfair or under threat, or perhaps just desirable and achievable26.

Ontology and the study of social reality  61 So in summary, social reality is found to comprise a multitude of interrelating multicomponent collective practices, processes and events that both ground and presuppose a complex system of positions, positioned rights and obligations − that is, social relations, which are always in process, and serve, amongst other things, to organise individuals as community participants and sometimes as collective or corporate agents. 3.12  Social emergence and the notion of social structure The conception supported is clearly one of complex organisation in process. The various features so far discussed that result from, and serve to relationally organise, human beings and individual activities, without being reducible to those individuals and their individual actions, I have previously collected under the head of social structure. So understood, social structure is not something additional to the phenomena so far discussed; nor is it a stuff of which they are composed. Rather, it is merely a general category that collects together the collective practices, acceptances, positions, rules, rights, obligations and suchlike that are emergent features of human actions and interactions and which relationally organise the individuals as communities. So the picture is one of emergent ­social-structural organisation-in-process. Such social structure is (synchronically) emergent in the sense of being dependent upon, but distinct from, and ontologically and causally irreducible to, the individual activities which it serves in turn to facilitate and coordinate. Rules in particular are, as already noted, emergent features that, although serving to guide individual action, can be broken or ignored or misinterpreted in individual acts, as well as remain unacknowledged or never codified. Rights allow ways of proceeding, but without determining specific actions. And even with obligations, there are many ways of acting in accordance with the rules; there are many conceivable ways, for example, of fulfilling one’s duty to give a lecture, bring up children, drive within the rules of the road etc. Moreover, there are occasions when formal rules at least are systematically broken, such as maximum speed limits on UK motorways (and yet still influence actual speeds, in that drivers typically do not exceed the formal limits ‘excessively’). 3.13  Process once more Clearly, social structure, so conceived, is continually undergoing transformation, whether intended or unintended, understood or hardly recognised. I have already noted how power relations can be affected by the intentional establishment of novel legal entities. In addition, and again as already observed, once numerous individuals have been allocated to (or

62  A general conception have had allocated to them) a given position, and no matter what the basis for being so allocated, they frequently seek, as collective or corporate agents, to transform the accepted sets of rights and obligations (to challenge the power structure) associated with their position (and conceivably thereby to transform the nature of that position in some more or less fundamental manner). In the past, individuals allocated (typically, but not necessarily, at birth) to the gender category of ‘women’ campaigned for the right (where it was denied) to vote; and today they still seek everywhere to transform structures of discrimination and/or oppression. Similarly, specific categories of employees frequently agitate for better work conditions and (other) rights in the workplace etc. But at least as significantly, even where position occupants do not intentionally seek so to transform their positional rights and obligations, these powers are nevertheless continually being transformed through practice (whether inadvertently or otherwise). And indeed, this applies to the content of all forms of collective acceptances. All social phenomena depend on us and so their continuing existence depends on their being reproduced through our individual practices in total. This is their mode of being. But we can systematically change how we behave, whether through learning, technological advances, accidents or whatever. When we come to act, the contents of previous acceptances – whether embedded in agreements, precedents or suchlike – are given to us; and through our acting we both draw on them (whether or not we are explicitly aware of this), and also (if typically unintentionally) contribute not just to the reproduction of social structures, but also to their transformation. Notice that even where reproduction of aspects is the outcome, this is a contingent achievement, warranting as much explanation as does change. Social reality is everywhere intrinsically dynamic in nature. But so too the human individual exists as a process of transformation. The structural context facing the individual not only makes a difference through enabling and constraining and facilitating certain causal powers amongst others, but also affects the very nature of human individuals. It makes a difference to the path and form of development of the capabilities, motivations and acquired needs etc. − in short, to the formation and evolution of the nature of a particular human being, whether the individual is situated, say, as a slave or slave owner in a slave-owning society; as a serf (freeman, villein or cottager) in European Manorialism (or ­Seigneurialism); as a worker or employer in a modern capitalist society; or indeed how the individual is gendered whatever the time and place. We develop psychological tendencies and social capabilities according to how and where in space-time we are situated and as a result of our experiences through life. Like social systems, human beings are organisations in process; and we have here a clear process of co-development of human individuals and society as each are continuously reproduced and transformed through the sum total of individual practices.

Ontology and the study of social reality  63 Parenthetically, it is notable that this vision is very different from that conveyed by (or most easily read into) the theory of society developed by Searle (despite the significant similarities that I believe exist between Searle’s basic account and that maintained here), just because of Searle’s lack of attention to emergent organisation-in-process. According to the conception I defend, human beings, their personal identities and activities, and opportunities are organised through emergent social structure that is itself reproduced and transformed through the sum total of the individual practices that this structure in turn facilitates. Searle’s focus is on the effects of individuals on social structure to the seeming exclusion, certainly a relative neglect, of the effects of the latter on the former. A significant result is the repeated use of the category of creation in Searle’s writing, and the almost total absence of categories of ‘reproduction’ or ‘transformation’ or ‘process’. Notice, finally, that there is nothing non-naturalistic about the account of social reality that I am maintaining. Some aspects are structural patterns or structural features of accepted forms of collective practices. Others are ideational, including varying representations or interpretations of aspects of collective practices, other features of social structure, as well as of social totalities, along with the content of all community acceptances, including the outcomes of past decision-making processes or official declarations bearing on matters such as collective practices or the distribution of rights of access to community positions (and so to accompanying positional rights and obligations) etc. And social entities or wholes will include the human individuals or material objects that the noted features of social structure serve to relationally organise. But there is nothing mysterious or non-naturalistic in any of this. 3.14  Human intentionality If, in being consistent with naturalism, the focus is upon intentional states and practices of individuals, a seemingly inevitable and indeed fundamental part of the concern must also be with the capacity for human beings to cooperate. Indeed, the concern is with how individuals can cooperate in a manner such that each is doing something in accord with numerous others doing either that same thing or something that is in some constitutively way related. This will most obviously be so in the case of a collective event. An individual playing football will be doing so as part of a team; or an individual may be playing the violin as part of an orchestra etc. This form of cooperative behaviour can be described as, or as involving, the sharing of intentional states − whether beliefs, goals, desires, intentions etc. For completeness, then, I should, in concluding the current ­section, briefly consider the remaining rather fundamental question of how shared intentions and individual intentions are related.

64  A general conception One line of reasoning, prominent at least in contemporary economics, which at first sight may seem to address this issue in a satisfactory way (but ultimately does not), is that formulated under the heading of common knowledge. According to this conception, an event or state of affairs is said to be the object of common knowledge among a group of individuals if each one knows it, and if each one knows that the others know it, and if each one knows that each one knows that the others know it etc. Common knowledge is thus the limit of a potentially infinite chain of reasoning about the event in question. Common knowledge, moreover, is assumed to be achievable. So if there is to be a coordinated action, then the notion that, say, two of us intend to do something together amounts to the idea that I intend to do it in the belief that you also intend to do it; and you intend to do it in the belief that I also intend to do it. Each of us believes the other has beliefs about our own such beliefs, and beliefs too about those, and so on ad infinitum. As well as the sheer implausibility of this theory of intentionality, in the end it does not provide a conception of a collective or shared intention anyway. It does not deliver an account whereby the individual intentions of each participant in an activity derive from shared intentions. At no point do we have ‘we intentionality’; only ‘I intentionality’ (perhaps plus something else). Yet in reality, a musician in a band or a member of a sports team has the intention to play, but only as part of the wider intentional activity. An alternative conception − one seemingly derivative of contributions of Wilfred Sellars (e.g., 1965, 1974), but in fact significantly advanced, much elaborated and made influential by Searle himself (e.g. Searle, 1995) − holds that the capacity for collective intentionality is a biological primitive. On this view, collective intentions cannot be reduced to, or eliminated in favour of, something else; specifically, ‘we intentionality’ cannot be reduced to ‘I intentionality’, which is essentially the strategy of the previous conception with its notion of common knowledge. On Searle’s conception, it can be maintained that all mental life of a given individual remains inside her or his own brain (or anyway body), without necessitating that an individual’s mental life be expressed only in the form of a singular noun phrase referring to herself or himself. An individual can have a collective intentionality taking the form of ‘we intend’ etc., allowing that, in the case of cooperative behaviour of the sort under discussion, the individual intends only as part of a group intending. Even this idea seems to require the further human capacity of being able to connect in a deep way with others. And indeed, the latter appears to happen continuously, as a condition even of following an argument in a research paper, or in a play or programme on TV. Where such identification is contingently achieved by one or more individuals, and a third party speaks or otherwise intervenes, the connection can easily be lost or broken.

Ontology and the study of social reality  65 If the notion of collective intentionality as developed by Searle is the more viable of the contending alternatives, and indeed collective intentionality, or something like it, seems to be an essential condition for the emergence of a social reality of the sort maintained here, it remains the case that, in any context of collective cooperative activity, each individual needs to know both what to do and how to do it. And this, of course, is where (the contents of) collectively accepted ways of doing things or collective practices and/or of the distribution of positional power enter the picture and return us to the social ontology laid out. To summarise, the foregoing is an outline of the ontological conception I have previously defended, interpreted more explicitly and systematically from the perspective of social reality as an emergent ­human-agent-dependent (set of) social organisation(s)-in-process. It is a conception in which the causal powers of human beings qua social beings include the positional powers that are the properties of emergent social systems or set of organisations-in-process, organisations in which the ­human individuals are socially situated and through which they are themselves continually formed and transformed. Needless to say, I have provided here only a sketch (if a longish one) of a conception of social ontology. But I hope I have elaborated certain key features sufficiently to convince that it is possible to sustain an account of emergence of the sort I have previously advanced, one that abstractly applies to social and non-social realms alike, without the result seeming to be overly mysterious or compromising the thesis of (ontological) naturalism.

4  Social objects including human artefacts and other inanimate objects Let me lastly return briefly to the earlier noted observation that it is not just human beings that are attributed social identities through their being socially positioned; inanimate objects, including artefacts27, are too. Think of large sea pebbles, say, being positioned as paperweights; or pieces of paper or bits of metal positioned as cash; bits of plastic positioned as passports or credit cards etc. Some constructions in the UK as elsewhere that were originally designed as churches or schools or barns are now positioned as homes etc. Social reality comprises in some part a multitude of inanimate objects, mostly humanly constructed as artefacts, that obtain social identities through being socially positioned in various ways. Seemingly, all constructions and uses of artefacts or inanimate devices are intended to expand the range of human capabilities; and the positioning of inanimate objects serves the same end. This positioning of objects (as with the positioning of humans) is always as components in the formation of an emergent organisation or system,

66  A general conception however rudimentary. A result is that in describing the properties of any particular object, the primary focus is very often on that subset of its causal powers that contributes to the overall workings or maintenance of the system. Indeed, these causal powers tend, thereby, to be referred to as the positioned object’s functions; they are looked upon according to how they function as a component of the system. Thus, objects become positioned as, say, tables, seats, eating, drinking and serving utensils etc. Over different times, places and cultures, the objects so positioned will vary in shape, size, form and material content (just as, at any point in time and space, there are very often entirely different inanimate objects that could have been successfully positioned in the place of each). But in all cases, positioned objects of the sort listed facilitate the needs of a system of human beings participating in collective practices bound up with sharing food together. And the (set of) power(s) of each object that contributes to this end is seen as its (set of) function(s). (In turn, of course, the meal itself may be a component of a wider system, functioning perhaps to facilitate regular family or tribal gatherings, or in specific cases perhaps to celebrate a family member’s birthday or mark another occasion.) Very often it is the case that certain items can be (and are) positioned in two (or more) different systems simultaneously and so possess two (or more) sets of functions, one for each system (just as a human individual can simultaneously serve as, say, a parent and a grocer). Thus, an item of clothing may serve both as part of a system providing protection from the elements for a particular human being in winter, say; and also, by identifying the wearer of the clothing as a member of the police force, a member of a specific football team, a bride or a priest, as part of an additional (more collective) system. A house or painting or ornament may function according to the specific uses made of it in servicing, say, a family home, but share in common a power to retain, and so function as a store of, value in another system. Similarly, of course, those powers or properties interpreted as functions can change as objects are repositioned. An item for sale in a shop is identified as a commodity and has the function of being tradable (for credit) at a given price. But from the perspective of a different system (and once purchased, it can be inserted into a system where) its function is in line with its more specific uses (as a hammer, screwdriver etc.). Notice that the object(s) positioned in any social system may be, and typically will be, modifications of antecedent or precursor objects as, say, when a block of wood is resized and reshaped to function as a door in a building; or a piece of card is engraved or marked in order to serve as a ticket to a concert or for a train journey; or bits of metal are stamped etc. in order to serve as coins. Thus, although certain capacities or powers that are treated by us as functions of positioned items may in some cases (as with the sea pebble paperweight) be possessed intact before

Ontology and the study of social reality  67 the object is incorporated into the social system, in numerous cases they will be acquired/achieved through the process of modification and/or positioning. I noted earlier that legal entities such as companies and the like are typically created derivatively of the desire on the part of some to acquire positional power. It should be clear that similar objectives govern the production and positioning of many concrete artefacts − not least buildings positioned/identified as offices, factories, stadia, university departments etc. The latter, as with the legal entities with which they may be associated, are not prime determinants, but the ever-dependent, always potentially transformable, products of practices oriented to accumulating positioned powers for specific individuals. There are numerous issues of significance that arise from this brief account that I cannot explore here. I am certainly not seeking to advance a comprehensive theory of artefacts. However, there is one matter that I do want to address, just because of its relevance to all that has gone before. I have argued that where positions are immediately occupied by human individuals, the associated positional powers (over others) of which positioned individuals are the agents take the form of (system) rights and obligations. However, for the agent or bearer of any such powers to be able to exercise these powers effectively, the individuals concerned must be identifiable as their bearers. In consequence, very many inanimate objects are positioned in just such a manner that (relative to a particular system) their function is precisely to identify an individual as an occupant of a specific position and so the bearer of the set of associated positional rights and obligations. This is the case of objects positioned as, say, uniforms, deeds of property rights, certificates of all forms, wedding rings, identity cards, passports, tickets, licences etc. In such cases as those just listed, I suspect it is not overly contentious to claim that in each instance, a capacity that is singled out as the positional function in at least one system is that of serving as a symbolic identifier (of the position or status of the possessor of the object). I want briefly to suggest that the capacity of symbolic identification underpins the function even of forms (at least) of monetary items, not least those objects that are positioned as cash or currency (banknotes and coins). 4.1  The nature of cash This is no more the place to advance a general theory of money than it is to develop a comprehensive theory of artefacts. However, I do want to expand a little on the remark just made about the function of cash. For with capitalism being a social system primarily oriented to processes of money ­ nobservable  – accumulation, and with modern money being essentially u in communities like the UK, money is constituted as positioned statebaked bank debt (see chapters 5 and 6) – any items used to identify forms

68  A general conception of money are significant indeed. Cash is one such item. That is, cash, strictly speaking, or so I suggest, is not itself money, and nor is it any form of debt/credit relationship. Rather it is an observable (easily transportable and transferable but difficult to counterfeit) item that functions only to identify individuals who are holders of money qua positioned debt. Imagine a situation in which I visit my local grocer’s, with the intention of making purchases, but forget to bring my wallet. The owner of the shop, recognising me, and believing me to be trustworthy and receiving an income (literally to be creditworthy), allows me to take my ‘purchases’ on credit (this is an event that has actually happened more than once). I could sign a piece of paper, and so create an IOU note, recording my debt; the latter would serve to identify myself as the debtor (the person with the obligation) by my signature, as well as the creditor (the person with the right to expect payment), namely the grocer, through the latter’s possession of it. I am taking for granted here that a monetary/accounting system is accepted throughout the community involving an accepted unit of account, in terms of which debts are conventionally expressed. If the baker next door to the grocer shares the same opinion of my trustworthiness and creditworthiness, the grocer could in principle use this credit with me to ‘purchase’ bread or whatever, transferring that credit (with me) to the baker to cancel the debt incurred by this purchase of bread, passing on the IOU note (perhaps endorsed by the grocer) to the baker in the process, allowing the latter to be identified as the person now holding the credit. It is important to recognise, however, that in this example it is the debt relation that has value and serves as a means of payment. It exists whether or not an IOU note is created. If an IOU note is created, it acts, as I say, merely as an identifier; it is not per se the credit-debt (right-obligation) relationship itself. If the grocer or baker were to misplace the IOU note, I would still have an obligation to redeem by debt and would so if I remembered it; indeed, there is a good chance we would all remember the debt relation involved. And if the grocer, baker and I knew each other very well it is conceivable that such a debt relation could even be repeatedly transferred between the three of us, with or without a written IOU note, as often effectively happens within some families or between some friends. Any piece of paper, etc., serving as cash in a modern economy such as the UK works in the same way as the IOU note in the sense of being an identifier of something beyond itself. Specifically, the system function of an object positioned as cash is, as I say, precisely to identify a particular underlying but positioned form of debt relation, this form being bank debt, a form that throughout the community has been accepted as positioned as money28. Of course, money so formed does not itself, qua money, function as debt/credit, but according to uses laid down in legal tender laws (see chapters 5 and 6 for an elaboration). My focus here, though, is on cash as an identifier of something beyond itself, of something that is not directly continuously observable.

Ontology and the study of social reality  69 A significant difference between the limited use of a local IOU note and the community-wide employment of cash – an additional one to the obvious contrasts, such as the sheer quantity of cash in circulation, the sorts of guarantees and requirements or fiats that come with state backing of money and its identifiers and the contribution of other significant institutions etc. – is the impersonal nature of cash use. At any moment in time, the current holders of the positioned debt associated with cash are identifiable only through their possession of specific instances of cash. Thus, because a £20 note will be a unique identifier/record of a particular (positioned) debt obligation, if it is accidentally destroyed it appears that value is destroyed. However, I suggest that technically it is not – that which disappears is any means of proving the identity of the parties involved and, in particular, the money holder. Indeed, if instead of being accidentally destroyed, the bank note is merely severely damaged or contaminated, it is often the case that it will be replaced by the issuer29. But the money qua positioned debt is not itself thereby replaced; indeed, it is the latter’s continuing existence that explains the issuer’s willingness to replace the damaged note30. Notice too that when on ‘decimal day’ (15 February 1971) UK and Irish citizens exchanged ‘old’ notes and coins denominated in imperial units for ‘new’ ones denominated in metric units, the money qua positioned bank debt held by those exchanging forms of cash remained intact throughout (albeit with its value now expressed in different units)31. The notes and coins per se are not money qua positioned debt but merely symbolic markers or identifiers of those currently holding it (and indicators of the values involved). It is the distinction between the two, the cash and money qua positioned debt, that makes the events of ‘decimal day’ intelligible. In short, objects positioned as cash do not themselves constitute a ­community-accepted general means of payment, i.e., money, but rather are devices that merely facilitate exchange between those that hold money and those that seek to sell specific commodities or services etc. They achieve this through serving to identify holders of money, its issuer, and the amounts possessed. Of course, in drawing the noted distinctions, I have accepted that the term money be allocated to just the item of value accepted throughout as serving as a general means of payment. Competing terminological strategies exist, including using the term money to refer to both cash and the item of value that it identifies (as Ingham 2004 for example appears to do) or even perhaps to interpret the latter two together as money. I fear that these options and others like them are liable to, and indeed do serve to, confuse; rarely even are they consistently maintained. But whatever the terminological strategy adopted, it is clear that cash along with other monetary mechanisms (such as credit cards, cheques, and electronic banking devices, etc.) facilitate the transmitting/transferring of any general means of payment by way of allowing the holders of the latter, where it takes the

70  A general conception form of positioned debt and credit, to be identified. As such, whatever we choose to designate with the category of money, it is the case that cash and related devices are essential components of modern accounting/­monetary systems that go hand in hand with the non-continuously observable forms of value (currently) positioned as a general means of payment, and indeed allow the expansion and speedy transference of the latter. The functioning of a system as conceptualised throughout, then, where positioned rights and obligations are essential features, is dependent on devices, including a vast variety of document forms, that allow the agents or bearers of specific powers to be readily and accurately identified. And under capitalism any devices that function to identify the agents of credit rights (and debt obligations), whether or not the latter are positioned as money, are fundamental indeed, whatever forms those devices take (and whatever aspects of the overall accounting system to which we may choose to attach the term ‘money’). There is certainly more to be said about systems of symbolic identifiers or markers in general. But for current purposes I merely emphasise two features. The first is that the functionality of the objects like cash, deeds of ownership, passports, etc. – that is, their capacity to serve as i­dentifiers – rests on their incorporation/positioning within a wider system via collective acceptance. The second is that once so incorporated these identifiers often work to allow the systems in which they are components to expand way beyond small communities with personal ties (wherein acquired powers can rest on memory) and sometimes to cover the totality of communities on the planet, in some cases allowing an unceasing accumulation of power (always over others) in the hands of a relative few, and in ways that affect us all. There is, as I say, much more to be said on all this and indeed on the subject matter of social artefacts in general32. But the foregoing must suffice here. Even before I considered the social positioning of inanimate objects, the case for the relative autonomy of social science was found to be established. However, because the system of positional powers (of individuals and groups over each other) in the form of rights and obligations is found to be so fundamental to human society, and because the positioning of inanimate objects, and in particular those serving as identifiers, is essential to the functioning of this power system, the latter must equally be recognised as of fundamental interest to social science. It is often no trivial matter to understand the way in which objects including numerous documents, positioned as identifiers, facilitate, maintain and extend the powers (rights and obligations) that appropriately positioned groups and individuals can wield. And such matters are of consequence. Amongst other things, indeed, they are fundamental to understanding the very stability (and crises, not least financial crises – see Lawson, 2009) of the worldwide social system as a whole, a system in which the accumulation and distribution of power, as theorised here, are all-pervading determining features.

Ontology and the study of social reality  71 4.2  Similar conceptions, quasi abstract entities and objects of knowledge Let me close this section by briefly drawing out some important features of the position I have been advancing through examining its bearing on certain related assessments proposed by others. Specifically, in debate with Searle, Barry Smith writes: More precisely, property relations belong to the realm of the ­quasi-abstract and they are in this respect comparable to symphonies, laws and other quasi-abstract denizens of the social world. That they exist on the side of the objects and not on the side of the concepts in people’s heads can be seen from the fact that concepts can exist even where there are no corresponding objects. (Smith, 2008, p. 47) He adds: When we buy and sell, however, we are interested not in concepts but in the objects themselves: in equity and capital, and in all that goes together therewith—starting with the simple trading, offering, and splitting of stock and moving on to the unimaginably complex edifices of contemporary derivatives markets. (Smith, 2008, pp. 47–8) In response, Searle writes of Smith: 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. 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 preexisting obligation, our fulfilling an obligation. And when you realize this the threat to naturalism disappears. (Searle, 2008, p. 48) From the vantage point of the conception I have been developing, I am not convinced there is any real opposition here, and nor is there a threat to naturalism. Social relations − whether property, credit or whatever − are indeed objects of knowledge and not reducible to our concepts of them. But there is no need to locate them in some mysterious ‘quasi-abstract’ realm, whatever that might mean. They take the form of the content of previous collective practices, the outcomes of past interactive processes within some social organisation, indicating the collectively accepted rights

72  A general conception and obligations. As such, they are no challenge to naturalism. Although Searle’s response is consistent with this, I see no reason to conclude, as Searle seems to imply, that the obligation, as a form of positional negative power or requirement accepted within the community, is something in which we are not interested as an object per se, or a property of a social object/system. Indeed, I suspect that a rather high proportion of disputes that come before the law courts, or which arise in the workplace or industrial relations tribunals, or even family homes, are disputes regarding the nature or content of existing rights and obligations. The resolution of such disputes may require the scouring of relevant documents, the rehearsing of earlier conversations, a tracing out of past patterns of practice to uncover implicit acceptances, including the content of agreed or tacitly accepted collective practices or norms etc. But all such matters constitute a legitimate subject matter for social science. The latter is concerned with all aspects of the emergence, nature, (re)production and transformation of the positional power structure that organises human social being. This is a not a topic I take further here. For now, it is enough to suggest that by accepting the framework of rights and obligations as one comprising real irreducible system features, as objects of knowledge sometimes to be understood only through lengthy investigation, we can reconcile the likes of both Smith and Searle. We also achieve a social realism of the sort that accommodates the version of emergence advanced, without in any way compromising a commitment to naturalism.

5  Final comments In the light of the particular account of social reality defended above, it could simply be argued that social science obviously exists, and does so as a legitimate practice, just because − like every other extant form of cooperative interactive human activity − it is a collective practice named and sponsored, and so accepted, within various communities and carried on by a group of people, appropriately positioned (i.e., in conformity with accepted collective practice) as agents of associated (again communally accepted) rights and obligations, and thereby identified as social scientists. Of course, the contention really objected to by the earlier noted detractors of social science is that this particular community of would-be social scientists, however we name their practices, can in principle make the same sort of contribution to understanding our world as does the community of non-social scientists. The presumption here is that the material conditions for supporting a social science that could be scientific in the sense of non-social ‘natural’ science are absent. However, I have argued that this latter presumption is incorrect. All forms of established science have objects of study that are effectively

Ontology and the study of social reality  73 (synchronically irreducible) emergent forms of organisations-in-process, and in this respect social science is no different. And just as with other sciences, social science is especially concerned with the (irreducible) causal properties of its domain of study. Of particular interest are social causal powers that exist at the level of structure. Here, social causal properties are those of collective practices, positions and associated rights and obligations and so forth that serve to organise us all. So social science is found to be, amongst other things, a discipline significantly concerned with the production, reproduction, distribution and redistribution of positioned powers in all their numerous (monetary, industrial/corporate, financial, educational, legal, gendered, age, interregional, communicative, familial, religious, tribal, cultural, ethnic etc.) forms. Of course, I have only briefly touched upon many of the various issues mentioned above, achieving little more at the level of social theory than outlining a possible agenda for social science. But that is essentially the point: to establish that a meaningful agenda for (a sustainable) social science is entirely feasible. I might stress, finally, that because social reality is found everywhere to be constituted through social relations or positioned powers, dependent upon, and reproduced and transformed through, human practice, it follows that all the various traditional branches of social science ultimately deal with the same basic subject matter and are thus best conceived not as separate disciplines, but as divisions of labour in a single (if as yet insufficiently integrated) social science (as I have often argued – see, e.g., Lawson, 2003, 2006). Accepting or acknowledging this situation, I suggest, does not constitute a diminution of the various existing strands of social science, but rather amounts to recognition of the basis on which the relative autonomy of each is legitimately founded.

Notes * First published as Tony Lawson (2012), ‘Ontology and the study of social ­reality: emergence, organisation, community, power, social relations, corporations, artefacts and money’, Cambridge Journal of Economics, 36(2): 345–385. † The basic arguments and positions defended in this paper were worked out over many years and usually presented, if not determined, at meetings of the Cambridge Social Ontology Group (CSOG), and I am very grateful to members of CSOG in more ways than I can acknowledge. I have been convinced of the usefulness of revisiting the topic and belatedly ‘putting out’ the paper at this time, and in its current form, both by the re-emergent topicality of the subject matter and by what I believe to be common misapprehensions over what can be, or is, defended concerning the matters discussed. Additional presentations of the content of the paper include talks given when, in 2008, I spent time visiting the Berkeley Social Ontology Group (BSOG). I am especially grateful to John Searle and other members of BSOG for their feedback. I am also indebted to referees and the assessors of the Cambridge Journal of Economics, and numerous others for additional helpful comments along the

74  A general conception way. For financial support with finishing off this paper, I am grateful too to the Independent Social Research Foundation. 1 The same reception, needless to say, greets would-be specialist (branches of) social science, such as a putative economic science (for recent dismissals see, e.g., John Kay, 2010; Rupert Read, 2007) or a political science. Some commentators, of course, reject the idea of science altogether. None of these positions, it will be seen, coincides with my own. 2 See McSmith, 2010. 3 Thus, philosopher of science Brian Ellis (2002) has concluded that: however successful the sciences of ecology, economics, sociology and the like might be in achieving their aims, we have no good reason to be realistic about the theoretical entities they employ, for these theoretical entities are invariably just the elements of model theories. He dismisses the theoretical entities and claims of modern economics in particular as ‘just economic fantasy’ (Ellis, 2002, p. 32). 4 By ‘objective’ here, I mean existing independently of or at least prior to their being studied. Of course, I do not suppose that social reality remains totally unaffected by its being studied, or indeed by any other form of interaction with it. 5 By designating a science as relatively autonomous here, I mean simply that it is a form of study whose results are indispensable to understanding and not merely temporary stand-ins for (awaiting redescription in terms of) the results of some more fundamental reducing science(s) such as psychology and/ or (other aspects of) biology. 6 Prior to studying the nature of society as such, Searle had already developed a theory of speech acts to explain the move from physical utterances to meaningful speech acts; as well as a theory of the mind to explain how a world of consciousness, intentionality and other mental phenomena ‘fit into a world consisting entirely of physical particles in fields of force’ (Searle, 1995, p. xi). 7 These are questions of morphogenesis (see Lawson, 2013 [Chapter 7, this book]). 8 Of course, quite different accounts of the interconnectedness (or otherwise) of reality prevail − far more, certainly, than I can seriously consider here. Some are very different indeed. For example, the vision of the Amerindians is that originally there was no differentiation between humans and (other) animals, and separation occurred not as humans evolved from animals, but as animals lost qualities retained by humans. Animals are ex humans. In some accounts, indeed, humankind is the original form of everything and not just of animals. It is also held that many animal species, as well as certain other types of non-human beings, retain a spiritual component that qualifies them as ‘people’. In certain versions, moreover, the manifest bodily forms of various non-human species conceal internal humanoid forms visible to shamans and certain other privileged beings. From this perspective, the task that I have set myself above of explaining the emergence of social relations and suchlike is a non-issue: all relations (between all phenomena in the world) are social relations, and were so from the start (see, e.g., Lévi-Strauss,1964–71; Weiss, 1972; Viveiros de Castro, 1998, 2004). 9 It is a conflation of the two that encourages some contributors to advance the confused notion of ‘downward causation’, according to which a whole can somehow have a causal impact on its own components/parts (see Lawson, 2013 [Chapter 7, this book]). 10 When such modification occurs, it is even clearer that emergent properties are irreducible to the original items, where the latter must now be seen as

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antecedents to or precursors of (as opposed to) constituents of the emergent organisation or whole. Of course, there are notable exceptions. Amongst those contributors who at some point connect causal powers to organisation, some (but not all) adopt roughly similar positions to my own, see: Morgan, 1923; von Bertalanffy, 1971; Archer, 1982; Sperry, 1986; Campbell, 1990; Bickhard, 2000; Smith, 1997; Buckley, 1998; Cilliers, 1998; Cunningham, 2001; Sawyer, 2001; Elder-Vass, 2007. For example, any such emergent-order-as-remainder may take the form of simple configurations left in place following processes of low-level mutual cancelling; or the cumulative multiplication of initial ‘constraints’ of ­lower-level elements that are contingently amplified during any such process; or, at higher levels of complexity, of features that become fortuitously reinforced and amplified through processes of reciprocal selection, as or where processes such as those discussed become recursively embedded (see ­Lawson, 2013 [­Chapter 7, this book]). Previously, the hadrons (mesons and baryons such as the proton and neutron) and even (whole) atoms have been regarded as elementary particles. I do not wish to suggest that this is the only interpretation of quantum field theory or that this interpretation is devoid of problems. Some do still hold to a particle interpretation of quantum field theory (see Landsman, 1996; Teller, 1990, 1995) and others hold different ontologies still, including event ontologies (see e.g. Auyang, 1995 and Dieks 2002). However, it is the field process interpretation that seems the more explanatorily successful (see Brown and Harré, 1988; or Bickhard, 2000). For an accessible general discussion and overview, see Kuhlmann, 2009; and for related discussions on all aspects of the issues touched upon, see for example Cao, 1997, 1999; Castellani, 2002; Davies (ed.), 1989; Faye, Scheffler and Urchs (eds.), 2000; Kuhlmann, 2000; Kuhlmann, Lyre and Wayne 2002; Redhead 1980, 1983, 1988; and Seibt, 2002. Moreover, it is held that quantum field processes themselves, being processes, have no existence independent of how they are organised, that these processes can only exist in organised patterns (see Whitehead, 1967 [1925]; Brown and Harré,1988; or Bickhard, 2000). I might acknowledge, though, that many interpreters of quantum theory maintain − along with Niels Bohr, who first introduced the quantum into the atom − that quantum theory actually refutes the doctrine of realism itself. For a good discussion of the realism issue in the history of quantum theory, particularly focusing on the main early protagonists for realism (Albert Einstein) and against it (Niels Bohr), see Kumar, 2009. Perhaps the most recent experimental input widely interpreted as supporting the anti-realist viewpoint has come from a group of physicists in Austria whose findings seem to rule out a broad class of hidden-variables theories (for an explanation and particular defence of hidden variables theories, see Norris, 2000) that focus on realism, and, in reporting to find ‘local realistic theories untenable’, have encouraged an interpretation of their results that implies that reality does not exist when we are not observing it (see Gröblacher et al, 2007). Others claim on separate grounds that quantum theory implies that reality is only our creation. Each such anti-realist interpretation has its specific limitations. But as a general response, I think it is sufficient to recognise that the numerous surprising, and, for many, often shocking, quantum experimental findings are themselves indicative of an objective reality existing independently of us; these experiments repeatedly give rise to the same often difficult to interpret, and equally often actually undesired, outcomes, not because of us, but despite us. In other words, the history of quantum theory indicates very well that the aspects of reality studied act reliably according to

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their own natures, affecting how we can interact with them, including observe or measure them, whatever the (often intellectually opposed) experimenters differentially expected, wished for or feared in their (repeated) findings. In other words, even, and seemingly especially, at the atomic level, nature does not allow us to find of it anything we prefer or choose. For good discussions of the category ‘convention’, see especially Latsis 2005, 2006, 2009; and Latsis, de Larquier and Bessis 2010. Many years ago, on a Monday evening in the bar in Kings College Cambridge, I happened to bump into a student of whom I was a supervisor. We discussed philosophical ideas germane to the student’s research. The student thought it would be helpful to meet again and about a week seemed to be the required time to prepare. So we arranged to meet the following Monday in the same place. Other students who I supervised, who were also interested in philosophy, asked if they could come along too. They did, the meeting was successful and we agreed to meet once more on the following Monday evening. Twenty-­ two years on [2012], the meetings are still occurring on Monday evenings. They are now known as the Cambridge Realist Workshop and visitors often structure visits to Cambridge to ensure an overlap with Mondays within the ­Cambridge University term in order to come along. Other events in Cambridge are structured to coordinate with the workshop. For many of us, the workshop signals ways of going on that have become the accepted ones for achieving various wanted outcomes, even though this was never an original plan or expectation. It is this belief that in some part underpins Searle’s conclusion that society is essentially linguistic; that there are no social objects, merely different (social and ‘institutional’) facts about naturalistic objects and how we treat them. Of course, the category of social rule is also highly contested. For a useful overview, see Al-Amoudi, 2010. A further distinction that is usefully drawn is between rules that are implicit within a collective practice but perhaps not articulated or acknowledged by a relevant body, and those that are explicitly acknowledged and stipulated by a relevant community authority. Though in many workplaces various perks are widely treated as norms and so rule governed, these are often never explicitly acknowledged as such by those with the power to formulate rules of employment (and in consequence are often the first to be disputed when changes are deemed necessary). In contrast, matters concerning wages, normal working hours, length of holidays and various other terms of employment are often formalised and explicitly stated in a contract. In the UK, the maximum speed limit for motorway driving laid down by the relevant authorities is 70 miles an hour, though the operative rule, nowhere explicitly acknowledged, seems to be that driving at 80 miles an hour is everywhere allowed. I adopt the practice of referring to the rules that are operative, but not explicitly acknowledged by a relevant body as informal rules, and to those that are explicitly recognised as formal rules. The latter are usually codified, but the former could be as well. So the formal/non-formal distinction is not identical to the codified/non-codified differentiation. An interesting question is whether a specific collective practice can be participated in by a single individual. I see no paradox in answering in the affirmative. At a moment in time, there may be only a single prime minister in the UK or president in the US, but over time different individuals may undertake similar practices. Perhaps someone who has served an institution in a fundamental way is given an honorary post carrying various rights and so allowed to follow certain practices, and this turns out to be a unique situation/ creation. Even so, I think there is an implication that had someone else been

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in a position to make the same contribution, he or she too would have been granted the same sort of status. The ways of proceeding so facilitated remain accepted as ways of going on by a relevant community (for a relevant [set of] individual[s]), and participation always requires the participation of others in interaction. An alternative terminological strategy would be to refer to all such allowed social practices as rights, with the subset of required practices being obligations. Instead I have chosen to refer to all positionally allowed practices as powers, reserving the term ‘rights’ for those allowances that are not also required. As such, rights and obligations might be thought of respectively as positive and negative powers. Of course, the establishment of formal organisations can facilitate positions of power over others in ways that are not, or not primarily, centred on the ­production of profits. The establishment of media outlets is an obvious example. In the UK, many tabloids are currently run at a loss, but allow their owners and/or editors to influence public opinion in ways they could not without the device of newspaper proprietorship or the legitimating status of editorship etc. Somewhat related, within the academy an increasingly common development is for specific individuals (or small groups) to set up new journals and to announce themselves as the editors. In a context where publications and citations etc. make a significant difference to academic careers, the ease with which specific individuals can, and do, establish for themselves positions in which they immediately acquire the right/authority to arbitrate on these matters is perhaps a matter of interest (or concern). Self-appointed editors i­ mmediately assume for themselves the right to determine, for their journal, which would-be contributors are to be published, the content encouraged of authors, which additional authors and/or contributions should be (and sometimes even which should not be) cited, discussed and so on. To achieve this end, a foundation or charitable trust or some other formal organisational entity may also be set up, or an alignment with an existing one established, or both, but the procuring of the relevant novel powers is the typical motivating factor. Despite elaborating a conceptual framework on social reality that in many ways (not explored here) is different from that which I defend, this is a conclusion that, at least with respect to corporations, Searle also reaches in his recent book (Searle, 2010, p. 98). Thus, he writes of the act of creating a corporation ‘that the whole point of doing this is to create a rather elaborate set of power relationships between actual people; indeed, the corporation consists of such relationships’. Searle’s treatment of the corporation here departs from his earlier conception (Searle, 1995), and is seemingly presented as a somewhat exceptional feature of social reality. However, working within Searle’s framework, Arapinis (2011) suggests instead that the structure involved is likely the generic case, concluding that ‘institutional entities are, above all, “placeholders for a set of actual power relationships among actual people”’. Actually, it is not so easy to identify position occupants where subgroups at least never come together as communities, as I have discovered through using Google. If we consider position occupants such as academics, British citizens, wives or refugees, the former two are clearly familiar enough as groups who self-consciously come together in promotion of shared concerns – under the categories of the academic community or, say, the British community in Spain or Hong Kong. But actually, although categories of wife or refugee might seem less promising (or did so to me), a quick search on Google reveals tens of thousands of examples of communities of each. An alternative categorical strategy is to restrict the term ‘community’ to members of any position where there is indeed a ‘coming together’ over shared

78  A general conception concerns. I go with the strategy laid out in the main text (that each position grounds a community in itself, a potential community for itself); but either way, the important point is that the category of community rests on the central one of social position, and either way the usage seems satisfactory if consistently applied. Indeed, either way, the association of the category of community with that of social position has analytical advantages. In social theory, there seemingly is no term in ready use for the collection of individuals that share any given position. At the same time, the category of community is often contested, usually left unsystematised and sometimes even abandoned as without referent. Understood here as occupants of a given position, even if restricted to cases where there is a coming together based on shared concerns, the category of community thus unusually performs an unambiguous, systematic and fundamental role. Other advantages include allowing the familial use of the term ‘community’ to alert us to the existence of (positioned) rights and obligations that have in no way been formally or perhaps even knowingly instituted. A local village may have evolved certain ‘community’ practices regarding transport, tidiness, noise, dress or whatever, and newcomers and visitors can be reprimanded if they seek to participate in (the rights of) village life without conforming to what are effectively the obligations of the community. 27 The analysis which follows can also be extended to various animate ‘objects’, such as all those positioned as pets or livestock. 28 And of course, the pieces of paper or bits of metal positioned as cash possess all the additional causal powers associated with paper and the metal concerned, and numerous substitute items or devices are imaginable that could serve uniquely to identify those holding the money, including increasingly electronic forms. 29 For example, on a section of the Bank of England’s current (November 2011) website entitled ‘Damaged and Mutilated Banknotes’ (www.­ bankofengland.co.uk/banknotes/damaged_banknotes.htm), members of the public are informed that: The Bank will give reasonable consideration to claims made in respect of banknotes which have been damaged accidentally. In making our assessment we take into account a number of factors. A key consideration for the Bank is that we should not knowingly pay out twice on the same banknote. Therefore, as a general rule, there should be physical evidence of at least half a banknote before payment can be made although an explanation of how damage has occurred to the banknote will be taken into account. If the Bank receives an application where less than half a banknote has been submitted and the Bank is unable to reasonably ascertain whether a larger portion of the banknote still exists, it is unlikely that payment will be made […] The Bank currently receives around 30,000 individual applications per year, totalling around £18 million. Despite the high volumes the majority of claims are assessed within a few days. The list of ways in which banknotes become damaged is almost endless – from those accidentally put through a washing machine to those chewed by the family pet. Banknotes hidden for safe keeping can often be overlooked. Those concealed in places such as ovens or microwaves run the risk of burning whilst banknotes hidden under floorboards or in gardens become damp and eventually decay. 30 Also notice that when, in comparison, a signed cheque (say, also to the value of £20) is lost or damaged, the result need not be that the underlying positioned debt relation, and in particular the identity of the money holder, cannot be established. Lost or damaged cheques are often replaced by their issuer

Ontology and the study of social reality  79 because the latter possesses an alternative record of any debt relation (including a record both of the debt that had been issued and of what had, and had not, been ‘cashed in’). 31 Actually, the switchover was not quite a one-day event; in fact, the transition process started several years before the arrival of decimal day, with numerous items priced in both currencies for some time both before and after decimal day. The current 5p and 10p coins appeared indeed in April 1968, taking the same size, composition as the shillings and florins that remained in circulation with them. The current 50p coin appeared in October 1969, with the old ten-shilling note being withdrawn in November 1970. The old halfpenny was withdrawn from circulation on 31 July 1969 and the old half-crown (2s 6d) followed on 31 December. The new ½p, 1p and 2p were introduced on 15 February 1971, and on 31 August 1971, the penny and threepenny were officially withdrawn from circulation, ending the transition period. 32 Further related discussion of such matters can be found in Clive Lawson et al., 2007, Clive Lawson 2008.

References Al-Amoudi, Ismael (2010) ‘Immanent non-algorithmic Rules: an ontological study of social rules’, Journal for the Theory of Social Behaviour, vol. 4, no. 3, 289–313. Arapinis, Alexandra (2011) ‘Anchoring the Institutional in the Material: Searle’s Constitutive Rule Revisited’, paper presented at the Making the Social World Conference, Milan, June mimeograph, IHPST. Archer, Margaret (1982) ‘Morphogenesis versus structuration: on combining structure and action’, British Journal of Sociology, vol. 33, 455–83. Auyang, Sunny Y. (1995) How is Quantum Field Theory Possible? Oxford and New York: Oxford University Press. Bertalanffy, Ludwig von (1971) General Systems Theory, London: Allen Lane. Bickhard, Mark H. (2000) ‘Emergence’, pp. 322–348 in Andersen, P.B., Emmeche, C., Finnermann, N.O., and Christiansen P.V. (eds.) Downward Causation, Aarhus: University of Aarhus Press. Brown, Harvey R. and Rom Harré (eds.) 1988, Philosophical Foundations of Quantum Field Theory, Oxford: Clarendon Press. Buckley, Walter F. (1998) Society - A Complex Adaptive System: Essays in Social Theory, Amsterdam: Gordon and Breach. Campbell, Donald T. (1990) ‘Levels of organisation, downward causation, and the selection-theory approach to evolutionary epistemology’, pp. 1–17 in Greenberg G., and Tobach E., (eds.), Theories of the Evolution of Knowing Hillsdale: Erlbaum. Cao, Tian Yu (1997) Conceptual Developments of 20th Century Field Theories, Cambridge, UK: Cambridge University Press. Cao, Tian Yu (ed.) (1999) Conceptual Foundations of Quantum Field Theories, Cambridge: Cambridge University Press. Castellani, Elena (2002) ‘Reductionism, emergence, and effective field theories’, Studies in History and Philosophy of Modern Physics, vol. 33, 251–267. Cilliers, Paul (1998) Complexity and Postmodernism: Understanding Complex Systems. London and New York: Routledge. Cunningham, Bryon (2001) ‘The reemergence of “emergence”’, Philosophy of ­Science, 68, S62–S75.

80  A general conception Davies, Paul (ed.) (1989) The New Physics, Cambridge: Cambridge University Press. Dieks, Dennis (2002) ‘Events and covariance in the interpretation of quantum field theory’, pp. 215–34 in Kuhlmann, Meinard, Lyre, Holger and Wayne, Andrew A. (eds.), Ontological Aspects of Quantum Field Theory, Singapore, London and Hackensack: World Scientific Publishing Company. Elder-Vass, David (2007) ‘For Emergence: Refining Archer’s Account of Social Structure’ Journal for the Theory of Social Behaviour, vol. 37, no. 1, 25–44. Ellis, B. (2002) The Philosophy of Nature: A Guide to the New Essentialism, Chesham: Acumen Publishing Limited. Faye, Jan, Scheffler, Uwe and Urchs, Max (eds.) (2000), Events, Facts, and Things, ­Volume 72 of the series Poznañ Studies in the Philosophy of the Sciences and Humanities, Amsterdam: Rodopi. Fullbrook, Edward (2009) Ontology and Economics, London and New York: Routledge. Gröblacher, Simon, Paterek, Tomasz, Kaltenbaek, Rainer, Brukner, Časlav, ­Żukowski, Marek, Aspelmeyer, Markus and Zeilinger, Anton (2007) ‘An experimental test of non-local realism’, Nature, 446, pp. 871–5, April 19. Ingham, Geoffrey (2004) The Nature of Money, Cambridge: Polity Press. Kim, Jaegwon (1993a) Supervenience and the Mind, Cambridge, UK: Cambridge University Press. Kim, Jaegwon (1993b) ‘The non-reductivist’s troubles with mental causation’, pp. 189–210, in Heil, J. and Mele,A. (eds.) Mental Causation, Oxford: Oxford University Press. Kuhlmann, Meinard (2000) ‘Processes as objects of quantum field theory’, pp.  ­365–388, in Faye, J., Scheffler, U. and Urchs, M. (eds), Events, Facts, and Things, vol. 72, Poznañ Studies in the Philosophy of the Sciences and Humanities, ­Amsterdam: Rodopi. Kuhlmann, Meinard (2009) ‘Quantum Field Theory’, in Zalta, Edward N. (ed.), The Stanford Encyclopedia of Philosophy, Spring 2009 edn, (last accessed 8 February 2012). Kuhlmann, Meinard, Lyre, Holger and Wayne, Andrew A. (eds.) (2002) Ontological Aspects of Quantum Field Theory, Singapore, London and Hackensack: World Scientific Publishing Company. Kumar, Manjit (2009) Quantum: Einstein, Bohr and the Great Debate about the Nature of Reality, London: Icon Books. Landsman, Nicolaas P. (1996) ‘Local quantum physics’, Studies in History and ­Philosophy of Modern Physics, 27: 511–525. Latsis, John (2005) ‘Is there redemption for conventions?’ Cambridge Journal of Economics, vol. 29, no. 5, pp. 707–727. Latsis, John (2006) ‘Convention and intersubjectivity: new developments in French economics’, Journal for the Theory of Social Behaviour, vol. 36, no. 3, pp. 255–277. Latsis, John (2009) ‘Hume and the concept of convention’, Recherches sur la ­Philosophie et le Langage, vol. 26, pp. 217–234. Latsis, John, de Larquier, Guillemette and Bessis, Franck (2010) ‘Are conventions solutions to uncertainty? Contrasting visions of social coordination’, Journal of Post Keynesian Economics, vol. 32, no. 4, pp. 535–58. Lawson, Clive (2008) ‘An ontology of technology: artefacts, relations and functions’, in Techné: Research in Philosophy and Technology, vol. 12, no. 1

Ontology and the study of social reality  81 Lawson, Clive, Latsis, John and Martins, Nuno (eds.) (2007) Contributions to Social Ontology, London and New York: Routledge. Lawson, Tony (1994) ‘A realist theory for economics’, pp. 257–85 in Backhouse, Roger (ed.), New Directions in Economic Methodology, London: Routledge. Lawson, Tony (1997) Economics and Reality, London: Routledge. Lawson, Tony (2003) Reorienting Economics, London: Routledge. Lawson, Tony (2006) ‘The nature of heterodox economics’, Cambridge Journal of ­Economics, vol. 30, no. 2, 483–507. Lawson, Tony (2009) ‘The current economic crisis: its nature and the course of academic economics’, Cambridge Journal of Economics, vol. 33, no. 4, 759–88. Lawson, Tony (2013) ‘Emergence and morphogenesis: causal reduction and downward causation?’, in Archer, M.S. (ed.), Social Morphogenesis, New York, Springer, pp. 85–105. Lévi-Strauss, Claude (1964–71) Mytholiques, vols 1–4, Paris: Plon. Lloyd Morgan, C. (1923) Emergent Evolution, Gifford Lecture delivered 1922 at the University of St Andrews, London: Williams and Norgate. McSmith, Andy (2010) No Such Thing as Society: A History of Britain in the 1980s, London: Constable and Robinson. Norris, Christopher (2000) Quantum Theory and the Flight from Realism, London and New York: Routledge. Redhead, Michael, L. G. (1980) ‘Some philosophical aspects of particle physics’, Studies in History and Philosophy of Science, vol. 11, 279–304. Redhead, Michael L. G. (1983) ‘Quantum field theory for philosophers’, pp. 57–99 in Asquith, Peter D. and Nickles, Thomas (eds.), Proceedings of the Biennial Meeting of the Philosophy of Science Association: PSA 1982, vol. 2, East Lansing: Philosophy of Science Association. Redhead, Michael L. G. (1988) ‘A philosopher looks at quantum field theory’, pp. 9–23 in Brown, H. R. and Harré, Rom (eds.), Philosophical Foundations of Quantum Field Theory, Oxford: Clarendon Press. Read, Rupert (2007) ‘Economics is philosophy, economics is not science’, International Journal of Green Economics, vol. 1, no. 3/4, 307–325. Sawyer, R. Keith (2001) ‘Emergence in sociology: contemporary philosophy of mind and some implications for sociological theory’, American Journal of Sociology, vol. 107, 551–85. Searle, John R. (1992) The Rediscovery of the Mind, Cambridge, MA: MIT Press. Searle, John R. (1995) The Construction of Social Reality, London: Penguin Books. Searle, John R. (1999) Mind, Language and Society: Philosophy in the Real World, ­London: Weidenfeld and Nicolson. Searle, John R. (2008) ‘Coda: Searle versus Smith (replying to Barry Smith 2008)’, pp. 48–51 in Smith, Barry, Mark, David M. and Ehrlich, Isaac (eds.), The Mystery of Capital and the Construction of Social Reality, Chicago and La Salle: Open Court. Searle, John R. (2010) Making the Social World: the Structure of Human Civilisation, Oxford: Oxford University Press. Seibt, Johanna (2002) ‘The matrix of ontological thinking: heuristic preliminaries for an ontology of QFT’, pp. 53–97 in Kuhlmann, M., Lyre, H. and Wayne, A. (eds), Ontological Aspects of Quantum Field Theory, Singapore, London and ­Hackensack: World Scientific Publishing. Sellars, Wilfrid (1965) ‘Imperatives, intentions, and the logic of “ought”’, pp. 159–218 in Castaneda, H. N. and Nakhnikian, G. (eds.), Morality and the Language of Conduct, Detroit: Wayne State University Press.

82  A general conception Sellars, Wilfrid (1974) Essays in Philosophy and its History, Dordrecht: D. Reidel Publishing. Smith, Barry (2008) ‘Searle and De Soto: the new ontology of the social world’, pp.  35–48 in Smith, Barry, Mark, David M. and Ehrlich, Isaac (eds), The ­Mystery of Capital and the Construction of Social Reality, Chicago and La Salle: Open Court. Smith, Thomas S. 1997. Nonlinear dynamics and the micro-macro bridge, pp. 52–63 in Eve, R. A., Horsfall, S. and Lee, M. E. (eds.), Chaos, Complexity, and Sociology, Thousand Oaks: Sage. Sperry, Roger W. (1986) ‘Macro- versus micro-determinism’, Philosophy of Science, vol. 53, 265–70. Teller, Paul (1990) ‘What the quantum field is not’, Philosophical Topics, vol. 18, 175–86. Teller, Paul (1995) An Interpretive Introduction to Quantum Field Theory, Princeton: Princeton University Press. Viveiros de Castro, Eduardo Batalha (1998) ‘Cosmological deixis and Amerindian perspectivism’, Journal of the Royal Anthropological Institute, vol. 4, no. 3, 468–88. Viveiros de Castro, Eduardo Batalha (2004) ‘Exchanging perspectives: the transformation of objects into subjects in Amerindian ontologies’, Common Knowledge, vol. 10, no. 3, 463–84. Weiss, Gerald (1972) ‘Campa cosmology’, Ethnology, vol. 11, no. 2, 169–70. Whitehead, Alfred North (1967 [1925]) Science and the Modern World, New York: Free Press.

Part 3

Topics in scientific ontology

3 The nature of the firm and peculiarities of the corporation* †

1 Introduction More than three-quarters of a century after Ronald Coase (1937) first advanced his theory of the firm, economists, legal theorists and others still debate the firm’s nature. Various issues bearing on this persist in being unresolved matters of contention and confusion. Prominent amongst the latter is the matter of whether the firm is a real entity, a collection of phenomena of some sort, a structure of relations or something else. A second issue is the manner, if any, in which the firm can legitimately be characterised as legal in nature. Although many observers accept that the firm has a legal as well as an economic aspect to its constitution, there remains significant confusion over where processes of economic and of legal determination begin and end. A third issue of contention and confusion is the nature of the firm qua limited company or corporation and the meaning of the associated process of incorporation. Is the corporation a mere mental construct, a legal device of some sort or something else? A fourth, albeit related, issue is the meaning of the claim, widely in evidence, that the firm qua corporation is a legal fiction. What precisely does the latter term mean, how does it relate to the notion of an ontological fiction and what does its use, if legitimate, imply for the constitution of the corporation? Is it in fact the case, as some suggest, that a proper use of the category ‘legal fiction’ in the relevant context amounts to the claim that the corporation does not exist at all, at least not as a kind of social entity? A fifth, and also related if seemingly distinct issue is the meaning of the widely observed assertion that the firm qua limited company or corporation is a legal person. Does this entail in particular that such a firm should be conceptualised as an individual with motivations of its own? And so on. These matters, all addressed below, are issues in social ontology, of course. Yet somewhat surprisingly, perhaps, a questioning of the nature of the firm and any addressing of the sorts of issues noted seem mostly to be attended to − albeit usually all too briefly and mostly indirectly1 − by contributors primarily motivated by substantive matters and issues of

86  Topics in scientific ontology social policy; the topic appears rarely to be addressed by those working systematically on social ontology. As a result, any wider results of ontological theorising that bear relevance to the issues before us tend to be neglected. Whatever the reason for this2, here I do approach the topic from the point of view of explicit ontological elaboration, making use of results defended elsewhere (Lawson, 2012 [Chapter 2 above], 2013a, 2013b ­[Chapter 7 below]). My central thesis, developed in due course, is that all social phenomena that we identify are constituted through processes of social positioning (a feature that goes unnoticed in most social theorising). The firm, I will argue, is no exception, albeit an interesting example. I start by briefly outlining aspects of the conception of social ontology defended elsewhere, focusing in the main on features of it that I take to be especially relevant to the task before me, namely that of elaborating the nature of the firm in general and the corporation in particular.

2  The social domain By the ‘social domain’ or ‘social reality’, I understand the set of all phenomena whose existence depends necessarily on human interaction. A key category for the argument that follows is that of ‘emergence’, and in particular the emergence of social totalities. The term ‘emergence’ just means the appearance of novelty or something previously absent or unprecedented. A ‘totality’ is a system of organised, usually more basic and pre-existing, elements that reveals an overall coherence or integrity. Totalities emerge through the relational organisation (perhaps with some modification) of these pre-existing elements, the latter thereby being harnessed and organised as components (some of which will be organised so that they are tied to an environment in some way; emergence always occurs in a context). Clearly, because the relational organisation appears along with any totality, it too is an emergent. In the case of social totalities, the elements so organised either may or may not themselves be socially constituted. Any system or totality that so emerges is, qua an organised system, ­irreducible to the sum total of its components alone, just because it is constituted in part by the manner in which the components are arranged or relationally organised. So, ontological reduction of a disaggregative sort is proscribed. Similarly, any emergent powers of efficient causation of an emergent totality are causally irreducible in the sense of being predictable from the causal powers of these elements when considered apart from the manner of their eventual organisation of components of the totality. So, causal reduction of a simple sort is also proscribed3 (see Lawson, 2013b [Chapter 7 below]). Imagine the bricks, mortar, wood, panes of glass, cement etc. that make up a house or church or dance hall etc. are rearranged in a blind or

The nature of the firm and the corporation  87 random fashion. It is unlikely that the outcome would have either the form or the causal properties of the original building. The arrangement of the parts makes the latter feasible. This arrangement/organisation is a form of ­formal causation. An entity such as a house or a church is, of course, but an artefact and most, or anyway many, fundamental social phenomena are not of this sort. ­ asic form In fact, as I have elsewhere argued at length, a very general and b of social entity or system is the community, with components ­comprising people and artefacts, and its organising relational structure consisting most especially of social positions and associated collective practices ­involving rights and obligations (see Lawson, 2012 [Chapter 2 above], 2015 [Chapter 4 below]).4 Let me briefly elaborate. 2.1  Social positions, rights and obligations By a social position, I mean something such as University Lecturer, Bishop, Bus Driver, Employer, Employee etc. (in the current chapter I adopt the convention of capitalising the position, but not the occupant5). These are positions that individuals enter and, as position occupants, come to ­acquire associated identities. The noted cases provide initial examples of social positioning − a notion that, as noted, is central to all that ­follows (for  an elaboration see, e.g., Lawson, 1994, 1997, 2003, 2012 [­ Chapter  2 above], 2013a). Through being so positioned, individuals gain not only ­positional identities, but also access to rights and obligations, and so collective practices, associated with any position so entered. Thus, an individual appointed to the position of University Lecturer within the UK community acquires the identity of university lecturer and is allowed to follow various practices that are rights of being so positioned. These may include rights of use of university libraries and other research resources, of being paid by the state etc. The individual is also not only allowed, but also expected, to follow various practices; these are the obligations of being so positioned and may include giving lectures and setting and marking exams etc. Where certain positioned individuals have access to a set of rights (and obligations), the latter are matched to the obligations (and rights) of ­others usually positioned differently. The right of a lecturer to use ­various university facilities is matched to the obligations of others differently positioned to fund, maintain and run those facilities etc. Similarly, the obligation of a lecturer to give lectures, for example, is matched to the rights of students to attend lectures. It is the matching of specific rights of some to the obligations of others that constitutes social relations. And it is the sets of positions and associated positional social relations and collective practices that form the structure of human groups, systems or communities. The cement of such groupings consists especially in the human capacities to trust and be

88  Topics in scientific ontology trustworthy. If, typically, individuals either could not be, or were never, trusted to fulfil their positional obligations, society as we know it would fall apart (see Lawson, 2012 [Chapter 2 above]). Here my focus is the community in particular. The latter, to repeat, is a structured social entity that emerges from human interaction and ­ includes human individuals amongst its components. Rarely, if ever, is a community self-standing anymore. Typically, it is contained or nested within others, such as a village (community) within a nation (community). The defining feature of a community is a position that all its members occupy, so that the broadest or most abstract set of rights and obligations is held in common. Almost always there will be differentiations too, but these will be properties of, and sanctioned either within or at the level of, a nesting (rather than a nested) community. Consider a typical academic conference or workshop as an example. At the most abstract level, all participants have the right to attend each (or at least a subset of) session(s), to ask questions, to participate generally etc. Of course, in advance, the organisers may (or may not) decide the list of speakers, chairpersons etc.: there will likely be subgroups with ­specific rights (and obligations) that all attendees are obliged to recognise. A ­subgroup may well indeed constitute a subcommunity within a community. Who is allowed to join a specific subgroup or committee will depend on the decisions of those whose positions afford them the right to decide. This will vary from context to context. A large association may decide who joins a particular subgroup by way of the total membership voting on it. Or a small group of people with access to necessary funding may just decide to organise a conference, appropriating for themselves (as the organisers) whatever rights or privileges they desire. Potential attendees may decide whether to sign up to the conference according to perceptions of the openness (or cliquishness) of the organisers, amongst much else. So the community, the phenomenon that constitutes perhaps the most fundamental social emergent, is highly context dependent in its form and structure, and can be very fluid.

3  Moving towards a conception of a firm: some preliminary issues I am suggesting, then, that social emergence involves the coming into ­being of novel totalities along with their organising structures, where the most general or common form of non-artefactual system or totality is the community. I have elsewhere examined at length the nature of the ­processes whereby this emergence occurs, in relation to both the social and non-social realms (see especially Lawson, 2013b [Chapter 7 below]). My specific contention here is that the firm is itself fundamentally a ­community of some kind, with an equally emergent organising structure amongst its properties.

The nature of the firm and the corporation  89 In moving towards defending this assessment, let me first observe that the term ‘firm’ is widely used as a generic form that covers various ­apparent subtypes. However, if there is contention and looseness over ­interpretations of the nature of the firm (the latter does not, for example, have a legal definition), there appears to be less debate concerning the subtypes that constitute examples. My starting point then will be, as it is in many processes of classification, to examine various (types of) phenomena that observers accept as non-contested examples of the kind, nominally understood. Clearly, though, as all social phenomena are properties of a specific wider community, I must − at least at the outset − focus on examples of such phenomena within a definite wider community and here I focus on the UK. As it happens, most of the features I discuss have counterparts and parallels in most modern capitalist countries; so the UK case can be considered illustrative of a wider picture, at least in broad outline. In the UK, the phenomena that most regularly and frequently answer to the name ‘firm’ are, or include, those more formally known as sole trader, business partnership and limited company. These then are my starting examples. And it is immediately clear that each of these is indeed a form of community. That is, each of these is a coherent totality of sorts, with members, even if these occasionally consist only of directors or company secretaries, organised via positions and associated rights and obligations (which I shall consider in more detail eventually below—see section 5). ­Notice, ­incidentally, that the term ‘sole trader’ does not mean an ­individual ­working alone, but rather a configuration in which a single individual assumes ­responsibility for the business. Often there are ­numerous employees or ‘staff’, but unlike in other business communities, a single individual can appropriate all after-tax business profits (as I say, more details are given below). Clearly, many accounts of the firm are not fundamentally at odds with the assessment I am maintaining; they merely do not spell out (or explicitly recognise) that it is indeed a community that is presupposed as the ­basic unit in their analyses. Rather, from Coase onwards, most contributors on the topic have tended to write in terms of the firm as an organisation, with the organisation often clearly presumed to involve human beings in particular relations. Rarely, though, have contributors explored the nature of their subject at this level. In fact, the reference to the firm as an organisation itself encourages problems, just because the term ‘organisation’, when so used, denotes, for the contributions in questions, both the totality itself and its relational ­(organising) structure. As we have seen, the two − the totality and its organising structure − emerge simultaneously, but are not identical. In social theory more widely, the use of the term ‘organisation’ in this dual manner often leads to the two features (the totality and its relational structure) being conflated, usually with one or the other feature consequently being neglected (see Lawson, 2013b [Chapter 7 below]).

90  Topics in scientific ontology It seems likely that this has occurred specifically in theorising the firm. Thus, in the case where the result is a relative neglect of ­organising ­structure, conceptions prevail of the firm qua totality as 1) analogous to its components (e.g., the firm interpreted as analogous to a human ­individual6); 2) a (mere) collection of its components (e.g., by treating the firm as a collection of individuals or of assets7); or 3) in causal interaction with its components (often described as the process of ‘reconstitutive downward causation’ or simply as ‘downward causation’, as if a totality can somehow act ‘down’ on its own parts as opposed to through them8). Where the conflation (resulting from slippage in use of the term ­‘organisation’) has resulted instead in a neglect of the totality at the expense of structure, a view encouraged is that (an organising) structure can somehow exist without anything actually being organised (e.g., that the firm is somehow a mere nexus of some sort), so that any reference to anything more than structure must be talk of a fiction or some such9. Either sort of conflation is likely encouraged by the limitations of the other, of course. In particular, any conception of a firm as mere organising structure may be a response to the idea that the only entity conception on offer in earlier texts has it that the firm is analogous to a human individual10. Though the latter conception is certainly problematic, conceptual difficulties disappear once we recognise the alternative entity notion defended here, namely that the firm is a form of community. Clearly, all such formulations as those noted, and others like them, are easily identified as untenable once it is recognised that totalities 1) are real, 2) possess equally real organising structures, 3) are formed out of elements that, through being relationally organised, come to form ­components, 4) are irreducible to these latter elements, but 5) are able to act only through the actions of these elements when organised as components (see Lawson, 2012 ­[Chapter 2 above], 2013b [Chapter 7 below]). Other contributions do avoid such conflations, though usually ­without giving much emphasis to these sorts of issues. At least some of these further contributors do explicitly interpret the firm as a community.11 ­However, the contributions in question seem mostly either to use the term ‘community’ without elaboration12 or to interpret a community as a special type of social entity or grouping or ‘organisational form’, ­distinguished by a reliance on either (various) conceptions of trust13 or some other entity-­ delimiting factor14. I am arguing, in contrast, that all social ‘organisational forms’ – ­indeed, all social entities that include human beings as components – are forms/examples of communities; and that all are organised through relations of rights and obligations that rest on the exercise of human capacities of trusting and being trustworthy, so that trust and trustworthiness are necessarily all pervasive and basic15. In short, to repeat, I am using the term ­‘community’ generically as any relationally organised social emergent or ‘organisational form’ that includes human beings amongst its components16.

The nature of the firm and the corporation  91 With all this in mind, then, I turn to my primary questions and concerns. If the firm is a form of community, what precisely is the form (or forms) it takes? Moreover, what is the process whereby a community is constituted as a firm type? For example, can any community acquire the status of firm (or specifically that of sole trader, business partnership or limited company) simply by or through its members declaring it to be a particular type of firm? Or is some more formal process typically involved? I noted earlier that human individuals gain identities (e.g., as lecturers, employers, married partners and presidents) by being appropriately positioned within a specific community. Of course, the individuals so positioned will typically have capacities regarded as appropriate to the relevant positions. Though it is not impossible, it is unlikely that, for example, a non-musician will be positioned as a member of an orchestra etc. I now want to argue that similar considerations underpin processes whereby all social phenomena gain their identities, including artefacts and even communities themselves. In particular, it is through being ­appropriately positioned that a community is constituted as a firm. Let me elaborate.

4  The nature of social phenomena In carving up the non-social realm, appropriately positioned human ­beings determine the basis of any particular kind. Of course, the goal typically is to ‘carve nature at its joints’; but there is no unique way to do this. Once kinds or categories have been determined for the non-social realm, thereafter it is nature, as it were, that decides which of the things around us qualify as tokens or ‘members’. Thus, if human beings decide that anything with a chemical composition of H2O is a given kind called ‘water’, then whether or not various phenomena around constitute examples of water is not a matter that depends on deliberations or assessments; a liquid on my colleague’s desk, for example, is water (or not), independently of what I or others might speculate about its nature17. In carving up the social realm, things are different in that in very many cases at least (and specifically within appropriate given communities), human beings decide both the basis for distinguishing/constituting any kind or type and which phenomena or whatever are allowed to be members. Thus, a specific national community (typically through the actions of a subcommunity of representatives and over time) may decide to accept the types or better positions of University Professor, Gynaecologist, Heart Surgeon, Taxi Driver, Nurse and Prime Minister. But as we have already seen, it is also the community (again, typically through relevant subcommunities of representatives and over time) that decides which of its members or participants are to be allocated to any of these positions. The same is true, I now want to suggest, of the positioning/identification of artefacts and of communities. I focus on the former first.

92  Topics in scientific ontology The role of positioning in the acquisition/allocation of identities is easy to see with objects positioned, for example, as passports and other devices for identifying human beings, or as the accounting devices we call cash, taking the form of notes and coins of certain compositions etc. When, however, artefacts are particularly complicated and designed to perform a single complicated task, it may appear that they take on the relevant identities independently of being positioned in a human system/ community. But ultimately, this is not so. If, for example, an object manufactured to be positioned as a photocopier is washed up on an isolated island and some exotic tribe that inhabits the island (and which perhaps lacks a concept of electricity) positions the object in question as a table, then in this particular community, a table is what it is. (Similarly, human individuals may spend the entirety of their formative years training to be a professor, prime minister, opera singer, professional cricketer, Olympic skier or whatever; but unless or until they are appropriately positioned, they do not take on the status of a member of that position or kind.) I am going to argue that in a similar fashion, a community takes on the identity of a firm by being appropriately positioned. However, there is an interesting complication, it will be seen, with the positioning of a community as a limited company or corporation. Notice first that when an artefact is positioned as, for example, a traffic beacon, car park or identity card, certain of its capacities become interpreted as its (positional) functions within and relative to the system in which they are positioned, and their use in this is governed by rights and obligations that fall on wider community participants. However, when a human individual is positioned as, for example, a judge or prison officer, it is the positioned individual herself or himself that becomes the bearer or agent of novel positional powers and specifically rights and obligations. Of course, the latter positions are also in place in order that certain p ­ erceived needs of the incorporating system can be met. So the positioning of human beings is also functional. However, in this case of human positioning it is primarily the case that the organising rights and obligations are accessed by those that are positioned. The obvious question to raise of a community that becomes positioned as a firm, then, is whether capacities possessed get to serve as its functions by way of the exercising of rights and obligations that fall on individual participants within the firm and the wider community, or whether it is the firm itself, qua positioned community, that somehow acquires and exercises rights and obligations in the manner of a positioned human being. To give a brief overview of the thesis to be defended below I will be suggesting that in some cases it is the former, but in others it is actually the latter. The former obtains where a community, at least in the UK at the time I am writing, is positioned (or registered, in particular for tax purposes) as an ‘ordinary’ firm in the sense of a sole trader or a business partnership, but the latter holds where instead a community is positioned (or incorporated) as a

The nature of the firm and the corporation  93 company (in the UK, or as corporation in the US). In this case the ­community qua a firm acquires positional rights and obligations just as a (positioned) human individual might. Indeed, in being so positioned the firm is said to acquire the status of a legal person (a notion I elaborate on below). I believe this assessment, which here I am merely summarising and foregrounding (involving a distinction between types of positioning), to be novel. I also suspect that it is a failure to focus on processes of social positioning, and so to distinguish the two separate forms, that accounts for much of the confusion that continues to characterise the economic and legalistic discussion and debate over the nature of the firm. Let me then elaborate on and defend the assessment of these last few paragraphs. I will first advance a formulation that I take to express a ­sustainable conception of the nature of the firm in general. Eventually I will focus on the specific nature of the limited company or ‘corporation’.

5  A conception of the firm As already noted, in the UK those entities that seem most regularly to answer to the name ‘firm’ are, or include, communities more formally known as sole trader, business partnership and limited company. So let me assess the features of these that might be essential to a kind made up out of them, one we might call a firm. In due course, I want to suggest that as well as commonalities, there are essential differences here − in particular, between the sole trader and business partnership on the one hand and the limited company on the other (turning on a process of incorporation, elaborated on below − see section 6). But for now, rather than draw a distinction between types of firm, I focus on that which holds between the firm and non-firm. If the focus then is on the sole trader, business partnership and limited company, the following, it seems to me, are the commonalities. Each, as noted, is a type of community and the commonalities relate to conditions to be satisfied in order to become a token or member of the relevant firm type. There are essentially three such conditions or requirements currently in the UK. First, for a particular community to qualify as one of these entities, it has to be appropriately legally positioned or registered. Second, in order to qualify for registration, the particular community has to possess a legal structure associated with one of these positions. Third, all such legal structures presuppose a conception of the set of capacities of the community that any would-be firm must possess and which, on positioning, are to constitute the community’s characteristic function. Let me consider each requirement in turn. 5.1  The requirement of positioning I have argued that for a specific social phenomenon or entity to be constituted as an example of a particular type, the wider or national community

94  Topics in scientific ontology in which the phenomenon emerges must, through its subcommittees, both delineate the bases of different positions and allocate the entity to one of those positions. It involves processes of 1) position constitution and 2) positional allocation of phenomena. This is indeed the case when firms are created, and in the UK, currently, access to any one of the three noted positions is achieved via a process of legal registration: with Her Majesty’s Revenue and Customs (HMRC) in the case of the first two and with Companies House in the case of the limited company. This is the process of acceptance (by an agent of the legal community on behalf of the wider national community) of the (sub) community in focus as a firm18. On being so positioned, the (sub)community in question thereby gains the identity of occupant of the social position Sole Trader or Business Partnership or Limited Company − more briefly, it is constituted as a sole trader or business partnership or limited company − and, if amongst other things (more is involved, especially in the case of the limited company − see section 6 below), has certain of its causal capacities interpreted as its positional function set. In each such case, to repeat, the (sub)community in question is constituted as a firm19. 5.2  The requirement of an appropriate legal structure If being so positioned or registered is sufficient for a community to be constituted a sole trader, business partnership etc., a current requirement it must first satisfy in order to be so positioned is that it possess an appropriate legal structure. By the term ‘structure’ here, I include a ­community-specific set of positions and their organising sets of rights, obligations and collective practices (which will determine the control of, and access to, specific sets of assets etc.). Any such structure, of course, is contingent and the range of feasible appropriate structures will vary over time. Mostly, though, such structures relate to the rights and obligations of community members with regard to receipts of profits, payment of taxes etc., and so are constitutive features of the entities in question. I have already noted that the position of Sole Trader is not restricted to individuals working alone, but rather is open to organisations in which one person alone is responsible for the business. This person is i­ nterpreted as ‘running’ this business as an individual. As might be expected in any community where one individual assumes responsibility, that individual can decide alone the manner of use of (including whether to keep all) the business’s ‘profits’, albeit after meeting all tax obligations (the latter include sending a self-assessment tax return each year to HMRC, paying income tax on profits and National Insurance and registering the business for value added tax if annual revenue is expected to be above a certain amount). Equally, this single individual must assume responsibility for meeting any losses the business makes, paying bills for things bought for

The nature of the firm and the corporation  95 the business, such as stock or equipment, and keeping records of the business’s sales and expenditure. The legal structure associated with the position of (ordinary) Business Partnership is constituted along similar lines to that of Sole Trader, except that with each instance it is a group of individuals or ‘partners’ who together share responsibility for a business. As might be expected of any community where responsibility is shared, the business’s profits can be divided between the partners with each paying tax on her or his share. Each partner is additionally personally responsible for a share of any losses the business makes, as well as for a share of the bills for things purchased for the business, such as stock or equipment. (Incidentally, a partner does not have to be an actual person; because a limited company counts as a ‘legal person’, it can also be a partner in a partnership − a matter I eventually get to in section 6.3 below.) The legal structure associated with the position of Limited Company is more complex. Amongst other things, it is necessary for a firm or community to nominate or appoint directors who may and often do run the company20. Each company is also required, currently, to have at least one shareholder (or two for a public company) and each would-be company has to submit a ‘statement of capital’ indicating the number of shares the company has issued and their total value (known as the company’s ‘share capital’), along with the names and addresses of all shareholders (known as ‘subscribers’ or ‘members’). It is sometimes supposed that where a ­company comes into being, the shareholders are its owners; though with a company being ultimately a (positioned) community, of which the shareholders are ‘members’, this supposition seems dubious and ­unhelpful at best (depending on the interpretation of ownership; see section 7 b ­ elow), albeit the shareholders certainly have powers to vote and to agree on changes to any company. It is probably best to think of shareholders as owning instead a certificate (or possibly being merely in receipt of an email confirmation of purchase of shares) that entitles them to certain returns from the company. I will discuss the meaning of ‘limited liability’ in due course. For now, I merely note that before a would-be firm can register as a limited company, it is the case that − as for sole trader and business partnership − a legally specified structure is required. 5.3  The requirement of capacity to perform the accepted function Third, and finally, an examination of the requirements in terms of l­ egal structures associated with the various positions in question reveals that a general economic orientation is presupposed (and in that sense ­required or expected) in each case. Specifically, it is presumed (especially in the various rules concerning how profits can be distributed and are to be taxed) that the community has the capacity for, and is concerned with,

96  Topics in scientific ontology the coordinated production of goods and/or services to be sold to others, in a way that is intended to be advantageous to (at least some of) the ­community members, with (at least some of) that advantage interpreted as ‘profits’. This economic function of the firm is also clear from a consideration of regulations governing exceptions to the noted requirement of registering; the latter being communities that organise for collectively coordinated ­activities that do not include profit seeking. These do not need to be so registered as a type of business. Rather, they are referred to as ‘unincorporated associations’ and constitute organisations set up through an agreement between a group of people who come together for a reason other than the pursuit of profit – for example, as a voluntary group or a sports club. In such cases it does not cost anything to set one up and individual members are personally responsible for any debts and contractual obligations. This is not a legal structure and indeed any such association is not actually recognised as such by the law. This is not a firm (though see the discussion under ‘qualifications’ in section 5.4). In short, when a community becomes registered as a sole trader, business partnership or limited company, the capacity that becomes interpreted as its positional function set (i.e., function set qua firm) is precisely the coordinated production of goods and services to be sold to others, in a way that is intended to be advantageous to (at least some of) the community members, with (at least some of) that advantage interpreted as ‘profits’. In being so constituted, the community is in effect being placed as a recognised component of the industrial structure of the community as a whole. Its intended positional function, to repeat, is profitably to provide goods and services to others. So a firm, at least in the common forms of sole trader, (ordinary) business partnership and limited company, is legally constituted21. There is no conflict of economic and legal conception. This is because the community is organised with the intent of achieving an economic goal and the legal system determines the sorts of structures to which any such community, or rather its members, must conform if the community itself is to be ­accepted (positioned) as a firm by the wider (typically national) community that the legal system serves and of which it is, in turn, a particular subcommunity. 5.4 Qualifications It is important that I now briefly qualify the picture given or at least add some possible caveats. My focus, in considering the registration of the three types of firm, has been current UK tax law. A first point to make is that UK tax law has not always operated in the manner described. For example, it is only relatively recently that a sole trader has been required to register for tax purposes in the UK and there are countries where this is

The nature of the firm and the corporation  97 not the case. But there are always processes whereby any wider community accepts (or not) a specific subcommunity as a specific firm type, for example as a sole trader, whatever the context. The point then is that the process of positioning is always context dependent. As it happens, currently in the UK, a sole trader, like a business partnership and a limited company, is legally constituted through tax law. Second, although the focus on tax law is sufficient to establish that ­currently in the UK, the firm in the shape of the sole trader, business partnership or limited liability company is legally constituted, I do not want to suggest that other forms of law − for example, company law, employment law and general private (contract and property law) − do not condition the structuring of the firm and affect its behaviour. It is important, though, to distinguish law that conditions all communities, individuals or forms of social relations and those that bear specifically on forms of firm. In the UK, partnership law provides a set of default terms for partnerships and company law does the same for companies. In a sense, all such factors can bear on the structuring and practices of the firm. The unincorporated association is also legally structured in this sense – for example, by trust law or commercial law and specifically the law of agency. But these factors need not bear on the question of whether the entity in question is constituted as a type of firm (as opposed, say, to matters of its regulation once it is constituted as a firm)22. However that may be, the firm has a legal constitution via tax law at least. It is the latter that is directly involved both in positioning a community as a type of firm and in determining the basic legal structure necessary for it to conform to a sole trader, partnership or limited company23. A third qualification turns on the use of the category of ‘firm’ itself and on my assertion above that the ‘unincorporated association’ (i.e.,  a  ­community that organises for collectively coordinated activities that do not include profit seeking) is not a firm. Of course, if an opponent of the view I am defending − perhaps pointing to the fact that in the past, manufacturing companies often took the form of unincorporated associations − insists that such associations also qualify as firms, the latter is not an assertion I can refute on empirical grounds; the issue rather is one of how to best to assign or allocate categories. Clearly, though, if the term ‘firm’ is used to cover unincorporated associations and perhaps other communities, the outline above, which is already fairly abstract, would have to become far more so. Instead of identifying the firm in the manner outlined above as being legally positioned, legally structured and possessing the noted ­economic function, we could say of any firm only that it had been 1) appropriately positioned according to wider-community collective ­practices; 2) appropriately structured; and thereby 3) organised collectively to achieve some particular function. In this scenario the sort of entity I have been outlining might then merely be termed a for-profit or possibly a business firm.

98  Topics in scientific ontology In the absence of any collective agreement on the use of the category, the taxonomic strategy is a matter of choice. Many and seemingly most accounts, though, clearly do restrict the term ‘firm’ to cover for-profit entities only, whatever considerations may otherwise differentiate them, and I shall adopt this convention hereafter; though I acknowledge that there are other imaginable terminological strategies available. I might add at this point that terminological complications do not stop with the category of ‘firm’. I am about to embark upon a discussion of certain peculiarities of the limited company. The fundamental process to be examined here is that of incorporation, the latter being a notion I elaborate on below. For consistency with the discussion so far, I will follow the official UK usage of terms and so I shall refer to a firm that has been incorporated precisely as a (limited) company. It will be seen, however, that the process of incorporation is not restricted to firms as understood here, not all companies are for-profit, and in the UK the generic term for anything incorporated is the ‘corporation’ (thus in the UK the term ‘corporation’ also covers non-profit-making communities such as the City of London Corporation). I note as well that in US terminology, one that is adopted by many academic contributors, the term ‘corporation’ is used approximately in the manner that the term ‘company’ is used in the UK − whereas in the US, the term ‘company’ means more or less any (organised) community. Hopefully, my usage of categories will be clear from context. However, one feature I will consistently maintain is that all usages of ‘company’ and ‘corporation’ will be for entities that have been i­ ncorporated (a process that, as I say, I will describe below). Thus, I will also sometimes refer to a company as a firm qua company or as a firm qua company/corporation. This will be to distinguish such a firm from an unincorporated firm. For the latter, the adjective ‘ordinary’ will sometimes be used, as in ‘ordinary firm’, ‘ordinary business enterprise’ or ‘firm qua ordinary business’ etc. Before I turn to such matters, it is worth noting that the analysis of the nature of the firm so far laid out has been achieved without necessary reference to processes of incorporation or related ideas (as we will find them to be) of legal fictions, legal persons etc. The specific firm type of limited company, it will be seen, is indeed a form of incorporated firm. But in setting out how it is most basically constituted as both an economic and legal entity, the process has not been found to be different in relevant respects to those of other (unincorporated) ordinary business enterprises discussed. In short, in all cases it depends on appropriate community positioning. In other words, in all cases the firm, given the coverage of the latter term accepted here, can be understood as follows: The (modern) firm is simply a specific community, currently legally positioned, that is formally registered, within the wider, typically national (or international), community, as an emergent subcommunity of the latter, oriented to the collectively coordinated production of goods and/ or services to be sold to others, in a

The nature of the firm and the corporation  99 way that is intended to be advantageous to (at least some of) the community members. It is normally the case that (at least some of) that advantage is interpreted as ‘profit’. Of course, and as already noted − and even accepting the noted c­ aveats and qualifications − this formulation remains somewhat abstract. A feature that is concealed by this conception is the manner in which the goods and/or services (to be sold to others) are produced. This turns on the specific inner constitution or relational structures whereby the community is organised in pursuing this end. Under modern capitalism, such relational structures take various forms, mostly working to allow certain advantageously positioned individuals to benefit significantly at the expense of others24. Even so, there is no a priori reason that a firm is always so structured, at least internally, especially where it is family based or a cooperative etc. The point is that, however the community is structured in detail, any structure that allows the community to meet the conditions of the displayed paragraph above will constitute a firm in the UK, so I take the above-noted conditions, though warranting supplementation to characterise any specific firm, to be sufficient to distinguish any community as a firm. Although this conception has been arrived at without explicit reference to any process of incorporation (even though the latter is essential to the constitution of a limited company as a type of firm), it is necessary now to turn to the latter process. After all, most modern firms are incorporated as companies. Moreover, the idea of incorporation, if fundamental to developments in the modern capitalist world, appears regularly to give rise to contrasting conceptions or interpretations of the mechanisms in place. So I now turn to consider the process of incorporation systematically and at some length, and thereby finally seek to identify the relevant peculiarities of the limited company/corporation. To this point, I have been concerned to distinguish the firm from the non-firm. From here onwards, as I say, I am concerned to distinguish the incorporated firm (qua company) from the unincorporated one.

6  The company/corporation What, then, is going on when a firm is incorporated as a company, and in particular a limited company? Further, how is it possible to make sense of the widespread talk of such companies being (legal) fictions or ­(analogous to) real persons etc? I think the ontological conception elaborated on helps us systematically to sort through some of these issues. A preliminary point to make is that because any firm is a real community, it is evident that through its undergoing a process of incorporation, whatever may be involved, the firm, now taking the status of a (limited) company, will not be somehow rendered thereby an ontological fiction or non-existent as an entity. Nor, of course, will it be a human person. So why

100  Topics in scientific ontology is it the case that the company is so frequently represented using the noted terms? What really is the nature of the company – that is, the incorporated firm, the firm qua corporation? Briefly, before I answer this set of questions, I note as a second ­preliminary observation that the position of (Limited) Company is available not merely to new ‘start-ups’; certain communities already (legally) ­positioned/constituted as firms, for example as business partnerships, also have the option to incorporate as companies. So, to repeat an observation of the previous section, something is involved over and above the mere establishment of a type of firm. The separate conceptual steps that are implicated are somewhat masked by the fact that a firm may indeed also come into being directly in the form of a company, having never been unincorporated. My claim here, though, is that conceptually two separate processes are always involved; albeit that in the just noted case, where a firm starts out as incorporated, these two processes are being combined so as to appear legalistically as one. This is a claim I need to elaborate. 6.1  Multiple positioning Fundamental to understanding the nature of the incorporated firm here is the idea of double or indeed multiple social positioning. For purposes of illustration, consider first the example of positioning of a single human individual. One and the same person may be positioned simultaneously in somewhat separate communities, as for example a father, a doctor, organiser of a local dance club, member of a reading group etc. This can be called multiple horizontal positioning because the positions are merely different. But any given individual can also be multiply vertically positioned, as when each of a set of positions is nested in, and/or nests, others of the set. Thus, a particular individual may be a gendered woman, a citizen of the UK, a Member of Parliament in the UK, a member of the UK shadow cabinet (e.g., as the UK Shadow Foreign Secretary) etc. In this case an individual does not so much join separate communities as move into ever more nested subcommunities of one already occupied (with advancement up a status hierarchy). So once a gendered woman who was born outside the UK is accepted as a UK citizen, she may stand for Parliament, and if elected then be appointed to the shadow cabinet and so on. Similarly, an artefact may be multiply horizontally positioned in various systems. For example, a computer may be positioned as a timekeeper, a mailer, a component of a music system or a filing system etc. Or an artefact can also be multiply vertically positioned in various systems. For example, an item of clothing of certain colour and constitution may serve as a football shirt to be worn to protect the wearer from the elements when playing the game; as an identifier at the team level (when each member wears the shirt, to help other team members and fans to quickly

The nature of the firm and the corporation  101 recognise which side the player is on); as club merchandise (to be sold to fans worldwide); as an advertising device for the club’s sponsors etc. Each of the later-mentioned system functions presupposes those that were already identified. Notice that when an artefact becomes multiply positioned, it in effect accumulates additional characteristic functions, as a different set of its intrinsic capacities becomes interpreted as a characteristic function set relative to each novel layer of positioning. Thus, in the noted case of the shirt, the characteristic functions that so accumulate include serving to protect from the elements, serving to identify team membership, serving as club merchandise etc. Significantly, such developments go hand in hand with, and depend upon, additional sets of associated rights and obligations (arising with the additional rounds of positioning) falling on wider members of the communities. When, in contrast, a human being is multiply positioned, the point is that he or she too serves an increasing number of system functions, but the latter are primarily served by way of this (multiply positioned) individual herself or himself acquiring additional sets of facilitating (positional) rights and obligations. Thus, when a human being is multiply vertically positioned, and in particular moves into ever more nested positions, say is positioned as a UK citizen and then enters Parliament and eventually the shadow cabinet etc., he or she acquires an additional set of rights and obligations with each ‘advance’, each bearing on the ways he or she is able and expected thereafter to function. I now want to suggest that the registration of a community as a (limited) company constitutes an example of multiple vertical positioning applied to a community in question, but that the process is in a certain sense a hybrid of those that are involved with the positioning of artefacts and human individuals. Let me once more briefly elaborate. 6.2  Multiple vertical positioning of the firm In what sense is the process whereby a corporation is constituted a hybrid of those just considered? Consider the case of a community that is initially positioned as an ‘ordinary’ or unincorporated firm. Here, as we have seen, the rights and obligations involved in constituting the firm fall on relevant individuals within or interacting with it. However, if the same community, already positioned as an ‘ordinary’ firm, is further (following a degree of structural/legalistic transformation) positioned as a limited company or commercial corporation, additional rights and obligations are involved, but in the main are acquired not by individuals involved with the firm, but by the community qua firm itself. That is, through a process of additional positioning, one known as incorporation, the firm itself acquires particular rights and obligations just as in

102  Topics in scientific ontology the case when it is a human being that is being positioned. Modern companies, for example, have the right to own various assets (e.g., real estate, shares, cars and boats), make contracts, sue etc., and obligations entailing that they can be sued etc. It is in this sense that it is coherent to talk of the firm positioned as a company as acquiring legal personhood or indeed positioned as a legal person. The hybrid nature of this double positioning – first in a manner paralleling the positioning of an artefact in a community, then in a manner paralleling the positioning of a human individual – tends, however, to be masked by the fact that some firms start up as limited companies and so do not appear to undertake processes of double/multiple positioning. But in truth they do, albeit in one go, by entering a position of Limited Company that is already nested inside another position, namely that of Legal Person. Actually, it is nested first in the position Juridical Person, which, I will suggest, is in turn nested within (though it is sometimes interpreted as equivalent to) that of Legal Person. To see that this is so, and to understand all that is really going on here, it is necessary at this point to take a slight detour beyond the focus on the company per se. 6.3  Legal fictions and legal persons In fact, at this stage of the analysis, it is necessary to consider the meaning of the notion of legal fiction encountered earlier. I have already suggested that various commentators associate the idea of a legal fiction with a firm or an ‘organisation’, and in doing so view, or encourage interpretations of, the latter as an ontological fiction, as not a real entity at all but a mere construct that can in effect be dispensed with. I want to suggest that this form of reasoning is quite misleading. The first point to make is that the expression ‘legal fiction’ is a legal term of art, with application far wider than discussions of the company; it is not just a loose expression applied to portrayals of the incorporated firms as somehow acting like humans. Nor does use of the term amount to a way of pointing to other terms or categories that have no referents. Rather, it is basically a false claim about a pertaining situation to which the legal process resorts for purposes of adjusting the incidence of a pre-existing (set of) rule(s). If we think of all legal rules in a specific community as applying to a given set of situations, then it is possible in law to extend the application of legal rules to an additional set of situations in that same community by misrepresenting these additional situations as conforming to those of the set for which the legal rule was originally intended, even though in reality they do not. The misrepresentation of the facts of these situations in order that a pre-existing rule can be applied to them is known as a legal fiction25.

The nature of the firm and the corporation  103 Typically, and certainly of most interest from perspective of the ­ ositional framework that I have been defending, a legal fiction involves p some authority (in the UK, the courts, Parliament or [formerly] the Crown) making a false claim about a pertaining situation to allow various individuals to access certain sets of rights and obligations where these were not originally intended for these individuals. The mechanism whereby this works is usually the creation of a legal position or status and the association with it of various rights and obligations originally designed or intended for quite different positions and their occupants. A familiar example, certainly in the UK, is the creation of the positions of Adoptive Parent and Adopted Child. The allocation of biologically unrelated persons to these positions amounts to the legal fiction that the individuals in question are – that is, that they qualify (in law) as – parents and offspring. It is a legal fiction designed to enable certain non-­biologically related adults and children to gain access to the same (legally bestowed) rights and obligations available for the benefit of those that are biologically related. Notice that there is no ontological fiction involved here − merely a legal positioning of certain individuals as something which, without a legal interpretation, they are clearly seen not to be, in order that some outcome be achieved that could not easily be so otherwise; and specifically, that rights and obligations be made available to parties for whom, in their design, they were never intended. In such cases there is always something or someone real that is repositioned. In being repositioned, that something or person is not somehow rendered a fiction. To repeat, a legal fiction merely refers to a legal misrepresentation of a situation in order to allow the application of a legal rule (in particular regarding rights and obligations) to a case for which it was not originally designed or intended to cover. As it is with the process of positioning human individuals as ­adoptive parents and adopted children, so it is with the process of incorporating communities as companies. The legal fiction here is that a firm is − that is, counts in law as − a person. The mechanism is that the firm is ­positioned as a legal person − that is, is allocated to the position of Legal ­Person, ­providing the firm in question with the right to access more specific (sets of) rights and obligations that in their design were intended only for ­(certain groups) of human beings. It is not only firms that can be so treated, though. Nor is the positioning of non-humans as legally persons a recent development. An early example is associated with Pope Innocent IV (1195–1254), who used this sort of device to separate the rights and obligations of monks (who could own nothing, but could be sued for legal wrongdoings) from those of their monastery (which as a legal person could own assets, but as a non-real person lacked a soul and could not therefore be negligent or excommunicated).

104  Topics in scientific ontology However, in modern times, it is in effect through the positioning of a firm as legal person that it becomes incorporated. It thereby acquires the right to acquire additional rights and obligations, which from time to time are determined by the courts or Parliament. 6.4  Natural Persons and Juridical Persons It follows that in law, there are in effect two categories or positions whereby the occupants qualify for legally bestowed rights and obligations, the one containing human individuals and the other containing non-human entities. In giving names to these categories and so the associated positions, there is once more, however, a terminological difficulty with which to contend. The precise term most frequently used for the legal position in which a firm is situated to qualify for rights and obligations is that of Juridical ­Person; and this is distinguished from Natural Person, which is intended only for (some) human beings. On certain accounts, Legal Person is an overriding idea or position containing Natural Person and Juridical Person as two nested positions. The foregoing represents the terminological convention I shall adopt. However, on other interpretations, Juridical Person and Legal Person are the same thing, to be contrasted with Natural Person. Yet further interpretations exist. Which terminological option is adopted does not really matter, however, so long as it is recognised that in law there is a position to be occupied only by human beings and another that can be occupied by non-human beings, where both positions facilitate the allocation of certain rights and obligations. It is important to note, though, that the ascription of rights and obligations is in both cases a legal affair. That is why I persevere with the category Legal Person as denoting the more general or encompassing position with those of Natural Person, for human beings, and Juridical Person, for non-humans, nested within it. On this conception, to be a legal person, sometimes phrased as having a ‘legal personality’, means, as noted and strictly speaking, to be capable of having or gaining access to legal rights and duties within a certain ­legal system. Legal personality is thus a prerequisite to possessing various specific rights and obligations. More formally, it is a prerequisite to legal capacity − a term that expresses the rights and obligations that the entity in question can acquire and exercise within the framework of the legal system26. Whatever the precise terminology adopted, it is clear that the outcome achieved through incorporation is the acquisition of sets of rights and obligations by the community qua firm as a totality. In this way, a company per se, as earlier noted, can acquire certain specific sets of rights and obligations, such as those of owning assets (houses, boats, shares etc.), contracting, suing, being sued etc. As a result, there is a separation between

The nature of the firm and the corporation  105 those rights and obligations that accrue to individual members of, or ­participants in, the community now incorporated as a company and those that accrue to the company itself viewed as a legal person. What then is the advantage of this separation, deriving from granting a company per se the right to acquire the noted rights and obligations? Essentially, if somewhat abstractly, it is to allow both the firm as a whole and the individual members to be protected from the misdemeanours, financial failures and particular limitations (humans die and pay death duties, but companies might last for centuries) of the other. With incorporation, a company issues shares. The most common form of company is a private company limited by shares27. This is an ­(incorporated) company whereby, in the face of financial problems, any shareholder’s liability is limited to the original value of the shares issued but not paid for. Thus, suppose a particular shareholder has, for example, 1,000 shares in a limited company, each originally valued at £1. If the company fails and at the time the company fails this individual shareholder has paid for 100 of these shares, it means that he or she is liable only up to the original value of shares yet to be paid for, namely £900. Importantly, the shareholder is not liable for the full loss of the company where the latter exceeds the shareholder investment. So in a company, shareholders, directors and officers typically are not liable for most of the company’s debts and obligations. Rather, any debts run up by the firm qua company are rationalised as those of the company, not of the shareholders. For this reason, a company tends to be referred to as a business with limited liability, noting that it is the shareholder, not the company per se, that has limited liability28. In comparison, in the case of an unincorporated business, the sole proprietor or general partners in a partnership etc. are personally or jointly responsible for all the liabilities of the business, such as loans, accounts payable, legal judgments etc. In similar fashion, because the incorporated company is considered a legally separate entity, it and its assets are protected from the misdemeanours of individual members of the community and in particular the shareholders. Where a shareholder is personally involved in a lawsuit or bankruptcy etc., a creditor of this shareholder cannot seize the assets of the company. Or rather, the creditor can seize shares in the company only insofar as they are considered a personal asset of the shareholder in ­question. This is known (not as limited liability for the company, but) as asset partitioning. It follows as a further benefit of incorporation that ‘ownership’ claims (whatever their actual status) on a business are more easily transferred to others. Where a firm is unincorporated, the process of selling or giving away ownership claims can involve a complex process wherein property is retitled, new deeds are drawn and other administrative chores need to be undertaken. In the case of a company, all of the owners’ rights and

106  Topics in scientific ontology privileges are represented by the shares of stock they hold, which can be easily and quickly transferred, usually merely through adding a signature. In turn, the ease of transferability of shares, along with limited liability, makes incorporation attractive to new ‘investors’. And of course, as ­incorporation renders a business a legally constituted component in a wider legally constituted totality, it provides access to a reliable body of legal precedent to guide owners and managers in their conduct. There are then various perceived advantages of incorporation. These, along with the widespread current acceptance of the factors involved, encourage an impression that the limited liability company is a natural feature of the social landscape. Indeed, the notion that more or less any firm or would-be firm can be incorporated as a limited company is currently somewhat taken for granted. It is worth recalling, however, that even following the introduction of the idea of legal personhood into the UK, the path leading to the current situation has been anything but smooth. Contestation has long raged over the types of communities that could be positioned as legal persons, over the specific rights and obligations that could be acquired for those that were so positioned, as well as over which bodies were to make any relevant decisions regarding the accessing of such rights and obligations. In particular, from the outset and regularly since, the idea of granting legal person status to profit-seeking communities has been severely resisted. A brief consideration of these matters is likely useful in conveying how the current components of the process of incorporation were never a natural unity. 6.5  The origins of the modern company Prior to the seventeenth century, the only communities in the UK that were positioned as legal persons and so qualified as corporations were not-forprofit entities;29 they comprised charities such as schools, universities, hospitals, churches etc. and eventually municipal councils. As such, these corporations had various rights, such as owning buildings, land etc. Notably, each also possessed constitutions drafted and approved by the Crown or the government, which set out their rights and obligations along with the objects the corporation sought to attain. If a corporation acted inconsistently with its constitution − that is, if it acted ultra vires or beyond its legal ­powers − the courts had the power to declare the offending actions void and unlawful. During this time, for any such charitable community to undertake commercial activities in order to make a profit was clearly ultra vires. It is interesting to note, then, that when the UK’s first profit-seeking corporation, the English East India Company, obtained that status in the early seventeenth century, it did so in a manner that was seemingly u ­ nlawful30: it came to occupy the position of Corporation not via any action of the Crown, government or the courts, but through the actions solely of its members. Let me briefly explain.

The nature of the firm and the corporation  107 Towards the end of the sixteenth century, the Crown granted charters of incorporation to ‘trade associations’. These thereby became non-forprofit corporations. They did not carry out trade in their own names, but were granted a monopoly over a specified area of trade. Business partners could become members of the trade association and were thereby entitled to carry out business in that trade. However, for any such partnership, the firm would trade separately, with its partners sharing ownership of the firm’s assets as well as responsibility for its activities. The English East India Company started as one such trade association. It received its royal charter in 1600, enabling its members to share in the monopoly on trade in the East Indies for the next 15 years. In the period that followed, however, the individual member/partners took a highly significant series of actions. First, they started to amalgamate their stock until they became one large partnership, jointly owning all the stock and carrying out all the trade. Later, the ownership of this stock was transferred to the company itself (which, being a corporation, was allowed to own assets). In place of their shared ownership of the stock of a business partnership, each partner acquired a share in the joint stock of the corporation itself. The corporation subsequently traded this stock in its own name and made its own profit, which was then distributed amongst the members/shareholders. In this way, the English East India Company became the first UK corporation to operate for a profit (on all of this, see Lawson, 2015 [Chapter 4 below]). Although in all this the members of the company were acting in a ­manner that was almost undoubtedly ultra vires, these actions went unchallenged in the courts and elsewhere. To the contrary, up until the ­Bubble Act of 1720, the Crown, on observing the apparent successes of the English East India Company, began to grant charters to new companies expressly for them to trade as commercial corporations. Eventually, new commercial corporations were formed by both royal charter and Act of Parliament to develop new patents and domestic trade, by this time seeking outside investors to provide the finance31. However, by the start of the eighteenth century highly suspect corporations were being unmasked, with individuals masquerading as commercial corporations to fraudulently seek out investors’ funds. In addition, the South Sea Bubble and other financial scandals of that time caused further losses to investors. But with corporations bearing the responsibility (rather than shareholders), the victims could not easily get recompense; nor could the courts penalise them (e.g., as corporations could not be imprisoned). So the government felt a need to rein them in. Many were wound up or nationalised. And the Bubble Act of 1720 legislated that all commercial undertakings (not just in corporations) would be illegal that tended ‘to the common grievance, prejudice and inconvenience of His Majesty’s subjects’. The law also banned speculative buying and selling of shares; they could be bought only by persons genuinely taking over a role in running a firm.

108  Topics in scientific ontology Everything changed again between 1825 and 1856, however, as a series of Acts of Parliament relaxed the controls on the creation of commercial corporations. It was during this period that the idea of limited liability became established32. The primary reason for the change was the building of the railways, requiring large agglomerations of capital. The way of achieving this was through chartered joint stock companies. By 1840, 2,000 miles of railway track had been laid, all financed by chartered joint stock companies (Micklethwait and Wooldridge, 2003, p. 47). Even so, late into the nineteenth century, the courts were still reluctant to give shareholders the full benefits of limited liability or indeed to fully recognise that profit-seeking corporations had separate legal personality; and they made it clear in a series of rulings that in their view, the courts controlled corporate behaviour. However, developments were never smooth and there were a number of successful challenges to court rulings33. Despite this, the courts continued to maintain the doctrine of ultra vires, in effect restricting how a commercial corporation pursued its activities. Only with the Companies Act of 1989 was this action by the courts effectively brought to an end34. So, in short, over the course of 400 years, the state − which at first was opposed to granting corporate status to profit-seeking communities − has long sought to impose, but ultimately given up on all of, many devices and mechanisms designed to restrict corporate activity where the latter was perceived to be at odds with the public interest. If in the current situation the notion of the for-profit company or corporation is taken for granted, this is not the way matters have been for the most part of corporate history. Today, however, the incorporated for-profit community, the company, is a widely accepted and indeed dominant part of the social scene, with the consequence that, as we have observed, the manner in which a firm is incorporated parallels the sort of manner in which a community is established as an unincorporated firm. In all such cases an entity must merely be appropriately registered, where this in turn requires that it possess an appropriate legal structure and a specific set of economic capacities that ground its primary function set. The simple process of registration that is involved in the case of the ­corporation (which procures a Certificate of Incorporation displaying the company number and date of formation, thereby confirming that the  ­company legally exists) is one that has been in place since the 1844 Joint Stock Companies Act; though, to repeat, the ease, and powers, with which a community or firm can now incorporate stand in contrast to the situation when it was first introduced. 6.6 Summary To take stock, the picture that emerges of the firm and specifically of the company, at least within the UK, is as follows. The firm is any emergent

The nature of the firm and the corporation  109 community that the wider UK community, through its relevant legal ­subcommunities, accepts as a member/occupant of the social position of Sole Trader or Business Partnership or Limited Company. In this way the particular community in question is accepted as possessing the identity of being a member/occupant of the relevant social position, with a set of its intrinsic capacities interpreted as its associated function set. The capacities so interpreted are those that bear upon the coordinated production of goods and services to be sold to others, in a way that is intended to be advantageous to (at least some of) the community members, with (at least some of) that advantage interpreted as ‘profits’. A company, more specifically, is any community qua firm that the wider UK community, through its legal subcommunities, accepts as a member/occupant of the social position of Limited Company. In this way the ­specific community in question is accepted as possessing the identity of being a member/occupant of the social position of Limited Company, and thereupon being a bearer of various associated positional rights and obligations. In the UK, the latter currently include the rights/obligations of owning various assets − such as real estate, shares, cars and boats − of making and being bound to contracts, of suing, being sued and so on. Slightly more succinctly, and also summarising related notions, the conception sustained is of the firm best understood as a relationally organised entity and specifically a form of (appropriately positioned) community; of the legal aspect of a firm being (or arising from) precisely the process of ­positioning (of a community otherwise organised with an economic purpose or intent); of incorporation properly interpreted as a specific (legal) process of positioning of such a community; and of a legal fiction being a term of art for a situation being legally interpreted as other than it is to permit the application to it of a specific (set of) rule(s) that otherwise would not apply. It is the latter device that permits specific rules regarding various rights and obligations intended for human beings to be borne by a community per se, such as a firm, for which they were never originally created or intended. The mechanism by which this happens involves the firm, through ­incorporation, being positioned as a juridical person, a form of legal person. But there is no sense in which the firm per se, a positioned community, becomes thereby, qua entity, some kind of ontological fiction. Nor is it the case that the corporation, if currently familiar and taken for granted, is something somehow natural and with a history free of contestation.

7  Issues arising for further study Finally, in the light of the arguments so far laid out, various issues warranting further research and analysis can be suggested. One interesting example concerns the nature of ownership. If the firm is always a form of community and the components of a firm include human individuals, how do any claims that firms are owned sit with the modern illegality

110  Topics in scientific ontology of slavery? Nor are tensions or paradoxes surrounding the idea of firm ownership merely legalistic. I noted earlier that parts and wholes/totalities do not causally impact each other; rather, parts are properties of ­totalities and the latter act through their parts acting. An orchestra performs through the actions/performances of the conductor and musicians. But such ­considerations also suggest that a member of a firm cannot own that same firm, for this entails that (in addition to any legalistic problems relating to slavery) this individual owns him or herself, which is paradoxical at least35. Of course, these apparent problems can all be bypassed by avoiding use of the term ‘ownership’ in such contexts and talking instead merely in terms of rights (of disposal, of use or restricting/excluding access to), specific fixed assets etc. I do indeed favour this sort of solution (whereby puzzles or tensions of this sort are resolved not by philosophical analysis, but by adjustment in language use). But even this strategy leaves open the question as to what might be meant by the (clearly historically specific) idea of ownership and how the term actually functions in contemporary society in relation to the firm, not least where its use appears incoherent. What purpose, if any, is served by a reliance on the term in a context in which its use seems both legally illegitimate and philosophically incoherent? For useful discussions of these sorts of issues, see especially Honoré, 1961; but also Hansmann, 1988, 1996; Pipes, 1999; and Deakin, 2012b. A second line of possible research arising out of the analysis is assessing whether a conception that interprets the firm as a community p ­ rovides relative support for the view that the law should be used to promote the interests of all the various stakeholders in a firm rather than those of the shareholders exclusively. Let me briefly elaborate. I suggested earlier (see in particular endnote 1) that much of the ­literature purporting to be on the nature of the firm follows Coase in questioning less the nature of the firm and more the reason that firms exist, seeking answers in terms of functions that firms supposedly serve. This may actually be more characteristic of research emanating from economics. For their part, contributors from legal studies or corporate governance have tended to accept (albeit often in an overly uncritical fashion) these contributions from economics as realistic and instead viewed their own task as applying the results of economists. Specifically, these latter contributors have sought either to use these claims from economics to reveal the economic structure of the legal framework underpinning the firm or to theorise, and thereby reinterpret or otherwise modify, the workings of relevant aspects of the legal system so that it better facilitates the firm’s functions as identified in economics. In so doing, contributions from legal studies too have contributed less than usually supposed to the actual task of elaborating the nature of the firm36. In the latter legal studies, at least since the mid-nineteenth century, two basic ideals for the firm qua incorporated entity have influenced most of

The nature of the firm and the corporation  111 the suggested reforms of legal theorists. These have been the shareholder ideal that all activities within the firm are ultimately the responsibility, or for the benefit, of the shareholders; and the stakeholder ideal that companies are responsible to a wide range of groups in the wider community. For the most part, it is versions of the shareholder ideal that have tended to dominate. This ideal has been manifest most especially as versions of the ‘shareholder primacy model’ portraying the firm as a nexus of contacting relationships. From this perspective, the firm is viewed as a response to a conflict of interests (between the contracted principles and their agents in the firm). Much of modern corporate law that is inspired by economics seems to accept this sort of view of the functioning of the firm. The analysis set out above, however, centring on the firm as a form of community, may appear to lend relative support for some sort of stakeholder notion. We have seen that a conception of the firm as a nexus is unsustainable and it is equally clear from the firm as a community perspective that both the unincorporated and the incorporated firm are far more than units for resolving supposed agency antagonisms (whilst neither, qua communities, can seemingly be coherently owned anyway). It cannot be denied that there are competing interests within the firm, but this just renders the firm like any other community. Deakin, 2012b adopts this sort of orientation in a recent interesting ­contribution that, though not especially philosophically oriented, nevertheless sustains a conception of a sort that resonates with that maintained here. Deakin recommends in particular that the firm be treated as a ‘commons’, as a collectively managed resource, relative to which there are competing interests and various ‘overlapping and potentially conflicting property type claims on the part of the different constituencies or stake holders that provide value to the firm’ (Deakin, 2012b, p. 381). Deakin’s goal is that corporate law be based on this conception and used to make the firm more workable, not least through seeking to ensure that the different stakeholder groups are able to participate adequately in the formulation of the rules governing the management and use of those resources37. The analysis of the current chapter suggests that stakeholder conceptions such as Deakin’s are, relatively speaking, more philosophically grounded than hitherto appreciated and, on that basis at least, seemingly deserving of greater attention than currently afforded. The sorts of issues just raised do, I think, also relate to the question raised by Adler (2001) and others as to whether there not only should be, but actually is, a trend to greater collaboration amongst the various members of the communities involved in commerce. Adler does not always put it quite like this. In fact, Adler (2001) and others counterpoise the idea of the firm as a community interpreted as an ‘organisational form’ based on mechanisms of trust to other ‘organisational forms’, and specifically the market form coordinated by prices and hierarchical forms coordinated by authority. I earlier rejected this sort of contrast, suggesting that all

112  Topics in scientific ontology social emergents or ‘organisational forms’ containing human beings as ­components are, or are aspects of, forms of community ultimately based on trust. The feature that I suspect Adler and others are getting at is a ­distinction I elsewhere make and discuss between a community in itself (the general case) and a community that is additionally for itself (the special case).38 From this perspective, Adler’s thesis of a ‘trend towards greater reliance on trust’ (Adler, 2001, p. 216) might be reinterpreted as a trend towards participants becoming reflexively self-aware of themselves qua community members, as components of communities for themselves (a trend that might be said to apply across firms where different firms are organised through interfirm relations of various sorts to provide a community of firms). This trend, if present, would presumably manifest itself as a tendency towards collaboration based on common purpose rather than opposition based on difference. Perhaps the emergence of contributions by those such as Deakin, just noted, supports Adler’s contention. Such a tendency, if it were indeed in play, would presumably mostly reveal itself in public ­acknowledgement of certain shared values by community members, more attention to common interests and a greater willingness to seek collaborative resolutions where positional interests diverge. It would be interesting to see whether empirical research bears this out. The analysis set out bears implications too for those who think that corporations specifically, and in particular multinational corporations, should be subject to more effective national and international regulation. Multinationals are often the focus of criticism due to practices of transfer pricing and other related activities that reduce the ability of national or regional governments to tax or otherwise affect their activities in the countries in which they operate. Though it would take too much space to develop the contention here, it is clear that all these activities (and numerous others; see Lawson, 2015 [Chapter 4 below]) are enabled by the sorts of multipositioning of firms discussed throughout the chapter, with the consequent rights of certain companies to ‘own’ other companies including those designated subsidiaries, in some instances relating to them as mere holding companies etc. Clearly, the analysis set out above provides a framework for examining all these activities somewhat systematically, including the positional rights and obligations implicated in them. This, coupled with recognition of the contingent nature of the modern corporation, allows the easy identification of a set of historical matters – formally contested, though currently taken for granted – that might be questioned anew. These, we have seen, include the sorts of communities that are most reasonably positioned as incorporated companies via the legal fiction of the Legal Person in the form of the Juridical Person; the appropriate rights and obligations to be made available to firms so positioned; and the appropriate body for making decisions relating to all such matters. For example, many question

The nature of the firm and the corporation  113 whether it is reasonable that, as recently became the case in the UK, companies have access to rights secured in bills of human rights intended only for the protection of human beings (on all this see Lawson, 2015 [Chapter 4 below]). As one last suggestion, let me also indicate an interesting methodological project that arises from all this. Central to the analysis laid out is the idea that many phenomena of social reality are best understood by investigating how they have come to be positioned as they are, with all that this entails. This is the manner in which I have gone about elaborating the nature of the firm. Although I have not had space to develop the claim, I think it is clear that most previous attempts to understand the nature of the firm have proceeded very differently. Specifically, they have taken prominent examples of the firm and abstracted out common properties of observed individual examples. The latter way of proceeding is a special case of a method that has been greatly explored by Michael Hannan and his collaborators in their studies of category formation39. The sort of approach that I have adopted, and that developed by Hannan and others, may converge on similar conceptions in specific cases; but they also may not. The essential difference between our approaches, I suspect, is that whilst the approach that I adopt is in effect oriented to seeking out features common to some kind X, a concrete universal, the approach of Hannan is ultimately based on abstracting out properties manifest in all individual members of the kind X, an abstract universal. From the perspective of my own approach, it is quite feasible that all individual members of a kind ‘firm’ are differentiated by most of their manifest properties or particulars, and that if so this is not a problem; they each nevertheless necessarily individuate the (concrete) universal of being a firm (of achieving membership/occupancy of a specific position that provides access to associated rights and obligations). Put differently, a firm, on my conception, could never be considered a firm in virtue of some abstract property, such as possessing bricked walls, using a specific technology etc.; but only by ­virtue of manifesting the concrete universal ‘firm’, if doing so uniquely (i.e., differently from other firms), so that the universality involved is dialectically related to particularity in a manner that abstract universals are not. For the approach of Hannan and others, in contrast, observed differences in manifest properties are interpreted as significant and give rise to the notion of partiality of category membership; the (abstract) universal is manifest only partially (see especially Hannan, 2010). I suspect that it would prove to be methodologically insightful ­extensively to compare and contrast these two approaches (and perhaps those of others too – for example, the ‘no social objects, merely social facts’ orientation of John Searle, 2010) to social grouping as a basis to understanding the fundamentals of social reality, to identify their different scopes of relevance, if any. And so on.

114  Topics in scientific ontology I could go on. With the analysis pitched at the level of ontology, any results or insights achieved likely bear in some way on very many aspects of substantive theorising (including formulating projects of progressive change) and method. The foregoing are illustrative examples. The point is that ontological elaboration functions to clear the path a little for further developments in more substantive forms of reasoning concerning the ways of acting of the firm; and the foregoing merely sketches some likely fruitful research projects of this sort that immediately come to mind given the conception of the firm defended.

8  Final comments and conclusion A basic mechanism of all human history and development, I argue, is the creation of social positions and the allocation of people and other entities to them. In the case of artefacts, positioning results in certain intrinsic ­capacities of the objects being interpreted as their (sets of) system ­function(s) within the (positioning) community, as rights and obligations concerning their operation fall on members of the positioning community. In the case of human persons being positioned, it is the human position occupants themselves who get to access novel powers in the form of rights and obligations. Ultimately, here too the outcome serves the functioning of a wider system, namely the community, in some way. Somewhere in human history, the idea of attributing rights and ­obligations to non-humans arose. The position to which non-human entities are allocated in order to obtain the right to acquire other rights and obligations is, currently in the UK, that of Legal Person. The latter includes two nested subpositions of Juridical Person and Natural P ­ erson. A significant first historical step in this regard, at least in the UK, was the allocation of not-for-profit communities to the position of Legal P ­ erson, a process of incorporation, resulting in empowered communities qua ­corporations. Eventually forms of for-profit communities or firms also came to be so positioned, giving rise to structured communities that eventually − albeit via a long non-linear process of significant political contestation − were manifested as the business companies/corporations of the current period. Any firm, whether or not constituted via a process of incorporation, is both economic and legal in nature. Though detailed objectives, internal structures and mechanisms will vary from case to case, place to place and time to time, the basic function of the firm is always a collectively coordinated production of goods and services to be sold to others, in a way that is intended to be advantageous to (at least some of) the community members, with (at least some of) that advantage interpreted as ‘profits’. In this sense, the firm is always of an economic nature. But as with every other social phenomenon, a social identity is obtained through positioning in a relevant community. And this, in the case of the modern firm,

The nature of the firm and the corporation  115 is – currently at least – always a legal process and condition, for the unincorporated firm as much as for the incorporated. I have drawn out various suggestions from the analysis that bear on the goal and conduct of more substantive work on the topic. These suggestions are mainly indicative; other possibilities are easily determined. The overall conception sustained is reasonably abstract and perhaps somewhat preliminary; certainly, further ontological elaboration is required to account for the variety of structures as arise and mechanisms that are in play (see Lawson, 2015 [Chapter 4 below]). Why bother? In truth, taking an ontological stance of some sort towards these and all such issues is unavoidable. The options, whatever the substantive concern, are always only whether to leave ontological presuppositions implicit or to render them more explicit, systematic and sustained. As in every other domain of research, the more that the presuppositions that ground substantive analyses of the firm are left implicit and unexamined, the less coherent the substantive elaboration is likely to be40. Alternatively put, it is very likely that theorisations of the conditions, persistence, consequences and potentials of the firm, along with methodological orientations to its analysis, will be better grounded if co-developed alongside explicit, systematic and sustained attempts to elaborate the firm’s actual nature in all its facets.

Notes * First published as Tony Lawson (2015), ‘The nature of the firm and peculiarities of the corporation’ Cambridge Journal of Economics, 39 (1): 1–32. † I must thank the Independent Social Research Foundation for generous ­funding of the research on which this chapter draws. For helpful comments on an earlier draft, I am additionally grateful both to three referees of the Cambridge Journal of Economics and especially to Simon Deakin. 1 Indeed, and following Coase’s lead, most contributors, even when ­presenting themselves as addressing the nature of the firm, have actually addressed mostly different questions. For example, Coase’s starting points are the assessment that according to ‘economic theory’, resource allocation is best achieved via the price mechanism and the observation that this does not happen inside the firm. Thereupon, Coase sets about questioning not the nature of the firm, but why firms (interpreted in passing as forms of organisation) exist at all. Thus, Coase writes: But in view of the fact that it is usually argued that co-ordination will be done by the price mechanism, why is such organisation necessary? … Yet, having regard to the fact that if production is regulated by price movements, production could be carried on without any organisation at all, well might we ask, why is there any organisation? (Coase, 1937, p. 388) He later adds: ‘Our task is to attempt to discover why a firm emerges at all in a specialised exchange economy’ (Coase, 1937, p. 389). (Coase’s answer as to the reason a firm can exist, of course, runs in terms of there being transaction costs involved in purchasing everything on the open market, some of which a firm can often minimise or avoid altogether.) If Coase, then, pursues a different question from that expressed in the title of his paper, others have

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followed suit and, often under the same head, also addressed instead (not the firm’s nature, but) why the firm might exist. In doing so, some have sought to develop Coase’s theory (see, e.g., Williamson, 1975, 1987), whilst most have suggested alternatives (for a varied selection of alternative explanations see, e.g., Milgrom and Roberts, 1992; Fransman, 1994; Jensen and Meckling, 1976; March and Simon, 1958; Nelson and Winter, 1982; Rajan and Zingales, 1998; Blair, 2004). Although many such contributions are presented (or interpreted) as advances on the arguments of Coase, few of the noted theoretical developments actually contradict Coase’s minimalist if mostly implicit conception of the nature of the firm in terms of the organised coordination of allocation and production via direction. Rather, like Coase’s contribution, they concentrate instead on seeking an explanation of the firm’s existence mostly on the presumption that standard economic theory claims that markets themselves could and ought to do everything. Any conception of the nature of the firm is mostly left implicit and certainly unelaborated. It is seemingly for this reason that the sorts of issues noted at the outset tend to be left unresolved rather than systematically addressed. One likely explanation of any such neglect by social ontologists turns on the fact that although broad philosophical conceptions are intended to cover the whole of social reality, they can be brought to bear on specific social phenomena only through their being supplemented with additional empirical claims and assessments. Where this is carried through, the danger, often realised, is that critical observers/commentators take themselves to undermine the ontological conception as a whole by casting doubt on particular empirical extras (see Fullbrook, 2009, ch. 4). The alternative danger, however, arising where ontologists avoid engaging at a more empirical level, is that a perception is thereby encouraged that general or philosophical social ontology has little to contribute at the more substantive level, even at that of scientific ontology (i.e., at the level of understanding the natures of specific social phenomena such as money, technology, the firm etc.). For this reason, various relatively sympathetic commentators have indeed raised this worry in criticising my own apparent reluctance to embark more frequently on this route (again, see Fullbrook, 2009, ch. 4). There are more sophisticated forms of the thesis of casual reduction which hold that emergent causal powers are diachronically explicable solely in terms of the causal powers of the components. However, I show elsewhere that even this version of the thesis does not hold in most cases and seems never to with respect to social causation (see Lawson, 2013b [Chapter 7 below]). An additional form of emergent social system is language. The convention adopted varies throughout, reflecting the fact that some ­chapters were previously published, and the original conventions of each original publication are maintained. This particular entity view is very often associated with Gierke’s four-volume Das deutsche Genossenschaftsrecht and in particular with Maitland’s translation of parts of Gierke (1900) into English. In his translator’s introduction, Maitland writes of the firm or corporation that it: is no fiction, no symbol […] no collective name for individuals, but a living organism and a real person, with body and members and a will of its own. Itself can will, itself can act […] It is not a fictitious person […] It is a group-person, and its will is a group-will (Maitland in Gierke, 1900, p. xxvi).

Although this formulation is not without insight, it is easy to see why many might react against it − not least to the notion that it is a ‘living organism’ or a ‘real person’. Talk of its possessing a ‘body’ and a ‘will of its own’ does

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encourage the treatment of the firm as somehow analogous to a human individual. Thus, for example, Grossman and Hart (1986, p. 693) ‘define the firm to consist of those assets that it owns or over which it has control’; and Hart and Moore (1990, p. 1120) ‘identify a firm with the assets it possesses’. The sorts of problems that arise here are manifest in the difficulties of presenting such a position. What specifically is the ‘it’ in these two sentences? Seemingly in each case the ‘it’ refers to the firm. But then, the firm cannot be or consist in ‘those assets’; otherwise assets would own and control themselves. Even in these formulations, something more is presupposed. Nor can we merely drop all references to terms such as ‘ownership’ and ‘control’ and state that the firm is merely a collection of assets, for then the question arises as to which of all the assets in the world to interpret as constituting any particular firm. Relations of some sort, and in particular those relating to the control of assets (access, use and disposal), are necessary to distinguish any given firm. But once these are acknowledged, an organising structure is rendered explicit and so any conception of the firm as an aggregate or mere collection (e.g., of assets) is seen to be untenable. Wholes act through their parts acting and their parts are coordinated in their actions through the emergent irreducible relational structures that organise the lower-level elements as (perhaps through modification) components of emergent wholes (see especially Lawson, 2013a, 2013b [Chapter 7 below]). Thus, an army attacks through the actions of its soldiers (or guided weapons); a school educates through the interactions of its members; a football team scores through a player scoring. Parts of a whole, though, interact with, and relate directly to, not a whole, but each other and the organising structure. An individual picks up a pen through the various interactions of the brain, nervous system, muscles etc. (again, see Lawson, 2013a, 2013b [Chapter 7 below]). Thus, focusing in particular on limited liability companies and avoiding conceptions of emergent social totalities, John Searle writes: ‘Limited liability companies have no physical existence (that is why they are called “fictitious persons”)’ (2010, p. 115). For a lengthy assessment and response, see Lawson, 2017. Whether they intend it or not, this sort of conclusion is also at least encouraged by those who insist that the firm is best treated as merely a ‘nexus of contracts’ (see, e.g., Jensen and Meckling, 1976; Alchian, 1984; ­Alchian and Woodward, 1988; Cheung, 1983). Thus, Jensen and Meckling (1976), who brought to prominence the idea that the firm is but a ‘nexus of contracts’, write: ‘It is important to recognize that most organizations are simply legal fictions which serve as a nexus for a set of contracting relationships among ­individuals’ (Jensen and Meckling, 1976, p. 310). This sort of formulation easily underscores the idea that that any notion of the firm (or ‘organisation’) as a totality, as an entity that is more than the contracting relations, is fictitious in an ontological sense, that any idea of the firm as organisation is a mere artificial construction lacking a referent. I explore below what a legal fiction actually is. In advancing their idea of a firm as a nexus of contracts, Jensen and Meckling are clearly seeking to distance themselves from the idea that the firm is an individual. This, they clearly suppose. is the dominant entity view of the firm and it is a conception these authors seek to avoid in proposing that the firm be treated as a nexus of contracting relationships: Viewing the firm as the nexus of a set of contracting relationships among individuals […] serves to make it clear that the personalization of the firm implied by asking questions such as “what should be the objective function of the firm?” or “does the firm have a social responsibility?” is seriously misleading. The firm is not an individual’. (Jensen and Meckling, 1976, p. 311)

118  Topics in scientific ontology 11 See, for example, Kogut and Zander, 1993, 1996; Zander and Kogut, 1995; Adler, 2001; Heckscher and Adler, 2006; O’Mahony and Lakhani, 2011. 12 See, for example, Kogut and Zander, 1993, 1996; Zander and Kogut, 1995. Thus, Kogut and Zander argue that ‘Firms are social communities that specialise in the creation and transfer of knowledge’ (1993, p. 625), but the term ‘­community’ is not elaborated on and is rarely actually used. Nor is it elaborated further in Zander and Kogut, 1995, or even in Kogut and Zander, 1996, where these authors do observe that ‘Through membership in a social community called the firm, identity is developed that changes the character and quality of human discourse and behaviour’ (pp. 503–4), but thereupon they never mention the term again. 13 For example, see Adler, 2001. 14 Such factors may, for example, be geographical (Marquis and Battilana, 2009); knowledge sharing (Heckscher and Adler, 2006; Bechky, 2003a, 2003b); cooperation on technology and innovation (see, e.g., Tushman and Rosenkopf, 1992; Aldrich and Ruef, 2006). For a recent comprehensive overview that also adopts a delimited conception of community, see O’Mahony and Lakhani, 2011. 15 Moreover, my primary concern here is not, as it is with most existing contributions (see, e.g., Adler, 2001), with identifying an ‘organisational form’ that is either preferable or becoming dominant, but with systematising features that are common to them all. From the perspective advanced here specifically, any questioning of the preferred organisational form of a firm will necessarily be an assessment not of whether it is a community, but more of the type of ­community it will be (on this, see also Lakoff, 1996). 16 This means that in contrast to most other contributions, ‘organisational forms’ and ‘coordination mechanisms’ of price/market and hierarchy/authority are not contrasted with those of community/trust; rather, the former two (if  ­indeed themselves legitimately contrasted − see especially Schumpeter, 1942) are both specific features of communities organised by sets of rights and obligations based on trust. Perhaps a better term for the focus of Adler and others would be ‘reflexive collaboration’. However that may be, with these distinctions hopefully clear, I will return to the contributions that seemingly emphasise a narrower conception of community in due course. 17 It is important to recognise that this example of water, if familiar, is not representative of all practices of classification of non-social phenomena. It is typical in that the basis of the delineation is a practical one. However, although we (especially through science) seek non-arbitrary delineations, the practical choice is not always in the end in terms of a substance possessing a unique and determinant chemical composition. In fact, in carving up the non-social realm, classifications can and do emerge where, for example, 1) either/ or conceptions make up a kind; or 2) two substances with identical chemical compositions are interpreted as members of different kinds. As an example of 1), the kind referred to as jade is made up of different substances, each with their own chemical compositions (in fact, the substances that have been counted as jade have varied at different times and places in the course of human history). Currently, the term ‘jade’ is applied to two different rocks made up of ­different silicate minerals also known as nephrite and jadeitite. The former consists of the calcium- and magnesium-rich amphibole mineral actinolite and has the chemical formula Ca2(Mg,Fe)5Si8O22(OH)2; the rock called jadeitite is composed almost entirely of jadeite, a sodium- and aluminium-rich pyroxene mineral with composition NaAlSi2O6. As an example of 2), ­charcoal and diamonds are for practical reasons usually treated as different kinds, even though both are forms of carbon and so have an identical chemical composition. Even in the case of water, it might have turned out to be the case that

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in delineating it, those involved had lumped H2O together with the substance we call ‘hard water’, which has a different chemical composition. To appreciate the importance of tax law in firm constitution, see, for example, Robé, 1999 or Deakin, 2003. I focus on the limited company in due course below. Currently, to set up as a sole trader in the UK, a community as noted has to be registered as such with HMRC. This is done by the individual controlling the firm. To set up instead as a business partnership, one individual must become the ‘nominated partner’, who is responsible for keeping business records and managing tax returns. The nominated partner must register the business partnership with HMRC. On so doing, he or she automatically registers personally for ‘self-­ assessment’. Otherwise, the legal implications are much as for the sole trader, with the nominated partner incurring the administrative generalised liabilities of the individual with responsibilities as a sole trader. It is not essential (i.e., a matter of law) that directors run a company in the sense of running its operations. This can be delegated to others while directors maintain a monitoring role. For an early contribution recognising the legal manner of constituting the firm, see Hodgson, 2002. Many of the relevant issues are discussed in Deakin, 2003, 2012a, 2012b. An interesting additional case to consider is the classification of the special purpose entity (or vehicle). This is a legal entity, usually a limited company of some type, that, as its name suggests, is created (usually by an existing ‘sponsoring’ company) for some very specific (set of) purpose(s). These purposes usually take the form of acquisition, financing, management and/or use of specific assets. The entity so created is usually a subsidiary company with an asset/liability structure and legal status such that its obligations are rendered secure even if the parent or establishing/sponsoring company goes bankrupt. To ­establish independence from a sponsoring company, any special purpose entity will often be set up as an ‘orphan’ company with shares settled on charitable trust and with professional directors provided by an outside administration company. Still there must be directors somewhere. The entity in question is an organised subcommunity positioned/registered as a real company with its own separate legal identity and subject to the laws and r­ egulations of the country of domicile. In addition to directors, the entity will need at least a company secretary and a registered office etc, with all such components appropriately positioned and organised by a coherent system of rights and obligations ensuring the maintenance of statutory books, the making of statutory filings of audited accounts, tax returns and other company matters etc. In ­addition, the entity’s characteristic function or ‘special purpose’ will confirm to the economic one I have associated with firms, even if taking a very specific form. The special purpose entity is a community qua firm, even if a somewhat special case. This includes the powers of those in control over the firm’s managers (see ­Rajan and Zingales, 1998, 2001; Lawson, 2012 [Chapter 2 above]). This certainly is a long-standing prominent interpretation of the legal fiction − an interpretation, indeed, whereby it is a device that has not always been popular. Jeremy Bentham, for example, opposed its widespread usage, writing of it that ‘A fiction of law may be defined as a wilful falsehood, having for its object the stealing of legislative power, by and for hands which durst not, or could not, openly claim it; and, but for the delusion thus produced, could not exercise it’ (quoted in Ogden, 1932, p. xviii). In modern times it is through being positioned as Natural Persons, typically at birth in a country, that individuals acquire legal capacity. Clearly, though,

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throughout history specific groups of people have had their freedom or capacity restricted. Some have had restricted freedom of movement; others have never achieved, or have had withdrawn, the right to vote etc. English law, for example, used to treat married women as lacking the capacity to own ­property or even to act independently of their husbands (the last of these rules was repealed as recently as 1973, with the Domicile and Matrimonial Proceedings Act, which removed the wife’s domicile of dependency for those marrying after 1974 so that a husband and wife could have different domiciles). In Roman and early Germanic law, slaves had no legal rights or duties and were treated merely as legal objects/property. Under Roman law, in fact, children born with severe deformities, known as monstra, could be killed with the permission of a magistrate. As societies have developed, and various forms of intergroup oppression have formally ceased, many ‘incapacities’ have been removed. In fact, in modern l­egal systems, ‘capacity’ is the principal juridical mechanism by which ­individuals and entities are empowered to enter into legally binding agreements and, more generally, to arrange their affairs using the instruments of private law (see Deakin and Supiot, 2009, for a rare if ­detailed discussion of these sort of issues). Other forms of company include the private company limited by guarantee, wherein directors or shareholders financially back the organisation up to a specific amount if things go wrong; the private unlimited company, where directors or shareholders are liable for all debts if things go wrong; and the public limited company, where shares are traded publicly on a market, such as the London Stock Exchange. Of course, there are exceptions or better limits to limited personal liability for those who own shares in a company. The latter shareholders may be held ­personally liable if, for example, they personally and directly injure someone; personally guarantee bank loans or business debt on which the company defaults; fail to deposit taxes withheld from employees’ wages; intentionally do something fraudulent, illegal or reckless that causes harm to the company or someone else; or treat the company as an extension of their personal affairs, rather than as a separate legal entity. In the latter case a court might decide that in this case the company as such does not really exist and find that its owners are in effect doing business as individuals who are personally liable for their acts. The device of incorporation likely came to the UK as a result of the Norman Conquest. See Lawson, 2015 (Chapter 4 below); Spencer, 2004. Commercial corporations gained clear trading advantages over business partnerships. They could continue to exist even if the original partners died or transferred their shares; in this way they could avoid death duties. They could bring and defend legal actions in their own name rather than the names of the partners. Because assets belonged to the company per se (and not shareholders), they could not so easily be used to pay the debts of particular shareholders experiencing bankruptcy etc. In 1825 the Bubble Act was repealed, allowing shares to be freely traded. In 1844 William Gladstone (then President of the Board of Trade) pushed through the Joint Stock Companies Act. This allowed companies to dispense with the need for a special charter; thereafter, they could be incorporated by a single act of registration. However, it did not include the right for shareholders of automatic limited liability, which was strongly opposed by many liberals. Limited liability came 10 years later in an 1855 Limited Liability Act after a series of heated debates. This, though, carried various qualifications that were removed by the 1856 Joint Stock Companies Act, which allowed firms to obtain limited liability with ‘a freedom amounting almost to license’.

The nature of the firm and the corporation  121 33 Few if any were more significant than the case of Salomon v Salomon and Co. Ltd in 1897. Mr Aron Salomon made and sold leather boots and shoes in his establishment in Whitechapel. Eventually he turned his business into a limited company. His wife and five eldest children became subscribers and two eldest sons also directors (to comply with the Companies Act of 1862, which required a minimum of seven members). Salomon took 20,001 of the company’s 20,006 shares for himself. The price fixed by the contract for the sale of the business to the company was £39,000. In an ensuing action the court found that this was ‘extravagant’ and not ‘anything that can be called a business like or reasonable estimate of value’. Transfer of the business took place in 1892. The purchase money the company paid to Salomon was £20,000. It additionally gave him £10,000 in debentures (i.e., Salomon gave the company a £10,000 loan, secured by a charge over the assets of the company). The balance paid went to extinguish the business’s debts (£1,000 of which was cash to Salomon). Soon afterwards, the company got into financial difficulties, holding stock it could not sell. Salomon and his wife lent the company money and he cancelled his debentures. But the company needed more money. It succeeded in obtaining a £5,000 loan from a Mr Edmund Broderip. But Salomon’s business still ­declined and he could not keep up with the interest payments. Eventually the company was put into liquidation. To cut a long story short, when Broderip failed to realise his unsecured loans, he instituted an action claiming that Salomon was personally liable. The High Court and Court of Appeal held Salomon to be liable. However, upon appeal to the House of Lords, the latter overturned the decision, arguing that a company had been duly created and cannot be deprived of its separate legal personality. 34 The Act still required commercial corporations to include a statement of their objects in the constitution. But, under Section 3A, the Act permitted the corporation to state 1) simply that it was a ‘general commercial company’ and 2) that the Corporation has ‘power to do all such things as are incidental or conducive to the carrying on of any trade or business by it’. And in Section 35(1) of the same Act, the law was transformed so that ‘the validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company’s [objects clause]’. 35 On a rejection of the idea that the firm can be owned from a slightly different perspective, see Deakin, 2012b. 36 Early examples of this sort of reasoning can be traced to the ‘law and economics movement’ inspired especially by Richard A. Posner’s acceptance of, and response to, Coase’s early transactions cost minimisation theory of the firm’s function (see, e.g., Posner, 1972). 37 Deakin himself expresses matters as follows: The firm is best seen as a collectively managed resource or “commons” which is subject to a number of multiple, overlapping and potentially conflicting property-type claims on the part of the different constituencies or stakeholders that provide value to the firm. Drawing on the theory of the commons, this paper has argued that the sustainability of the corporation depends on ensuring proportionality of benefits and costs with respect to the inputs made to corporate resources, and on the participation of the different stakeholder groups in the formulation of the rules governing the management and use of those resources. Viewing the corporation as a commons in this sense is the first step toward a better understanding of the role that the corporate form can play in ensuring wider economic and social sustainability. (Deakin, 2012b, p. 381).

122  Topics in scientific ontology 38 See Lawson, 2012 (Chapter 2 above). This distinction may also cover the conception of O’Mahony and Lakhani, who ‘define communities as voluntary collections of actors whose interests overlap and whose actions are partially influenced by this perception’ (2011, p. 6). 39 See, e.g., Carroll and Hannan, 2000; Hannan, 2010; Hannan et al., 2003, 2007; Hannan and Freeman, 1977; Hannan and Hsu, 2005; Hsu et al., 2009a, 2009b; and Pólos and Hannan, 2002. 40 Numerous advantages of ontological theorising are elaborated on, for example, in Lawson, 2003.

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4 The modern corporation The site of a mechanism (of global social change) that is out of control?* †

1 Introduction The ways of acting of modern corporations, not least those that are multinational, constitute significant mechanisms of social change. I doubt that this assessment is overly contentious. Indeed, there is seemingly ­widespread agreement that the mechanisms in play are dynamic, ­pervasive and consequential1. There is less agreement, however, as to the extent to which these ­mechanisms, or their effects, are especially desirable. Indeed, informed commentators regularly criticise the fact that multinational corporations almost everywhere operate beyond the control of various local regulators, not least tax authorities2. Some go further, suggesting that corporations act in ways that are undermining of any semblance of democracy3. A ­sizeable few even express concerns that modern corporations are not only frequently ‘beyond control’ (of local regulators and so forth) but also, on occasion at least, seemingly ‘out of control’4. How, though, could such a scenario arise? How is it structurally feasible that the modern corporation could be frequently beyond the control of relevant authorities, let alone out of control, or at least appearing to be so to various close observers? Presumably this appearance might be gathered from instances where mechanisms that a corporation grounds, or their effects, are of a sort that no one particularly wants or feels able to defend or prevent. But how could such interventions be grounded? The foregoing are the sorts of questions I pursue here. That is, whilst most concerned commentators occupy themselves with examining ways of reining in corporations, with accommodating or relationally steering their mechanisms and thus effects, I want to explore the structural conditions of their possibility. I take it that any (generative) mechanism, at its most basic, is a property of some structured entity. A mechanism is a way of acting of that entity that is made possible by its organising (relational) structure; and it is triggered under various conditions. Put differently, it is a causal power of a structured entity in play5 (for an elaboration of this conception, see, e.g., Lawson, 1997).

126  Topics in scientific ontology My objective here, then, can be formulated as an enquiry concerned with identifying those aspects of the structuring of the corporation (in particular, the multinational corporation) and its (triggering) conditions of oper­ iscussion. How are ation that give rise to mechanisms of the sort under d mechanisms that are widely found to be beyond the control (of interested parties) and sometimes suspected of being out of control structurally grounded? At the heart of the answer, we will see, if somewhat unexpectedly (to  this contributor at least), is a simple if somewhat bizarre case of a highly contingent, certainly in no clear way natural, form of social positioning. Though easily summarised, this answer requires a good deal of (social-ontological) elaboration.

2  The corporate mechanism It is hardly news, of course, that corporate businesses wield great financial power and use the latter to gain political power, not least through manipulating politicians to lobby on their behalf, controlling forms of media and so forth. They also engage large expensive legal teams both to oppose national and international proposals including treaties and suchlike considered detrimental to their perceived interests and/or, in the few cases in which governments or other bodies do successfully take a stand that curbs aspects of the activities of these companies, to achieve substantial compensations for claimed losses of profits etc6. This is all fairly straightforward. A more interesting issue is the source of this power that enables corporations to operate in this manner and achieve success, including often legally avoiding paying reasonable taxes on profits in locations where their activities are significant. At a fairly superficial level, of course, the mechanisms of tax evasion and suchlike are also already well understood. Fundamental here is the practice of transfer pricing. The capitalist world is comprised of numerous countries and legal jurisdictions, each with its own specific set of tax rules. Companies thus take these different rules into account in making decisions about how to organise their various activities. Fundamentally, they decide where to locate their subsidiaries by examining how the different locations affect their overall tax bills and suchlike. In fact, the 20year period prior to the 2008 financial crisis was one of unprecedented international spread and consolidation of global businesses7. Once location decisions are made, transfer pricing kicks in. Transfer prices are those that one part or a subsidiary of a company pays to other parts located elsewhere. Thus, by locating a subsidiary in a low tax country, any head office or indeed any additional subsidiary located in a relatively high tax location, such as (currently) the UK, can transfer most or even all its nominal profits to the subsidiary in the low tax country. This it does by buying parts from the less-taxed subsidiary at hugely inflated

The modern corporation  127 prices, or by paying significant royalty fees for usage of intellectual property rights and brands owned by the company, by taking out loans from it and servicing (typically high rates of) interest charged on them etc. ­Transfer pricing thus involves payments from the UK business to non-UK companies within the same corporate empire. Even though this process is well understood, there is not much that the relevant tax authorities appear able to do about it. There is a presumption that purchases should be at ‘fair’ market prices. But whatever the latter may mean, the transactions involved would never take place in an open market, so who is to say what any ‘fair market price’ might be? Companies invent stories to justify the prices they use, and leave it to under-resourced and ill-equipped tax authorities to think of ways of challenging them; the challenges rarely materialise. Moreover, the rise of ecommerce makes matters even more complicated for any regulatory body, as services can be delivered remotely8. Certain countries, needless to say, go out of their way to provide low tax regimes for corporations precisely to entice them to establish subsidiaries within their boundaries. Where countries do not do this, the regulatory bodies typically respond by seeking not to undermine or destabilise ­corporations or their mechanisms, but to identify novel ways of adjusting to, or accommodating the latter’s effects; in this way they engage in a negative form of ‘relational steering’ (Donati, 2013). The latter, though, is easier said than done. One possibility often ­discussed is for the tax authorities in question to move away from corporation tax (taxing profits, which can be easily shifted abroad) towards taxing sales via value added tax (VAT). However, this too poses difficulties, ­because of varying VAT rates across countries9. Another possibility often examined is that of levying all taxes at the site of the head office, especially if it is in a country such as the UK or US, where tax rates are relatively high (and if necessary distribute proportions to countries where parts are located on, say, some pre-agreed basis, thus removing the incentive for subsidiaries to seek low tax havens). But this too is easily circumvented. Actually, the UK tax structure is already formulated in such a way that corporate groups are taxed as a whole rather than on the basis of their separate subsidiaries etc. But there are so many tax loopholes, special deals and related schemes that the corporation is usually able to find some way of evading paying taxes nonetheless10. Whilst those concerned with such activities are continually seeking ways to modify tax regimes, close tax loopholes or coordinate tax rules internationally, I want to pursue a different set of questions. What is it about the modern corporation that allows it to act in this way in any case? What sorts of structures make the mechanisms of transfer pricing, borrowing from shareholders and suchlike feasible? What does it really mean to say that a corporation with a head office in, say, the UK or the US can locate subsidiaries with different operations in different countries?

128  Topics in scientific ontology What are a subsidiary, a head office and all the other numerous familiar sounding, but rarely examined components (e.g., a holding company) of a modern corporate structure; and what is the nature of the relations that binds them? In fact, three-quarters of a century after Ronald Coase (1937) first ­questioned ‘the nature of the firm’, there is little evidence of much agreement amongst economists, corporate governance theorists and others even as to the nature of the basic entity in question, let alone of the firm in its complex modern incorporated multinational forms. Here my focus is specifically on the nature of the modern company/corporation. Suspecting that the focus ought to be more on seeking ways to destabilise rather than to harness (relationally steer) the corporate mechanism, I am interested in questioning the structural features that underpin the widely held assessment that the corporate mechanism, which so clearly bears on widespread social change, is too often beyond the control of regulatory bodies, sometimes to the point of appearing to be almost out of control. What then are the basic structural conditions? My thesis, as I say, is that central to it all is a somewhat bizarre matter of social positioning. However, defending, and indeed explaining, this claim requires a good deal of initial ontological elaboration. I turn now to the latter.

3  Social positioning A fundamental – indeed integral and constitutive, if often barely ­recognised – feature of all social life is a pervasive, if always changing, structure of social positions with various associated properties. In consequence, an equally fundamental, if again often unrecognised, feature of social life – a factor at the heart of many mechanisms of human development, including large-scale social change – is processes whereby such positions and their properties are created, reproduced, transformed and, no less significantly, allocated. This is a thesis I have elaborated elsewhere (e.g., Lawson, 2012 [Chapter 2 above], 2013 [Chapter 7 below], 2014a). I will argue that it is this very matter of positioning that lies at heart of the ­beyond-control, and the often held to be out-of-control, mechanisms that are the properties of the modern corporation. As I am now turning to systematising a thesis in social ontology, let me seek to clarify my use of various terms. By the ‘social realm’, I mean the set of all phenomena whose existence necessarily depends upon human interaction. Social phenomena are thus emergent, meaning novel or unprecedented in the sense that prior to human interaction, they did not exist. Elsewhere, I have defended a naturalistic conception of emergence whereby novel phenomena at all levels of reality arise as (novel) organisations of (albeit perhaps involving modifications to) elements of reality that were already in existence11.

The modern corporation  129 There are essentially two general types of emergent social entity along with their equally emergent organising (social) relational structures that concern me here, both of which regularly evolve novel forms12. The first can be called artefacts, consisting mostly of organisations of physical components, with the latter components themselves constituted as organisations of elements that pre-existed them etc. The second type of emergent is constituted by organised sets of human individuals and artefacts. These can be called communities and will typically include smaller or nested (sub) communities amongst their components. In the case of communities, individuals are bound together through their occupation of a subset of a potential multitude of positions formed within, and structuring, any community, and linked via matching, possibly multiple, sets of rights and obligations (each relating to an associated [set of] collective practice[s]). In other words, positions such as university professor, university lecturer, student, university administrator etc. are constituted in (internal) relation to each other, the relations taking forms of rights and obligations. Thus, being positioned, as I am, as a Cambridge academic, I am a bearer of the associated (positional) rights to use university facilities – including an office, libraries, lecture halls and internet facilities – receive a salary and so on; just as I am the bearer of the obligations to give lectures, set and mark exams, give supervisions, sit on administrative including library committees and so forth. In each case, the rights I can access are matched to obligations borne by other parties, just as my obligations are matched to, and so facilitate, rights enjoyed by others. Thus, some others have the obligations to maintain the university facilities – including libraries, offices, lecture halls and internet resources – to which I enjoy access; just as students have the rights to attend lectures and expect their exams to be fairly assessed etc. The rights and obligations that relate the various position occupants to each other are (positive and negative) positional powers. They are powers in the sense that the agents of rights (positive powers) have the causal capacity intentionally to get others, the subjects of those rights (those that bear the relevant linked obligations, or negative powers) to do something whether the latter want to do that something or not. Obligations give reasons for action (that are additional to, and independent of, the preferences of individuals so positioned), and power exists so long as the subjects in question are willing (and able) to fulfil their obligations. Clearly, all ­social relations that consist in matched positional rights and obligations are power relations. The point of them is to enable and encourage the positioned individuals to serve the needs of the system in which they are components. Notice that the social identities of different human beings depend on the (unique set of) positions occupied, where the positions are properties of the communities to which the individuals belong. A given individual is

130  Topics in scientific ontology (takes on the social identity of) a university lecturer if positioned as a university lecturer, a prime minister if positioned as a prime minister, a UK citizen if positioned as UK citizen, a queen, bus driver, football manager, doctor, ballerina and so on if appropriately positioned. To distinguish ­position from occupant, I will henceforth capitalise the first letter of the former (so that a lecturer occupies the position of Lecturer). Social identities of artefacts are acquired in the same way: through being positioned in a relevant community. Various complexly designed pieces of paper and/or bits of metal may be constituted as cash (notes and coins) or as passports or wedding rings etc. in a particular community if appropriately positioned. Even a building constructed to serve, say, as a church may be identified instead as a home if appropriately positioned, or a piece of land as a university car park, and so on. Of course, with the positioning of an artefact, the rights and obligations that regulate how it is used, and so its community or system function(s), are acquired or born by (not the artefact itself but) participants in the communities in which the artefact is positioned. Thus, the use of a space positioned as a university car park will be regulated by rights and obligations falling on individuals both within the positioning academic community and beyond. 3.1  Mechanisms of social change If this is the conceptual framework, why do I suggest that positioning can be a significant mechanism of social change? That is, why do I suppose that processes whereby such positions and their properties are created, reproduced, transformed and allocated are or can be mechanisms of social change, including of very significant social change? Looking at it first from a different angle (or direction of causation), it is of course hard to imagine significant social change that did not result in processes whereby such positions and their properties are created, ­reproduced, transformed and allocated. Revolutions including popular uprisings necessarily involve the creation and or transformation of social positions. This is even, or perhaps especially, so in the case of technological revolutions, where it is the case both that new positions are found for emergent artefacts with novel capacities, or the latter are substituted for old artefacts, and that positions for skilled operatives are rendered redundant or transferred in location (see Lawson, 2014a). But change can come about merely through, and as a result of, repositioning. The positioned components of communities include intentional human beings, and the latter are able actively to seek occupancy of more powerful positions or to transform the powers associated with those positions that are already occupied, or even to relocate across the globe the positions of an established community. Matters related to positioning are

The modern corporation  131 usually contested, especially in the workplace. Although it is possible to imagine forms of human society in which the structure of power relations is (as, say, in many households) designed with the aim of facilitating human flourishing (see Lawson, 2014b), this is not the nature of capitalism. Rather, the system is all about the pursuit of power over others where the flourishing of those others is very often barely a consideration13. In this manner, changes in technology are harnessed by those in power in ways that transform the labour processes worldwide, often resulting in untold damage to the lives of many that are involved (see Lawson, 2014a). If all this is easy to see with a little systematic focus, and indeed fairly well understood, I think there are important cases where this is less so. One most significant example of the latter is that of the modern company/ corporation. Strangely, although the corporation is the site of an extraordinarily powerful set of mechanisms of social change in the modern world, the structures at the heart of its workings appear to be relatively unexplored. What then does lie at the basis of the corporation? The feature that underpins all the more consequential, and especially destructive tendencies of the corporation, I believe, is the simple (if counterintuitive) fact that in law, the corporation is, in all its business activities, regarded as a bearer or agent of rights and obligations just as are positioned human individuals. Indeed, it is a bearer of rights and obligations originally designed and intended only for human beings. The corporation is frequently even able to claim to be a subject of natural rights legislation intended for the protection of human individuals. In short, the corporation is positioned in society as a legal person. Let me elaborate upon all that is involved here, including how the situation that pertains allows the sorts of manipulative activities described above, as well as how this situation was always historically contested and never an inevitable outcome. 3.2  The positioning of communities I earlier noted that human beings are always socially positioned in h ­ uman communities, as indeed are many artefacts. I now observe that any community itself can also be so positioned, albeit in a wider community. Indeed, for a group of people to function as an ordinary business partnership, or a charity, or a school, in modern societies such as the UK, they have to be appropriately positioned as such. The basis and nature of such positioning have changed over time, but in modern societies the process of ­positioning – in regard to both the structuring of the positions themselves and the allocation of occupants (communities) to them – is a legal affair. Firms, charities, schools etc. are in the end legally constituted. We have seen that when an artefact is positioned as, say, a traffic beacon, a chair or a certificate of some kind, with certain of its causal capacities thereby interpreted as is characteristic of a (system) function set, its use is

132  Topics in scientific ontology regulated by rights and obligations that fall on human participants in the wider positioning community. And we have also seen that when, in contrast, a human individual is positioned in the community, say, as a judge or a prisoner, it is the human position occupant who becomes the agent or bearer of powers associated with that position. The question to pose, then, is: which of these models applies when it is a community that is socially positioned? In most cases, or in the first conceptual instance at least, the answer is that the positioning (registering) of the community as a firm parallels the positioning of an artefact. That is, a set of emergent powers of the community in question becomes interpreted as its characteristic function set (according to how this particular community comes to function in the wider, typically national, community), and the operations of the firm are regulated by rights and obligations born by individuals within the firm and the wider community. Thus, at least in the modern UK, an ordinary business partnership (as with all other forms of what are generically referred to as firms) is a p ­ articular community concerned characteristically with the coordinated production and/or distribution of goods and/or services to be sold to others in a manner that is intended to be advantageous to at least some of its members. And the rights and obligations that regulate how the community can function fall on individual community participants, being legally constituted. However, and significantly, any such positioned community can be further positioned through a process known as incorporation. When this happens, the process instead parallels the positioning of a human individual. For in this case the community qua a totality acquires a set of rights and obligations. To understand this process, I need to elaborate three ontological notions, specifically those of multiple (vertical) positioning, of legal fiction and of legal person. 3.3  Multiple (vertical) positioning Multiple positioning, as the term suggests, occurs when multiple positions are occupied by the same occupant simultaneously. Thus, a human being may simultaneously be positioned as a marriage partner, an employee of company X, an organiser of the local dance community, an aunt and so on. Multiple vertical positioning occurs when the positions occupied are effectively nested in (or nesting of) each other. Thus, an individual may be positioned as a UK citizen, a member of university X, a member of the local social ontology group (XSOG), the secretary of XSOG and so on. An artefact incorporated as a community component may also be multiply positioned. A computer may simultaneously function as a timekeeping system, a system of mailing, a music system etc. Any artefact may also be multiply vertically positioned – for

The modern corporation  133 example, where an artefact positioned as a table in a Cambridge College’s dining room is further positioned as the College’s ‘high table’ etc. Clearly, when an artefact is allocated to a position that is additional to, and nested within, any already occupied, its additional function set or usage is determined by the allocation of further rights and obligations to community members regarding its use; whereas when a human individual is allocated to a position that is additional to, and nested within, those already occupied, the acquired functions of the individual are facilitated by an additional set of rights and obligations being acquired by the position occupant herself or himself. The strange case of the incorporation of a community is that it involves a hybrid process. First, when positioned as an ‘ordinary’ – that is, an unincorporated business – the process matches that of the positioning of an artefact; but with additional positioning through incorporation, the process matches that of the positioning of a human individual – with a set of rights and obligations acquired by the firm itself. To further elaborate this situation, I need first to outline the notion of a legal fiction. 3.4  Legal fiction A legal fiction is usually interpreted as something like a ‘fact’ assumed or created by courts or other regulatory body to enable a legal rule to be applied in a manner for which it was not designed or intended. Mostly, as far as I can determine, the term is used where the outcome is somewhat more specific in that some person or entity is allowed occupancy of a position in order to achieve access to a set of rights or obligations that were never intended for such a person or entity. Certainly, this is a dominant case. Consider the following illustration. In the UK, any member of ­Parliament (MP) sitting in the House of Commons is technically forbidden to resign. The reason for this is historical. Four hundred years ago or so, being an MP was considered an onerous task and resignations were a frequent occurrence. However, MPs were given a trust to represent their constituencies, and in consequence a law was passed in 1624 removing the right for an MP to resign. In modern times resignations are not such a problem, but still they remain technically forbidden. To make resignations nevertheless possible in practice, a legal fiction is employed. At the time the law forbidding resignations was introduced, and indeed for a good while thereafter, the Crown and Parliament were frequently at odds and in competition with each other. In consequence, anyone in an office of profit under the Crown was not easily trusted by parliamentarians. Occasionally, though, such offices came to be occupied by a few MPs themselves. Because this dual occupancy was considered likely to compromise the MPs in question, an exception was made to the earlier law regarding resignations. More specifically, by a provision of an Act of Settlement 1701 (repealed in 1705 and re-enacted in modified form by the Place Act of 1707), an

134  Topics in scientific ontology exception was created to the restriction on resignation. In fact, the MPs in question, who accepted an office of profit under the Crown, were actually obliged to resign from Parliament (and forced to seek re-election if they wished to stay an MP). Of course, at the time, being in the pay of the Crown usually involved a demanding commitment in an office that was not easily ­available to most people. This, though, was, and has remained, the only exception allowed to the rule that resignations from Parliament are forbidden. With the passing of time, such offices of the Crown (for which resignations are allowed and indeed compulsory) became less important and indeed often no more than titles. They included sinecure posts such as that of the stewardship of an estate that involves negligible if any duties or profit. They remain in the Crown’s gift nonetheless. This being so, in due course the legal fiction was invented whereby any MP who wished to resign simply applied to the Crown for such an office. During the course of history, various offices have been used for this purpose, though only two are provided for in current legislation. These two are the Crown Steward and Bailiff of the Three Chiltern Hundreds of Stoke, Desborough and Burnham, and the Crown Steward and Bailiff of the Manor of Northstead. These are only nominally remunerated and reside currently in the formal gift of the Chancellor of the Exchequer. On occupying such a position, the individual (who thereby resigns from Parliament) usually holds the relevant office until it is again used to effect the resignation of an MP. The two positions noted above are used in this way alternately. When more than two MPs wish to resign at the same time, the resignations are interpreted not as being simultaneous, but as spread throughout the day, each member holding one of the offices for a very short period, measured in hours or perhaps minutes14. So, to repeat, a legal fiction refers to a device whereby a position or ­status intended to apply to one set of occupants is, along with any associated rights and obligations, allocated to others of a kind for which the original position was not necessarily intended, in order to achieve a specific outcome. 3.5  Legal Person The term Legal Person names one such position that is allocated in this way. It is a position such that any occupant acquires the right to bear various other (albeit typically a restricted set of) rights and obligations that exist in a wider (typically national) community. Although sets of rights and obligations were originally intended only for human beings, they came in due course to be extended to specific communities through the legal fiction of their being positioned legally as (legal) persons. The reason for adopting this particular legal fiction has seemingly always been to achieve, in the first instance at least, a separation between

The modern corporation  135 those rights and obligations widely considered desirable as acquisitions for specific individual members of any particular community and others considered desirable as acquisitions for that same community as a whole, this latter understood as an irreducible entity and interpreted as a formally/legally separate one. It is via such a device that the modern company/corporation has come to be the agent of rights and obligations intended only for human beings. However, whatever the reasoning whereby the device was first constructed, the purpose certainly was not to facilitate the activities of the modern company/corporation, even though this is now a dominant application. An early example is associated with Pope Innocent IV (1195–1254), who used this ‘persona ficta’ as a means of separating the rights and ­obligations acquired by monks (who could own nothing, but could be sued for legal wrongdoings) from those other rights and obligations considered appropriate to allocate to their monastery (which, in becoming a legal person, could formally own assets but, in lacking a soul, could not thereby be considered negligent or be excommunicated). The way this effectively works (at least in modern times) is that the ­position of Legal Person contains two sub-positions, those of Natural ­Person and Juridical Person (also sometimes referred to as Juristic or ­Artificial or Fictitious Person), and within the position of Juridical Person are various other positions including (in the UK) the (limited) Company15. It is by positioning a firm as a limited company – a process that, as noted, is known as incorporation – that the firm qua company automatically acquires the status of a juridical and so a legal person. In this way a firm qua company acquires numerous rights originally intended only for human beings. These include those of owning assets (houses, boats, shares etc.), contracting, suing and being sued, and so on. The basic advantage of incorporation is that it allows the firm as a whole and the individual members considered separately each to be protected from the misdemeanours, financial failures and particular limitations of the other (humans die and pay death duties, but companies might last for centuries). The modern notion of limited company is an example. 3.6  The limited company/corporation Through incorporation, a company issues shares; with the most common form of company being a private company limited by shares16. This is an (incorporated) company whereby, in the face of financial problems, the shareholders’ liability is limited to the original value of the shares issued but not paid for. Thus, suppose a particular shareholder in the limited company has, say, 1,000 shares originally valued at £1 each. If the company fails, and at the time of its doing so the individual shareholder in question has paid for 100

136  Topics in scientific ontology of these shares, this means that he or she is liable only up to the original value of shares not paid for, namely £900. Importantly, he or she is not liable for the full loss of the company where the latter exceeds the shareholder’s investment. So in a company, shareholders, directors and officers typically are not liable for most of the company’s debts and obligations. Rather, any debts run up by the firm qua company are rationalised as the property of the company, not of the shareholders. For this reason, a company tends to be referred to as a business with limited liability17. In comparison, in the case of, say, an ordinary (unincorporated) business partnership, the partners are jointly responsible for all the liabilities of the business, such as loans, accounts payable, legal judgments etc. In similar fashion, because the company is considered legally separate from the community that is so positioned, the company and its assets are protected from the misdemeanours of individual members of the ­community and others closely associated, and in particular the shareholders. Where a shareholder is personally involved in a lawsuit or ­bankruptcy etc., a creditor of the shareholder cannot seize the assets of the company. Or rather the creditor can seize ownership shares in the company only insofar as they are considered a personal asset of the shareholder in question. A further benefit of incorporation is that ‘ownership’ claims (whatever their actual status) on a business are more easily transferred to others. Where a firm is unincorporated, the process of selling or giving away ownership claims can involve a complex process wherein property is retitled, new deeds are drawn and other administrative chores need to be undertaken. In the case of a company, all of the individual’s claims to ownership rights and privileges are represented by the shares of stock held, which can be easily and quickly transferred, usually merely through adding a signature. In turn, the ease of transferability of shares, along with limited liability, makes incorporation attractive to new ‘investors’. And of course, as incorporation renders a business a legally constituted component in a wider legally constituted totality, it provides access to a reliable body of legal precedent to guide owners and managers in their conduct. Significantly, it is the basic feature of limited liability – the fact that any debts run up or misdemeanours committed by the firm qua company are rationalised as the property or doings of the company per se, not of the shareholders – that explains the sorts of manipulative operations of companies noted at the outset. For, as legal persons, companies themselves can now be shareholders in other companies and so reduce their liability in any situation where these other companies, including their subsidiaries, get into trouble or are caught committing misdemeanours. Before exploring this issue and the possibilities opened up by incorporation, I first want to indicate that the situation that has emerged was in no way natural or inevitable, and it was certainly not uncontested.

The modern corporation  137

4  A brief history of the company/corporation Currently, the idea that a firm can be incorporated as a limited company is somewhat taken for granted. But it is worth recalling that even ­following the introduction of the idea of legal personhood into the UK, the path leading to the current situation has been anything but smooth. Contestation has longed raged over various issues, including the types of communities that could be positioned as legal persons; the specific rights and obligations that could be acquired for those that were so positioned; and which bodies were to make any relevant decisions relating to such ­matters. In particular, from the outset, and regularly since, the idea of granting legal-person status to profit-seeking communities has been severely resisted. A brief consideration of these matters is likely useful in conveying how the current components of the process of incorporation were never a natural unity, along with the possibilities of their transformation or disengagement. 4.1  The origins of the modern company Prior to the seventeenth century, the only communities in the UK that were positioned as legal persons and so qualified as corporations were in fact not-for-profit entities18; they comprised charities, which included schools, universities, hospitals, churches etc., and eventually municipal councils. As such, these corporations had various rights such as owning buildings, land and so forth. Each possessed a constitution, drafted and approved by the Crown or the government, setting out the incorporated community’s rights and obligations, along with the objectives it sought to attain. If a corporation acted inconsistently with its constitution – that is, if it acted ‘ultra vires’ (or beyond its legal powers) – the courts had the power to declare the offending actions void and unlawful. During this time, it was clearly ultra vires for any such charitable community to seek to undertake commercial activities in order to make a profit. When the UK’s first profit-seeking corporation, the (English) East India Company, obtained that status of a corporation in the early seventeenth century, it did so illegally; that is, it came to occupy the position of corporation not via any action of the Crown, government or the courts, but solely through the actions of its members. It happened that towards the end of the sixteenth century, the Crown granted charters of incorporation to ‘trade associations’. These not-forprofit communities thereby became corporations. As trade associations, they did not carry out trade in their own names, but were granted a ­monopoly over a specified area of trade. Business partners could become members of the trade association and thereby entitled to carry out business in that trade. However, any such partnership would trade separately,

138  Topics in scientific ontology with its partners sharing ownership of the firm’s assets, as well as responsibility for its activities. The English East India Company started as one such trade association. It received its royal charter in 1600, enabling its members to share in the monopoly of trade in the East Indies for the following 15 years. In the period that ensued, the individual members/partners took a highly significant series of actions. First, they started to amalgamate their stock until they became one large partnership, jointly owning all the stock and carrying out all the trade. Later, the ownership of this (jointly owned) stock was transferred to the company itself (which, being a corporation, was allowed to own assets). In place of their shared ownership of the stock of a business partnership, the partners acquired a share in the joint stock of the corporation. The corporation subsequently traded this stock in its own name and made its own profit, which was then distributed amongst the members/shareholders. In this way the East India Company became the first UK corporation to operate for a profit. Although the East India Company was clearly in this manner acting in an ultra vires fashion, this went unchallenged in the courts and elsewhere. In fact, until the Bubble Act of 1720, the Crown, on observing the apparent successes of the East India Company, granted charters to new companies expressly for them to trade as commercial corporations. In due course, new commercial corporations were formed by both royal charter and Act of Parliament in order to develop new patents and domestic trade, by this time seeking outside investors to provide the finance. But the situation, then as now, provided various opportunities for the unscrupulous easily to exploit and was not stable. By the start of the eighteenth century, highly suspect corporations were being unmasked where individuals were found to be merely masquerading as commercial corporations and fraudulently seeking out investors’ funds. In addition, the South Sea Bubble and other financial scandals of that time caused further losses to ‘investors’. With corporations bearing the responsibility (rather than shareholders), the victims could not easily get recompense; nor could the courts penalise them (e.g., as corporations could not be imprisoned). So the government felt it necessary that the corporations be reined in. Many in this period were wound up or nationalised. The Bubble Act of 1720 legislated that all commercial undertakings (not just in corporations) would be illegal that tended ‘to the common grievance, prejudice and inconvenience of His Majesty’s subjects’. The law also banned speculative buying and selling of shares; they could be bought only by persons genuinely taking over a role in running a firm. However, everything changed again between 1825 and 1856, as a series of Acts of Parliament relaxed the controls on the creation of commercial corporations. Modern companies, as noted earlier, are known as limited companies and it was during this period that limited liability became established.

The modern corporation  139 In 1825 the Bubble Act was repealed, allowing shares to be freely traded. In 1844 William Gladstone (then president of the Board of Trade) pushed through the Joint Stock Companies Act. This allowed companies to dispense with the need for a special charter; thereafter, they could be incorporated by a single act of registration. However, it did not include the right for shareholders of automatic limited liability, which was strongly opposed by many liberals. Limited liability came 10 years later in the 1855 Limited Liability Act, after a series of heated debates. This, however, carried various qualifications that were removed by the 1856 Joint Stock Companies Act, which allowed firms to obtain limited liability with ‘a freedom amounting almost to license’. The primary reason for the change in this period was the building of the canals and railways and similar projects requiring large agglomerations of capital. The way of achieving this was through chartered joint stock companies. By 1840, for example, 2,000 miles of railway track had been laid, entirely financed by chartered joint stock companies (Micklethwait and Wooldridge, 2003, p. 47). Even so, right into the late nineteenth century, the courts were still reluctant to give shareholders the full benefits of limited liability or indeed to recognise fully that profit-seeking corporations had a separate legal personality; and they made it clear in a series of rulings that in their view, the courts controlled corporate behaviour. However, developments were never smooth and there were a number of successful challenges to court rulings. None was more significant than the case of Salomon v Salomon and Co. Ltd. in 1897. Aron Salomon made and sold leather boots and shoes in his establishment in Whitechapel in East London. Eventually, he turned his business into a limited company. His wife and five eldest children became subscribers and two eldest sons also directors (to comply with the Companies Act of 1862, which required a minimum of seven members). Salomon took 20,001 of the company’s 20,006 shares for himself. The price fixed by the contract for the sale of the business to the company was £39,000. In an ensuing action the court found that this was ‘extravagant’ and not ‘anything that can be called a business like or reasonable estimate of value’. Transfer of the business took place in 1892. The purchase money the company paid to Salomon was £20,000. It additionally gave him £10,000 in debentures (in other words, Salomon gave the company a £10,000 loan, secured by a charge over the assets of the company). The balance paid went to extinguish the business’s debts (£1,000 of which was cash to Salomon). Soon afterwards, the company got into financial difficulties holding stock it could not sell. Salomon and his wife lent the company money and he cancelled his debentures. But the company needed more money. It succeeded in obtaining a £5,000 loan from a Mr. Edmund Broderip. But ­Salomon’s business still declined and he could not keep up with the interest payments. Eventually the company was put into liquidation. To cut

140  Topics in scientific ontology a long story short, when Broderip failed to realise his unsecured loans, he instituted an action claiming that Salomon was personally liable. The High Court and Court of Appeal held Salomon to be liable. However, upon appeal to the House of Lords, the latter overturned the decision, arguing that a company had been duly created and could not be deprived of its separate legal personality. Despite this, the courts continued to maintain the doctrine of ultra vires, in effect restricting how a commercial corporation pursued its activities. Only with the Companies Act 1989 was this action by the courts effectively ended. The Act required commercial corporations to continue to include a statement of their objectives in the constitution. But under Section 3A, the Act 1) permitted the corporation to state that it was a ‘general commercial company’ and 2) recognised the corporation’s ‘power to do all such things as are incidental or conducive to the carrying on of any trade or business by it’. Further, in Section 35(1) of the same Act, the law was transformed so that ‘the validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company’s [objects clause]’. So in short, over the course of 400 years, the state – which at first was opposed to granting corporate status to profit-seeking communities – at first imposed, but ultimately abandoned, all of the many devices and mechanisms designed to restrict corporate activity where the latter was perceived to be at odds with the public interest. If the idea of a for-profit company or corporation is currently taken for granted as a familiar component of the modern social landscape, such a strange entity has not been widely well-received at all for the most part of its own history. However, if the legal component of the regulatory system has tended to act as a negative feedback mechanism throughout the majority of corporate history, this is no longer the case in the contemporary world, as we shall see. Indeed, the legal system now in effect works as a positive feedback mechanism, accentuating features of the corporation that underpin both its ever-expanding power and any apparently out-of-control aspect of it.

5  The modern situation So how does all this bear on the observations made at the outset? Specifically, how does the conception elaborated illuminate the workings of the corporate mechanisms whose effects are so undermining of current taxation authorities? A central and relevant feature is that any corporation has a legal status that is separate from those of its individual members. An additional if related significant feature is that any corporation can establish a set of separate entities, perhaps situated in different countries, legally own the latter’s shares and thereby constitute each of the latter as (seemingly partly or wholly owned) subsidiaries, each with a separate legal status, where any such subsidiary

The modern corporation  141 can also spawn further subsidiaries ad infinitum. This means that a mechanism is in place for generating structures that provide opportunities for endlessly transferring liabilities in a dazzling variety of ways. A component of such a structure may even be a simple holding company, which typically does not produce any goods or services itself; rather, its purpose is merely to own shares of other companies. Specifically, it owns their outstanding stock (stock or shares outstanding refers to all the financial assets or shares that have been authorised and issued by the company and not held by the company itself; those held by the company itself are termed treasury shares; shares outstanding plus treasury shares together comprise the number of shares issued). So, by endlessly exercising the rights of legal personhood, all multinational companies can, and do, organise their operations through multiple subsidiaries; they organise their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries. However, subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation and liability. As a result, with a parent company and any subsidiary being regarded as separate entities, it is entirely possible for one of them to be involved in legal proceedings involving bankruptcy, tax delinquency, indictment and/or otherwise be under investigation, while the other is not. In other words, a subsidiary can sue and be sued separately from its parent and its obligations will not normally be obligations of its parent. Such relations have only to be stated for possibilities of abuse through the shuffling of both existing liabilities and, perhaps especially, expected future liabilities to be imagined. This, of course, stretches beyond tax liabilities to liabilities for destruction and corporate murder, amongst much else. Murder and personal injury are actually important issues to raise in this context, given how many people are killed or injured as a result of corporate activity. Although courts often use precedents set for human beings in deciding cases relating to corporate rights and responsibilities, criminal courts have found that companies cannot be held liable for ­murder – or indeed for any criminal acts requiring intent – because they do not have a state of mind. This latter assessment may appear reasonable when taken at face value. However, the courts seem to recognise a state of mind in allowing that corporations can be aggrieved by the actions of others and permitted to sue for defamation. They further appear to recognise a state of mind in allowing that corporations have the right to freedom of expression. Thus, corporations sued for misrepresentation in media and other outlets need not demonstrate that what they said was true, but merely have to establish that they have the right of freedom of expression. The latter powers are either facilitated or bolstered by the fact that in some countries, companies claim rights under human rights acts. Thus, according to the 1998 UK Human Rights Act, for example, incorporated

142  Topics in scientific ontology companies can claim a right to a fair trial, and cannot be forced to incriminate themselves, meaning they have a right to withhold or conceal relevant documents in cases contested in law. Of course, even where a company is found liable for something, it cannot be imprisoned or set to work in the community; in practice, the only punishment typically meted out is a fine – something it can usually easily afford, the expectation of which will frequently have been built into its undertakings. If, however, there are circumstances where a company cannot pay its fines or otherwise seeks to avoid doing so, the losers will not be the shareholders. For limited liability means, as we have seen, that the shareholders are not responsible for the company’s debts beyond the value of shares yet to be paid. Nor can shareholders be held responsible for any civil or criminal offences that may have been committed. Rather, in such cases the company typically avoids paying not only its numerous creditors, but also any wages that may be owed to workers, as well as civil damages. Meanwhile, and for essentially the same reasons, corporate decision makers are extremely unlikely to be held responsible for the consequences of the corporate mechanism. So a company, or its set of director agents, ultimately has every incentive for it, or one of its subsidiaries, to take manifestly irresponsible, ­potentially damaging and even life-threatening risks where the possible potential benefits are significant. Indeed, if or where it is maintained (however erroneously) that there exists a legal obligation for the corporation to serve the financial interests of its shareholders (a matter I turn to below), it could well be argued that it ought to. For where the risks pay off in the sense that significant profits are realised, the shareholders benefit substantially; where things go wrong, even terribly so, these same shareholders have very limited liability. To illustrate how this can work in practice, consider the case of Cape ­Industries plc, a UK-based company that between 1953 and the late 1970s operated the US-based marketing subsidiary North American Asbestos ­Corporation (NAAC) to trade in asbestos. Other subsidiaries of Cape mined asbestos in South Africa. This was shipped to NAAC based in Texas. Over the years, groups of workers of NAAC became ill after handling the asbestos, and in the early 1970s they brought an action against NAAC, being awarded damages of $5.2 million. Rather than pay the damages, NAAC went into liquidation, with its operations taken over by a new marketing company, Continental Productions Corporation (CPC), funded, but not owned, by Cape, operating on the same site as had NAAC and with the same managing director (who also held all the shares). With Cape holding no assets in Texas, the workers sought to bring an action against Cape ­(Adams v Cape Industries plc [1990]) in the UK on grounds of j­ustice – namely that it was only fair and reasonable that Cape be held liable for its former subsidiary, which it had clearly liquidated to avoid paying damages.

The modern corporation  143 The court, however, for just the sorts of reasons discussed above, found that Cape was not at all liable in law. In so ruling Lord Justice Slade reasoned as follows: save in cases which turn on the wording of particular statutes or ­contracts, the court is not free to disregard the principle of Salomon v. A Salomon & Co Limited [1897] AC 22 merely because it considers that justice so requires. Our law, for better or worse recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities […] If a company chooses to arrange the affairs of its group in such a way that the business carried on in a particular foreign country is the business of its subsidiary and not its own, it is, in our judgment, entitled to do so. Neither in this class of case nor in any other class of case is it open to this court to disregard the principle of Salomon v. A Salomon & Co. Limited [1897] AC 22, merely because it considers it just so to do. Such decisions may not be stable19. But they clearly indicate the sorts of possibilities that arise, given the modern structure of interlinked but ­(often internationally) separate legal entities, each claiming legally limited liability. In truth, the permutation of possibilities seems endless. Of course, the law – like any other social structure – is being repeatedly transformed. But so long as companies can combine the advantages of control over ­decisions, legal separateness, limited liability and legal personhood, opportunities for shifting, avoiding and/or trivialising liabilities of all kinds are clearly always available.

6  The question of control Why precisely, though, does the modern corporation sometimes give the appearance to many of being not only beyond control of regulatory authorities, but also in a real sense out of control? The answer is that there is often no agency that feels or acts as if it can easily assume responsibility for corporations’ actions; certainly, none that feels it must. Let me ­elaborate this claim. One significant party, of course, is the body of shareholders. It is often held that legally the shareholders own the firm; though in fact they do not and indeed the very notion of ownership of a community is really nonsensical. In fact, the shareholders typically have very little, if any say in the day-to-day decision making of the corporation. Of course, it is ­frequently the case that dominant, or anyway many significant, shareholders are themselves other corporations (e.g., in 2009 so-called ‘institutional’

144  Topics in scientific ontology investors collectively ‘owned’ 73% of the outstanding equity in the 1,000 largest US corporations20), not at all well placed to take part, even in principle, in everyday decisions. The feature that is most relevant here is that the shareholders are limited in their liability if things go wrong. But this is a far cry from supposing that they determine what happens. Another significant party is the board of directors of any company, in whose hands lies the task of day-to-day decision making. However, the dominant modern interpretation of the law, certainly in the UK, has it that no matter how responsibly or morally minded any of the individuals involved may be, the duty of those directing the day-to-day affairs of the corporation is to serve the interests of the shareholders. This actually is not formally the case. However, both economic and legal theory have long played a significant role in creating the impression that it is. Analyses of the firm emanating from economics over the years, originally inspired by Coase (1937), have focused on providing very ­particular (functionalist) explanations of the existence of the firm. In ­tandem, contributors to legal studies or corporate governance, inspired especially by the ‘law and economics movement’ associated with Richard A. Posner (1972), have tended to accept (in an overly uncritical fashion) these contributions from economics as realistic, and sought in turn to use them in their interpretations of the legal system. Specifically, they have used these assessments from economics in their efforts both to reveal the economic structure of the legal framework underpinning the firm and to seek ways to theorise, and thereby reinterpret or otherwise modify, the workings of relevant aspects of the legal system so that it better facilitates the firm’s functions as identified in economics. Since the mid-twentieth century, the dominant of the two basic ideals for the firm qua incorporated entity that have most influenced the suggested reforms of legal theorists is the shareholder ideal that all activities within the firm are ultimately the responsibility, and for the benefit, of the shareholders (the alternative being the stakeholder ideal that companies are responsible to a wide range of groups in the wider community). Thus, an assessment that has no doubt been inspired by, and co-evolved along with, the emergence of the modern corporation acts through legal theorising and the latter’s impact on the courts to reinforce the conditions that render the firm uncontrollable. Furthermore, many suppose (again erroneously, and once more under the influence of results from economics) that the legal system insists more specifically that the primary legal obligation or purpose of the corporation in serving the shareholder interest is to pursue maximal profits for (in ­order to pay maximal dividends to) shareholders. There are, of course, concerned individuals located at all levels of corporate structures, and it is probably reasonable to accept that it is not merely cynics within the corporation (out to pull the wool over customers’ and the general public’s eyes) that promote the idea of

The modern corporation  145 corporate social responsibility. This is the idea – inspiring indeed a wide and ­much-discussed ­movement – that corporations should build into all their decision making a concern for achieving/maintaining conditions for meeting human needs, including a concern for the environment. But whether or not, or whatever the extent to which, such is possible in a competitive environment, these ideals can have little impact if received in a context where the dominant view is that legally, companies are primarily responsible to shareholders. So the result very frequently is a situation where neither the directors nor the shareholders nor any other body has, or feels it has, much say in the nature of overall objectives of the corporation. In this sense there is, or can be, an effective power vacuum within the corporation, with no one placed, or thought to be placed, with the responsibility for rendering the corporation other than a seemingly uncontrollable profit-seeking juggernaut. In this way, then, an impression is easily, and indeed seemingly ­frequently, gained that all members of the community are agents of a system that no one controls. Even the totality of the internal members of a corporation are not in control, simply because they are not organised to be so. There is no clear power centre, no core or hub of responsibility or autonomy, nowhere for the buck to stop. Shareholders, to repeat, typically have zero control on what the firm does on a daily basis. The directors have some day-to-day control, but are considered to be legally obliged to serve the profit interests of the shareholders. In short, from a shareholder point of view, all doings – including h ­ armful ones – are the responsibility of the directors, and in any case shareholders are not liable. From the directors’ point of view, moral concerns cannot come into it, because their only (or primary) responsibilities are to seek profits to the advantage of the shareholders. This is the prevailing ideology. And under its influence, the corporate juggernaut rolls on. Rebecca Spencer (2004) of Corporate Watch is not far wrong when she summarises the situation as follows: The vacuum at the heart of the corporation harnesses its managers’ and employees’ intelligence to aims which their consciences would otherwise abhor. Far from calling itself a human being, the corporation for all its power is a mindless predator, a super-brute, with a single, self-centred, self-expanding aim - to act in its own best interests. (2004, p. 18) Except that it is not really clear what are the corporation’s ‘own best interests’, apart from the received, if ultimately erroneous, consensus that – in law, at least – this means doing whatever it takes, including transforming the whole global economic system, to better facilitate the pursuit of ‘profit’ in order to service the shareholder interest.

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7  Final comments and conclusion The corporation is a familiar feature of the modern world. The seemingly natural response to any of its workings by all other affected bodies is thus to seek out ways of accommodating and/or harnessing the corporate mechanism. It is to transform our relations to it, in a manner that seeks to advance the interests of us all; a form of relational steering. I am suggesting that as things stand, this may not be feasible. For whether or not the modern corporation is truly out of control, the huge degrees of freedom that result from its fundamental structure mean that, given the prevailing legal interpretations at least, it functions more like a badly designed mechanical device that warrants restructuring rather than something that can be harnessed. At the core of the corporation and grounding the corporate mechanism is a process of social positioning that takes an unusual form. It is a ­process of positioning of a community (organised in the first instance to be constituted as an ordinary firm) to render it a legal person, legally separate from its various members, and the possessor of rights and obligations (originally intended only for human beings) that are irreducible to those of others. If the corporate mechanism is ever to be restrained or otherwise rendered more humanity friendly, it is these underlying processes of ­positioning that likely need to be reassessed. This requires, however, that we revisit questions which have been raised against the incorporated business firm throughout the last 400 years. What sorts of communities, if any, should be situated as incorporated companies via the legal fiction of the Legal Person in the form of the Juridical Person? If some business communities are to be so positioned, what are to be the rights and obligations made available to them and who is to decide? In particular, is it possible in law to ensure that the corporation has no access to rights secured in bills of human rights; or to extend the financial and other liabilities of shareholders? And so on. I do not doubt that any attempts to transform these basic structures, were they to emerge, would be met with the full force of corporate power. They would also be difficult to coordinate internationally. This in part is why the corporation currently faces only the very restricted attempts at regulation or relational steering noted earlier. But at the very least, these matters warrant systematic discussion. After all, the resulting situation, the nature of the modern corporation, was hardly an inevitable and uncontested outcome, and the stability of evolved structures at least ought to be intellectually challenged. Alternatively, some mileage may be achieved from recognising that there is nothing in law that requires a corporation to prioritise ­shareholder interest, including seeking the greatest profits. Such recognition in itself would resolve little, of course. But if accompanied by a further recognition that the corporation is essentially a community, it may allow

The modern corporation  147 experimentation with the idea that all the latter’s various members’ interests might drive the company objectives. This would likely warrant a turn to something like the stakeholder conception of the firm currently being urged in various quarters21. Finally, if it proves to be the case that a relevant structural transformation of the modern corporation is all too difficult, whilst the prevailing ideology is overly obdurate, it may instead be possible to divert attention to the fact that the position of Legal Person includes not only that of Juridical Person, but also Natural Person. The point of this would be to strengthen the powers of resistance of the human occupants of the latter, through acknowledging the latter’s rights to conditions of flourishing, including a clean, safe and healthy environment and adequate levels of health and safety at work. This would implicitly place obligations on the corporation not to violate these rights (just as rights of property for any given individual [e.g., home ownership] entail implicit obligations on all others not to violate them). If the interests of living beings and corporations conflict, as seemingly they frequently will, there is a chance of the courts finding in favour of the former. A small suggestion and a highly speculative one, I know. I throw it in the hat not with any real conviction, but to indicate the level and sort of discussions that may be required if existing challenges are to be meaningfully addressed. Meanwhile, I see no immediate ­prospect of preventing the juggernaut that is the corporation from lurching along in its always potentially destructive, globally transforming, if seemingly mindless way.

Notes * First published as Tony Lawson (2015), ‘The modern corporation: the site of a mechanism (of global social change) that is out-of-control?’, in Archer, ­Margaret (ed.), Social Morphogenesis: Generative Mechanisms Transforming the Social Order, New York: Springer, pp. 205–230. † I am very grateful to the Independent Social Research Foundation for funding the research on which this paper draws. I am also grateful to participants of the Morphogenic Workshop for helpful comments when I first presented a draft of this paper at its meeting in Oxford in January 2014, and to Margaret Archer for further comments on a revised draft. 1 I myself discuss these sorts of issues in Lawson, 2014a. 2 The UK TV public was recently (12 November 2012) treated to the spectacle of executives from Starbucks, Amazon and Google appearing before the UK ­Parliament’s Public Accounts Committee to explain why, despite their extensive operations in the UK, they appeared to make relatively little profit. The event was described by the BBC News Business as follows: Three executives from large multinational corporations were ritually flagellated by Parliament’s Public Accounts Committee as penance for the ­alleged tax sins of their employers. Starbucks’ head of finance, Troy ­Alstead, was forced to portray his company as a perennial commercial flop, in order to account for its peculiar failure to record a taxable profit in the UK for 14

148  Topics in scientific ontology out of the last 15 years. He was followed by Amazon’s ­Andrew Cecil, who was reduced to stuttering when he was accused of being ­“pathetic” for his inability to disclose something as basic as how much of his firm’s ­European sales came from the UK last year. Last up was Google’s Matt Brittin. In contrast to his two peers, Mr Brittin did not seek to evade or apologise. Yes, of course Google minimises its tax bill, by operating in Bermuda and Ireland, he said. Google had a duty to its shareholders to minimise its costs. And besides, the UK still benefited from Google’s many free products, not least its search engine, which were engineered by thousands of employees in California. Available online at www.bbc.co.uk/news/business-20580545 on November 07, 2013. In fact, a four-month investigation by news agency Reuters revealed that ­Starbucks reportedly paid just £8.6 million in corporation tax in the UK over 14 years – including reporting accounting losses when it was profitable. ­Google’s UK unit paid just £6 million to the Treasury in 2011 on turnover of £395 ­million, according to the Telegraph. The UK’s biggest online retailer, Amazon ­generated sales of more than £3.3 billion in the country in 2012, but paid no corporation tax on any of the profits, according to the Guardian. Facebook in the UK paid £238,000 in tax in 2012, according to its accounts, with most of the ­company’s income believed to be legally going through its European base in Dublin, where corporation tax is lower than in the UK. Apple paid less than 2% corporation tax on its profits outside the US, paying $713 million (£445 ­million) on foreign pre-tax profits of $36.8 billion. US auction site eBay paid only £1.2 million in tax in the UK, according to an investigation by the Sunday Times. 3 See, for example, Bakan, 2004; Corton, 1995; Drutman and Cray, 2004. 4 This is an overall assessment widely recorded and usefully summarised by Lee Drutman and Charlie Cray on the cover of their 2004 book People’s Business: Controlling Corporations and Restoring Democracy, where they record ‘the widespread conviction that corporations are increasingly out of control, with potentially dangerous consequences for the communities where they operate, their own employees, and even for their owners, the shareholders’. See also Bakan, 2004; Corton, 1995. As a representative of the (literally) millions of bloggers that have formed a similar assessment, Ralph Nader (2002) warns that ‘Big corporations are out of control, in large part, not only from the law, consumers, workers, communities, but from their own owners’ (found in November 2013 at www.nader.org/interest/032802.html). 5 Clearly on this conception, a given causal mechanism can be associated with different outcomes each time it is triggered. It is thus not event, outcome or explanation oriented, even though explanations of outcomes or events will be associated with (typically numerous) causal mechanisms; rather, the concept of a mechanism refers back to the emergent structured entity of which (when triggered) it is a property. As such, a mechanism is associated not with regularities at the level of actual outcomes, but with effects or tendencies, which will, or can, participate along with numerous other possibly countervailing tendencies in determining actual outcomes. Although (to use a mechanical [non-social] example), the gravitational mechanism may affect the path of the autumn leaf, the latter may still fly over rooftops as a result of the combined effects on its path of numerous often countervailing operative mechanisms. 6 There is a provision of the system of investor-state dispute settlement (ISDS) – a system through which investors can sue nation states for alleged discriminatory practices – contained in international trade treaties and international

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investment agreements, which grants ‘investors’ the right to initiate dispute settlement proceedings against a foreign government in their own right under international law. Examples abound of this provision being wielded by corporations either to prevent change (through a threat of suing) or to gain huge compensation after the event. As I write, tobacco company Philip Morris is using a trade agreement that Australia struck with Hong Kong to seek a vast sum in compensation for the loss of what it calls its intellectual property. This follows in the wake of the decision by the Australian government, validated by the ­Australian Supreme Court, to legislate that cigarettes should be sold only in plain packets, marked with health warnings designed to shock. When Argentina recently imposed a freeze on soaring household energy and water bills, the relevant international utility companies, whose vast bills had prompted the government to act, sued and forced the government to pay out over $1 billion in compensation. Currently a Canadian company is suing El Salvador for $315 million. This is for the loss of its anticipated future profits, after local communities managed to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. Meanwhile, Canadian courts revoked two patents owned by American drugs firm Eli Lilly. This was because the company had not sufficient evidence that they worked. In consequence, Eli Lilly is now suing the Canadian government for $500 million, and demanding that Canada’s patent laws are changed. In fact, as I write (early November 2013) the Tory-led UK coalition government is supporting a move to establish a Transatlantic Trade and Investment Partnership deal with the US that is intended to remove the regulatory differences between the US and European nations. If passed, corporations will similarly be able to obstruct numerous attempts by any UK government to intervene in the economy or polity on behalf of UK households (e.g., by freezing energy prices). Thus Starbucks, like many other companies concerned with the supply of coffee, sources its UK coffee from a wholesale trading subsidiary that is located in Switzerland, a country that charges a relatively paltry 12% tax rate on the trading profits. Google, meanwhile, takes advantage of the conditions offered in Ireland, locating its two data centres there, employing 3,000 people to coordinate marketing and sales of advertising space across Europe. In fact, Ireland, in recent times, has gone out of its way to lower tax rates in order to attract this kind of business. Working out the proportion of the surplus of a company such as Amazon that is actually generated in the UK (and therefore should be subject to UK tax) is not a simple matter. Currently, for example, when a customer buys a book ‘on’ Amazon.co.uk, the customer actually enters into a legal contract with, and pays the fee to, ­Amazon Luxembourg, where the VAT rate is just 3%. An example that affects the UK currently is known as the Eurobonds scheme. Various corporations (e.g., food chains Café Rouge, Nando’s, Pizza Express, Pret A Manger and Strada, and high-street retailers such as BHS, Maplin, ­Office and Pets At Home – see Corporate Watch, the Independent) reduce their taxable profits by borrowing from their ‘owners’ via the Channel Islands Stock Exchange. These ‘owners’ (mostly private equity funds) could put their money into acquiring additional shares in companies they are said to own. But instead of doing so, they lend the money to companies. The interest on the loans cuts the UK companies’ taxable income each year and the exemption – triggered

150  Topics in scientific ontology because the loans are listed on the Channel Islands Stock E ­ xchange – means the interest goes to the owners tax free. Thus, according to the Independent newspaper (November 14, 2013): Gondola Group - which owns Pizza Express, Zizzi and Ask - has avoided as much as £77m in UK corporation tax since it was bought by the Cinven private equity fund in 2006. Cinven loaned Gondola more than £300m at a 12.5 per cent interest rate but only invested £8m in equity. Instead of receiving the interest payments on the loans every year, Cinven has allowed it to accrue on the debt, compounding the amount taken off Gondola’s profits every year. When Cinven sells the restaurants, which it is reportedly considering, it can receive the £276.8m it is owed tax free. Gondola’s UK corporation tax bill last year was only £200,000, after an operating profit of £39m. In 2011, it recorded a tax credit of £5.8m. Cinven also owns Spire Hospitals and Partnerships in Care - healthcare companies that The Independent revealed earlier this week were using the same arrangement. Pizza Express and Zizzi have previously been criticised for their poor pay. Pizza Express sacked a waiter who revealed the company kept 8 per cent of tips as an “admin fee” in 2009 while in the same year Zizzi staff were paid £4.25 per hour before tips were added. Gondola did not give more up-to-date information on its pay. Tragus Group, which owns the Café Rouge, Strada and Bella Italia chains, may have avoided more than £13m in tax after accruing £47.7m in interest on 17 per cent Eurobonds it owes to the Blackstone private equity fund, which owns the group through a Cayman Islands subsidiary. The electronics retailer Maplin accrued interest of £68.9m in 2012 on borrowings from its owners, Montagu private equity. However, a spokesman argued that the majority of the interest cannot be taken off its tax bill following negotiations with HMRC. Interest of £361m has accrued over the previous five years, on top of the £137.5m it originally borrowed from Montagu at 16.5 per cent. It is unclear how much tax had been avoided because Maplin would not disclose the figures involved - or how long the interest had been disallowable for, but the potential savings could still be in the tens of millions. Sir Philip Green’s wife, Lady Green, brought BHS into the family’s ­Arcadia group, which also owns Top Shop, by investing through the ­Channel Islands Stock Exchange in 2009. The group deducted interest of £13.5m from its taxable profits in 2012, avoiding £3m. in tax. Pret A Manger owed £237.9m to its owner, the Bridgepoint private equity fund, at the end of 2012. The loans were listed with at a 12 per cent interest rate but a spokeswoman told The Independent that they were only allowed to deduct 45 per cent of the interest from their income with HMRC’s approval. They have since repaid £150m of the loans. Tim Hames, director general of the British Private Equity and Venture Capital Association, said: “The retail sector is one which has suffered deeply since the financial crisis. But there are at last signs of a genuine recovery, much of it brought about by putting investment to work and creating value.” A spokesman for BHS and Arcadia said the figures were accurate but gave no further comment. Tragus and Silverfleet Capital, which own Office, said they complied fully with all relevant legislation. Pets At Home said the company was acting within the law and had expanded its business. Nando’s said that the loans were the most efficient way to accelerate its growth in Britain. “Nando’s Group Holdings Ltd incurred corporation tax of £10.4m on an operating profit of £41.9m in the year ending

The modern corporation  151 February 2012. Nando’s growth has been funded by a combination of equity and debt,” a spokesman said. Gondola said it “works closely with HMRC to ensure that we pay the right taxes. Our structure is in line with a significant proportion of UK companies, in the high street and beyond. We are also a substantial contributor to the UK, having paid £200m in taxes in the last three years, created 3,200 British jobs and invested £300m in the last 6 years.” A spokeswoman for Pret did not dispute the figures but said it was “misleading” to call it tax avoidance. She said: “Pret pays a fair amount of tax given the business’s profit levels and its continued investment in growth, building more shops and creating more jobs. Our 2012 operating profits before interest were £22.5m and we paid £7.5m in tax.” See www.independent.co.uk/news/uk/politics/eurobonds-scandal-the-highstreet-giants-avoiding-millions-in-tax-8897591.html. 11 Thus elementary particles such as quarks arise as excitations of quantum field activity, and subsequently combine to form composite particles or hadrons, including protons and neutrons, collectively referred to as nucleons, where these combine with electrons to form atoms, which chemically combine to form molecules, where the latter bond, perhaps through collisions, to form proteins, water, planets and all life forms including ultimately human beings, who, to return to my current focus, interact to bring into being the relationally organised entities of the social world. 12 A third type that I will not be considering is language. 13 I suspect that it is not too contentious to observe that at the heart of capitalism are processes of capital accumulation, the drive to use money (capital) to ­create more money. But what is the nature of modern money? It is precisely a social relation, a relation of social power. It is in effect a (positional) credit/right and debt/obligation relation that holds formally between (those positioned as the) holders of (positioned) markers of money (e.g., notes and coins) and the body that is (positioned as) the legitimate issuer those markers. However, in the modern community an additional (positional) legal right of any holder of such credit is to be able to exchange it for any and all commodities (including labour power) that are available for exchange at conventionally agreed and/ or relative-power determined rates (of exchange). So capital accumulation is straightforwardly a process of power seeking (always over others), which has nothing necessarily to do with generalised flourishing. 14 The device or procedure in question, an example of a legal fiction, was invented by John Pitt when he sought to vacate his seat of Wareham in order to stand for Dorchester. In May 1750 Pitt wrote to the then Prime Minister Henry Pelham notifying him that he had been invited to stand for Dorchester, and asking for ‘a new mark of his Majesty’s favour’ in order to change his seat. Pelham wrote to William Pitt (the elder) indicating that he would intervene with King George II in support, and on 17 January 1751 Pitt was appointed to the position of Steward of the Chiltern Hundreds and was subsequently elected unopposed as member for Dorchester. 15 Communities other than firms can be repositioned, and specifically social communities other than companies can be regarded as juridical and so legal persons. Indeed, the notion of a legal person (which is now central to ‘Western law’ in both common-law and civil-law countries and can found in virtually every legal system) can apply to cooperatives; customer owned mutuals; ­charities, municipal corporations or municipalities; European economic interest groupings; sovereign states; various intergovernmental organisations (the  United Nations, the Council of Europe) and other international organisations.

152  Topics in scientific ontology 16 Other forms of company are a private company limited by guarantee, where directors or shareholders financially back the organisation up to a specific amount if things go wrong; a private unlimited company, where directors or shareholders are liable for all debts if things go wrong; and a public limited company, where shares are traded publicly on a market, such as the London Stock Exchange. 17 Of course, there are exceptions or better limits to limited personal reliability for those who own shares in a company. The latter shareholders may be held personally liable if, for example, they personally and directly injure someone; or personally guarantee bank loans or business debt on which the company defaults; or fail to deposit taxes withheld from employees’ wages; or intentionally do something fraudulent, illegal or reckless that causes harm to the company or to someone else; or treat the company as an extension of their personal affairs, rather than as a separate legal entity. In the latter case a court might decide that in this case the company as such does not really exist and find that its owners are in effect doing business as individuals who are ­personally liable for their acts. 18 The device of incorporation likely arrived in the UK as a result of the Norman Conquest. 19 For a discussion see Griffin, 2006, pp. 23–5. 20 See ‘Conference Board Report’, The Conference Board, 2010 Institutional ­Investment Report: Trends in Asset Allocation and Portfolio Composition, November, p. 22. 21 For an interesting recent contribution of this sort, that advances a similar sort of conception of the firm to that sustained above, arguing that the company should be viewed as a commons, see Deakin, 2012.

References Bakan, Joel (2004) The Corporation: The Pathological Pursuit of Profit and Power, ­London: Constable and Robinson Ltd. Coase, Ronald H. (1937) ‘The Nature of the Firm’, Economica, 4(16), 386–405. Corton, David C. (1995) When Corporations Rule the World, San Francisco: ­Berrett-Koehler with Kumarian Press. Deakin, Simon (2012) ‘The Corporation as Commons: Rethinking Property Rights, Governance and Sustainability in the Business Enterprise’, Queen’s Law Journal, 37:2, pp. 339–81. Donati, Pierpaolo (2013) ‘Morphogenesis and Social Networks: Relational Steering not Mechanical Feedback’, in Margaret S. Archer (ed.) Social Morphogenesis, New York: Springer, pp. 205–31. Drutman, Lee and Charlie Cray (2004) People’s Business: Controlling Corporations and Restoring Democracy, San Francisco: Berrett-Koehler. Griffin, Stephen (2006) Company Law - Fundamental Principles (4th Edition), Harlow and New York: Longman. Lawson, Tony (1997) Economics and Reality, London and New York: Routledge. Lawson, Tony (2012) ‘Ontology and the study of social reality: emergence, ­organisation, community, power, social relations, corporations, artefacts and money’, Cambridge Journal of Economics, vol. 36, no. 2, 345–85. Lawson, Tony (2013) ‘Emergence, morphogenesis, causal reduction and downward causation’, in Margaret S. Archer (ed.), Social Morphogenesis, New  York: Springer, pp. 61–84.

The modern corporation  153 Lawson, Tony (2014a) ‘A Speeding up of the Rate of Social Change? Power, ­Technology, Resistance, Globalisation and the Good Society’, in Margaret S.  Archer (ed.), Late Modernity: Trajectories towards the Morphogenetic Society, New York: Springer, pp. 21–49. Lawson, Tony (2014b) ‘Critical Ethical Naturalism: An Orientation to Ethics’, in Stephen Pratten (ed.), Social Ontology and Modern Economics, London and New York: Routledge, pp. 359–88. Micklethwait, John and Adrian Woodridge (2003), The Company: A short history of a revolutionary idea, New York: The Modern Library. Posner, Richard A. (1972) Economic Analysis of Law, Boston: Little, Brown and Company. Spencer, Rebecca (2004) ‘Corporate Laws and Structures: exposing the roots of the problem’, Corporate Watch, Oxford: Green Print.

5 A theory of money

1 Introduction What is money? Specifically, how is it constituted, and what is its nature? These are the questions addressed here. They have long been regarded as setting a puzzle, with commentaries such as the following not difficult to uncover: Let me then raise once more the vexed question - What is money? […] [there is an] ‘intellectual vertigo’ which has been said to attack all writers who approached this fatal theme […] (Sidgwick, 1879). Gladstone, speaking in a parliamentary debate on Sir Robert Peel’s Bank Act of 1844 and 1845, observed that even love has not turned more men into fools than has meditation on the nature of money (Marx, 1970, p. 64). The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it (Galbraith, 1975, p. 5). Fundamentally different answers to the question of the ontology of money have endured for at least two millennia […] (Ingham, 2011, p. 15). I am suggesting that social reality everywhere is constituted via processes of social positioning. These, to recall, are developments whereby certain individuals or things come to be formed into components of wider ­social systems or totalities. In each case, a space or position is at some point ­created in a manner such that some individual or entity, in being allocated to it, often acquires a status, but – more significantly – has one or more properties or capacities, already possessed, harnessed in a manner to serve in the functioning of the wider system of which the individual or item is incorporated as a component. If this is indeed how the whole of social reality is constituted, such processes will, of course, be as fundamental to the constitution of money as anything else. I will suggest that this is indeed the case: that money, or money proper, is constituted just as a positioned phenomenon, in the manner elaborated below. In short, I am proposing a positioning theory of money.

156  Topics in scientific ontology Actually, my concern is with specifically a successfully functioning money; and I am proposing a positioning theory that is explicitly oriented to accommodate the latter. The difference between money per se and a successful money will become clear in due course. What of money’s nature or, better, that of a successful money? By the ‘nature’ of any X, I mean those of its properties in virtue of which it is constituted as an X rather than something else. It is that set of properties that accounts for, or explains, those more immediate or nominal qualities by which something is commonly and most readily identified as an X1. Clearly, if my overall thesis is correct, the nature of any X, including a successful money, will depend upon the details of how it is constituted within the positioning process. The obvious way to proceed, then, is to first lay out the nominal features of a successfully functioning money, those by which it is regularly and initially so identified, and then to investigate their conditions and how they exist. Typically, a successful money is identified or distinguished as that which possesses general debt discharging and purchasing powers. So these generalised powers are the nominal features that I start from here and my objective is to account for them, to identify the nature and constitution of whatever it is that possesses them. Of course, I am, as noted, already supposing that at a general level, as with all other social phenomena, the social positioning process is likely involved. So my objective, more specifically, is to determine how precisely it might work, if it does, in the case of money. How might the process of social positioning produce something that possesses debt discharging and purchasing powers? Clearly, the noted nominal properties of debt discharging and ­purchasing powers presuppose that a unit of value measurement or assignment is ­accepted throughout a community, and that debts and commodity prices etc. are expressed in terms of it. It is evident, then, that the bearer of these powers, namely money, will figure as part of a community’s system of value accounting and payments; and that the unit of value, or ‘unit of account’, is a basic feature of such a system. This accounting unit will thus be a primary concept in any theory of money. Of course, the accounting or value unit is not the thing that bears the debt cancelling and purchasing powers; it is not money itself, or money proper. It is evident, though, that to identify the latter, to elaborate the constitution and nature of money, including a successfully functioning money, the relevant meaning here of ‘value’, of that which is measured or ascribed using the value unit, first requires some attention.

2 Value The notion of value operative in a monetary system stems ultimately from the act of desiring. To have value in the relevant sense is to be desired. Although value is individual, and so ultimately community and context

A theory of money  157 relative, it is also an objective property of material items (including events and processes) that are so desired, albeit clearly a relational one; at any moment in time, desire and so value, though dependent on human beings, are not matters of caprice. Amongst the reasons for desiring any item is that it is assessed as being useful in some way in the prevailing community context. Something that is so is said to have use value. Historically, some items with use value, and presumably those of limited availability (perhaps because of difficulty of locating or [re]producing them), have been positioned by members of communities as means to effect the discharging of certain (non-monetary) debts, perhaps early on to gods and/or their representatives, the cosmos, ancestors and eventually to each other. Any such positioned item can be said to have additional payment value, to be a means of pacifying another. In due course, with a notion of payment value implicitly at least ­established, and presumably with some items (per unit weight or w ­ hatever) being ranked above others in terms of such value, an accepted unit of relative or numerical value measurement or assignment emerged. This was doubtless at a stage of development, in a manner and of a form specific to each community; and presumably, in the first instance, applied to a highly limited set of items – though eventually, of course, extended to almost everything considered desirable. An item found in this way to have the capacity of being assigned a ­numerical value in a meaningful or operative way can be said to have exchange value within the conditions that prevail (very likely an extension/adaptation of payment value, but one that could not have happened without the prior establishment of a unit of account); with the associated numerical value indeed being a measure of it. To have exchange value is just to be generally desired or sought after, and so ‘exchangeable’, in a context in which a unit of value measurement is everywhere accepted2; the variety of numerical values in evidence at any point reflects the relative degrees of desire or sought-after-ness induced by, or otherwise associated with, the various items in the prevailing conditions3. Actual numerical values operative in sales etc. are determined through human exchange activities and related interactions. However, if a specific object is a member of a kind (e.g., a particular piece of gold or silver of a given weight), then whether that specific object has exchange value and, if so, the approximate measure of it may be known/determinable prior to any such exchange if the kind, qua kind, already has a numerical value associated with (a unit of) it within the community. Indeed, it will be ­possible, very often, to determine whether the kind, and so any kind member, has the property of being a relatively stable store of liquid exchange value (whether it is easy to ‘sell’ or pass on to others in some form of ‘exchange’ at any time, without apparent loss of value). This is especially important to note if, as I argue below, such properties of certain kinds of things can, where possessed, contribute to the successful functioning of a money.

158  Topics in scientific ontology With this brief sketch of the meaning of the term ‘value’ in the monetary context noted, let me then turn directly to the question of how the process of social positioning might produce something that possesses debt discharging and purchasing powers.

3  The consequence of positioning I start with the consequences of positioning per se. According to Hyman Minsky, ‘everyone can create money; the problem is to get it accepted’ (Minsky, 1986, p. 228). This claim, I will argue, sets a false contrast. It is only through being so accepted that a kind of thing can ever be (or be the stuff of) money, and this means getting it appropriately positioned. But how precisely does positioning work in relation to the construction of money in a modern capitalist economy? Where design is involved, the point of all positioning, let me once more recall, is to incorporate various items into a system through harnessing various of their capacities to serve some wider system function(s). In the case where human beings are so incorporated, capacities possessed are harnessed through the association of rights and obligations with each ­position. It is these that ensure that (those positioned as) lecturers lecture, and (those positioned as) students study etc. The rights of any one position are always attached to the obligations of others. Thus, the rights of students to attend lectures, say, are matched to the obligations of lecturers to give lectures etc. Clearly, the positioning of material objects does not entail that the latter acquire rights and obligations. However, where such objects are positioned as components of communities specifically (as opposed to other embedding artefacts), the harnessing of their capacities in the performance of system functioning does require that additional rights and obligations be differentially allocated to various human community participants determining the manner of their use. This is the way that specific material objects are, for example, constituted as vehicles, weapons, homes, tickets, passports, car parks and so on. Even the positioning of an object as a ‘high table’ in a Cambridge College can be seen to involve the allocation of rights and obligations to all College and other participants, regarding who can and cannot sit at it, when and so on. All are essential to the successful functioning of the positioned item. How does all this bear on the constitution of money? The relevant focus here, at least for a modern monetary community, is the notion of legal tender, and the rights and obligations formalised as legal tender laws or regulations. Regulations vary from community to community, so I ­focus on the contemporary UK. A kind of thing becomes (the stuff of) legal tender – and therefore, conventionally and perhaps legally speaking, money – by way of positioning it in such a fashion that it is the subject of a matched right/obligation pair that applies to all members of the relevant

A theory of money  159 community in relation to its use. Simply put, any participant who holds legal tender has the legal right to use it to liberate herself or himself from any debt held with others in that same community (including, of course, debt in the form of tax demands or fines etc. owed to the state). The obligation to which this right is matched is held by any second party to whom a participant holder of the legal tender is in debt (including the state). That obligation is just to accept the legal tender (of an appropriate amount) where it is offered, for the discharging of that debt. The basic mechanism described is clearly relational in nature and universal in the sense that it applies whatever happens to be (contingently) positioned as legal tender. As the Bank of England puts it: Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender.4 Whatever, then, is positioned as legal tender is money. Those holding it are entitled to use it as a general means of payment, as a guaranteed effective means for discharging debts held. Notice, though, that the attribution of the noted right/obligation pair does not in itself guarantee that the legal tender so formed has purchasing power. Although the legal tender must be accepted when offered for discharging an existing debt, in the UK at least, this does not guarantee that participants will enter into new debt relations with holders of money. If it is supposed that, formally, money is fully specified by identifying it with legal tender, then we have already uncovered money’s nature and how it is constituted. But my concern is with a successful money, with properties that a money has in practice, and for this it is necessary that legal tender also possess purchasing power. In theory, a money, if interpreted just as legal tender, can exist and not possess such a power. This is the reason I distinguished a successfully functioning money from money per se earlier. Let me quickly elaborate. A significant difference between a social kind of thing and a non-social one (e.g., water or copper) is that in the former social case, instances of a Y can sometimes be found not to function in ways characteristic of Y and yet remain that kind of thing − that is, a Y, albeit a dysfunctional Y. For mistakes can be made in individual instances of social positioning, or social items can break down or lose their capacities, but remain the sort of thing they are, albeit dysfunctional examples, unless and until removed from the relevant positions. A poor president, doctor, teacher, footballer, concert, weapons system or website is still a president, doctor, teacher, footballer, concert, weapons system or website, unless removed from the relevant position. When Mary Stuart (Mary, Queen of Scots) became legally positioned as queen,

160  Topics in scientific ontology she was just six days old, but remained queen despite being unable (for many years anyway) to fulfil a monarch’s functions. In the case of money, at least in a modern capitalist community, a legal tender that failed to maintain purchasing power would, in the first instance, remain legal tender, and so money if that is how the latter is defined, albeit certainly a dysfunctional one. I run through the foregoing for completeness. The point to stress, however, is that the whole purpose of social positioning, at least where design is involved, is to achieve a successful outcome. So, although mistakes and failures do sometimes happen without the positioned item losing its identity, in many − and indeed most − cases, change of a relevant sort, including de-positioning, will soon ensue. In the case of a failing money specifically, and in particular one that lacked or lost purchasing power, the position occupant would likely be very quickly adapted or replaced. Money, then, will typically be successfully functioning in practice, and specifically bearing purchasing power, whatever its legal definition; so it is the nature of a successful money that is of most relevance and interest if the objective is to understand modern money. It follows that the question of how a legal tender achieves purchasing power, where it does, is indeed an essential one here. It is necessary, in other words, to determine the reason community participants are willing, where they are, to accept to become creditors knowing that they must accept the legal tender in payment. It is not difficult to see that for this, the legal tender must additionally be trusted as a stable store of liquidity, meaning that participants are confident that if they accept it, they will be able to pass it on whenever they want to (it is liquid in that sense), without any apparent loss of value. How, though, can this sort of trust, essential for a successfully functioning money, be achieved?

4 Trust Obviously, state activity working to this end will be a fundamental factor. Specifically, the state or government can seek to encourage confidence in a money through various regulatory practices, most obviously through raising taxes; if it is compulsory that the legal tender be used to discharge taxes, then raising the latter means that everyone must acquire more of it. But even measures such as these cannot guarantee that participants accept money for general purposes. If, say, the kind of thing positioned as money were simple pieces of paper with symbols of value scribbled on them, it seems unlikely that many would trust them. At a minimum, such a hypothetical ‘paper money’ would need to be limited in supply, albeit accessible to all, and difficult to counterfeit or otherwise produce in an unofficial or unregulated manner.

A theory of money  161 In other words, and this is the point, the kind of thing positioned as legal tender must itself be of a material nature so as to ground a trust of the relevant sort in any money that it is used to constitute. In principle, a sufficient level of trust can be achieved in various ways, the determination or elaboration of which constitutes a substantive issue. It seems clear, however, that under conditions of modern capitalism, it would be almost impossible to achieve trust of a reliable and relevant sort if the kind of thing positioned as legal tender were not already positioned as a form of exchange value prior to becoming money, and indeed found to be a stable store of relatively liquid value. The property of being both trust-inducing and sustaining, then, or so I maintain, is a basic requirement of a kind of thing if, with positioning, it is to serve as a successful money, and specifically to possess generalised purchasing power. It must be able to induce trust that, if positioned as money, it will be a stable store of liquidity. And a seemingly necessary condition for this capacity to be possessed is that this kind of thing, in turn, has (prior to being positioned as money) already been found to be a stable store of liquidity. In practice, the latter condition is indeed usually found to be met. Currently, certainly in the UK, that which occupies the money position was, at the time of its positioning, a form of state-backed bank debt. And as a form of debt, when it was initially positioned as money, it was already recognised as a stable store of liquidity (see Lawson, 2018b). Let me stress that by referring to bank debt as the kind of thing that became positioned as money, I refer to the debt obligation or more fully the debt/credit relation between a debtor and a creditor. To refer to the relationship simply as a debt is to view it from the perspective of the debtor; it is credit from the perspective of the creditor. So, commercial bank debt per se is a relation between a bank as debtor and a customer as creditor, this bank debt being credit on the bank from the perspective of the latter. But let me equally stress that if bank debt came at some point to be positioned as money, the money so constituted (qua positioned debt) is not the same thing as debt per se. In any and all cases of social positioning, it is a mistake to suppose that a positioned item must serve all the uses made of, or served by, that item prior to its being positioned. The extent to which the initial uses of some item are reproduced after its being positioned in some manner is something to be separately determined in each case5. Thus, currently, at least in communities such as the modern UK, although a form of trusted state-backed debt has been found to maintain its capacity to induce trust well after its initial positioning as money, it is clearly no long useable in various other ways, or to possess certain properties usually considered to be characteristic of debt. Thus, it is not the case that in all instances6 the holder of modern money qua positioned debt is able to enforce that it be redeemed with, or converted into, something

162  Topics in scientific ontology other than itself (say, commodities or liabilities of third parties etc.), which is the essence of debt. Indeed, modern debt money per se may be more, or mostly, or best regarded as, a form of net wealth of its holder rather than a credit over its issuer (whatever the legal interpretation and/or manner in which money may figure in modern accounting). To interpret money so constituted simply as debt is certainly likely to mislead. I might further emphasise that, of course, it was not always so that the occupant of the money position was originally a form of debt of any kind. Indeed, the specific item or kind of thing positioned as money has no doubt varied over time within specific communities, as well as across communities. In a previous paper (Lawson, 2016), I suggested that even tobacco has been so used. This happened in Virginia and the surrounding states of Maryland and North Carolina in the colonial period. Because of a scarcity of coins at that time, tobacco was positioned as money for a significant period. This was feasible because tobacco was already, prior to positioning, recognised as a relatively liquid stable store of value, available to all but not without cost (I return to the case of tobacco as commodity money in the following chapter). But, and most fundamentally, whatever the kind of stuff that contingently occupies the money position at any point, it can be recognised as grounding trust of a sort and level that is essential to the successful functioning of a community’s money – an induced trust that thereby is itself rendered a feature of money’s nature. Finally, all money forms bring their own unique features and requirements. Currently, in being constituted as (positioned) bank debt/credit, money is not continuously observable. As a result, instances of it must be identified indirectly. This is achieved by linking all such instances to additional items that are (or can be easily rendered) observable; items that thereby serve as its markers. These can take the form of appropriately branded physical tokens, computer records/entries or whatever. Where it is physical tokens transferable by hand that are used, these are usually called ‘cash’. As already alluded to (in endnote 6), the nature of the current system is such that any cash in circulation marks a (positioned) debt of the central bank to its holders. Electronic entries in the bank accounts of individuals in the community also identify money or its holders. In this case, under current conditions, the electronic entries indicate the (positioned) debt of the relevant commercial bank to holders of these accounts. These additional items are certainly fundamental, if contingent, features of the current monetary system. However, both cash and electronic account entries are in effect IOU notes or documents; they are markers of money and not money itself. There may be little harm in calling items of cash something like money tokens. But, strictly speaking, money proper is something else; it is, to repeat, the positioned item of trust, serving as a general means of payment and form of purchasing power. It is instances of the latter which the cash or tokens function to identify.

A theory of money  163

5  Summing up The foregoing is, in my assessment, a reasonably complete theory of the constitution and nature of money, and more importantly, of a successfully functioning money, the latter being identified as that which has come to possess general debt discharging and purchasing powers7. So conceived, a successful money is constituted as a combination of the universal/necessary with the particular/contingent. The former consists, first, in the property of the thing in question being positioned as a ­component of the community’s system of value accounting and ­payments, in a manner whereby its use is governed by rights and obligations of ­community participants as indicated by community regulations and conventions, including especially the prevailing legal tender laws. In a­ ddition, it consists, second, in the property of being trusted, and ­specifically ­commanding a community’s trust in it as a stable store of liquidity. These ­features comprise the essence of a successful money, the set of properties in virtue of which it is a functional money (rather than something else) grounding its nominal or identifying powers. An additional, ­contingent feature of a successful money is the kind of thing that, because of its trust-inducing capacities in a given context, is selected as the occupant of the money position at any point in time in any given community. ­Currently, the latter is bank debt. Most of the money in circulation in modern communities is created by way of commercial banks making loans. This clearly bears various economic consequences, of course. For commercial banks are primarily concerned not with serving the monetary needs of the community as such, but with making profits for themselves. This will inevitably bear on the manner in which (positioned) bank credit and so money are created − that is, for whom, when and for what purposes. Indeed, banks have an obvious incentive to grant loans where short-term returns are to be made, especially where they are judged to be most lucrative and preferably guaranteed. Thus, banks usually prioritise the purchase of existing assets over stimulating the production of new ones, particularly in the case of real estate (for a recent persuasive discussion, see Turner, 2012, 2016; for an earlier discussion, see Keynes, 1971 [1930]). And they are usually keen to lend large amounts to governments, whose reliability as borrowers is more or less assured (so that it is easy to understand banks’ traditional encouragement for costly state-led adventures such as wars). It is not my objective to address such implications here (though see Lawson, 2016); I merely indicate that the conception sustained, if correct, is not without economic and political consequence. The primary concern here rather is to uncover and clarify various ­fundamentals of the social world, and in the current chapter specifically, to reveal how a successfully functioning money comes into being, is grounded and works. The resulting positioning theory of money, though seemingly coherent and explanatorily grounded, has met with resistance by some – not least those

164  Topics in scientific ontology subscribing to an alternative and widely promoted credit ­theory of money. In the following chapter I briefly examine the credit theory and compare it to the positioning theory. I conclude that the various contributions systematised as credit theories are either themselves usually unacknowledged (albeit often somewhat reductionist) instances of the positioning theory or else, when appropriately named (as credit theories), essentially unsustainable.

Notes 1 In Lockean terms, the nature of some kind of thing is its real essence and its nominal essence takes the form of appearances, typically expressed as abstractions we make at a superficial level, often when naming that kind. 2 Not all useful things have exchange value in a specific set of conditions, of course. 3 I intend this terminology to be quite general and to be invariant to differences in theories of how numerical values are determined or assigned (theories that I do not here go into). In some cases, as when considering the relation of the theory of money defended to that advanced by Karl Marx, clarity may be facilitated by an adaptation of terminology. Marx, of course, is concerned with highly competitive ‘normal’ (Marx, 1974, p. 47) or ‘average conditions of production’ (Marx, 1935, p. 35) at a specific stage of capitalist development; and he advances a notion of value, specific to these conditions, as something that is due to a form of labour (the average amount of socially necessary ­[crystallised or congealed] labour, or something similar). The only form in which this ­(labour-produced) value can be identified for specific commodities, ‘apart from their bodily form’ (Marx, 1974, p. 57), or can ‘manifest itself or be expressed’ (ibid, p. 46), is as relative value, which Marx often called ‘exchange value’. Hence the basis for potential confusion in terminology: Marx’s notion is a specific case of exchange value as I am using the term. If we momentarily refer to Marx’s notion (of exchange value) instead as relative labour value, say, or perhaps exchangeable value (as Marx tends to do [instead of exchange value] in Value Prices and Profit, Marx, 1935), then it is clear that many items that are not produced by labour may still be assigned a monetary value (or price) and so found to possess exchange value (according to the terminology adopted here), but not have a ‘relative labour value’ or ‘exchangeable value’ − that is, Marx’s ‘exchange value’ (Marx notes, for example, that ‘Objects […] such as conscience, honour, etc., are capable of being offered for sale by their holders, and thus acquire, through their price, the form of commodities. Hence an ­object may have a price without having a value” – and so, or meaning, without an exchange value as he employs the term). In other words, the terminology adopted here does not in itself exclude specific theories of how value is produced under specified conditions; though, as I say, various terms may benefit from adjustment or qualification, according to context. 4 Downloaded on December 09, 2017 from http://edu.bankofengland.co.uk/ knowledgebank/what-is-legal-tender/. 5 Jackets and jumpers may be positioned as goalposts on a makeshift football pitch, but whilst so positioned they cannot simultaneously serve the functions of clothing. 6 In the case of the money of a deposit-issuing commercial bank held by a customer (and marked by account records), it does still constitute something of an obligation for the bank in that the latter is legally required, when requested by

A theory of money  165 the customer, to convert ‘on demand’ its own positioned debt qua money into cash, or, more accurately, into central bank debt (also) ­positioned as money (and marked by cash). The commercial bank is also under the legal obligation to settle with other commercial banks when its customers seek to use their deposits to make payments and transfers etc. Of course, re convertibility into positioned central bank debt (marked by cash), very little money in the modern economy is actually still held in this form (about 7%). But for the cases where it is required by community members, the commercial banks must always hold an amount of it. 7 So, these nominal features have constituted the starting point for the a­ nalysis. An alternative starting point might have been the set of properties usually ­regarded as money’s canonical functions, namely being a unit of account, a general means of payment, a medium of exchange and a store of value. Elsewhere, I have used this alternative set to initiate the analysis (see Lawson, 2016). But it is clear enough that although the two sets of properties interrelate, the noted traditional functions are not as straightforwardly seen as nominal features by which money is usually identified. A unit of account is a presupposition of money and clearly not a function at all; whereas serving as a general means of payment is in any case a manifestation of debt discharging power, whilst being a medium of exchange is but a manifestation of purchasing power. Being a store of value, we have also seen, is, when combined with liquidity, best conceived as a condition of purchasing power, and so an explanatory rather than a nominal feature.

References Breen, T. H. (2001) Tobacco Culture, Princeton: New Jersey Press. Galbraith, John K. (1975) Money: Whence it Came, and Where it Went, Boston: Houghton Mifflin. Ingham, Geoffrey (2004) The Nature of Money, Cambridge, UK: Polity Press. Ingham, Geoffrey (2011) ‘The ontology of money’, Twill, no. 14, pp. 15–22, www. twill.info. Keynes, John Maynard (1971) [1930] A Treatise on Money, vol. 1, The Pure Theory of Money, reprinted in The Collected Writings of John Maynard Keynes, London: ­Macmillan for the Royal Economic Society. Lawson, Tony (2016) ‘Social positioning and the nature of money’, Cambridge ­Journal of Economics, 40(4), pp. 961–996. Lawson, Tony (2018a) ‘The constitution and nature of money’, Cambridge Journal of Economics, 42(3), pp. 851–73. Lawson, Tony (2018b) ‘Debt as money’, Cambridge Journal of Economics, 42(4), pp. 1165–81. Marx, Karl (1970) A Contribution to the Critique of Political Economy, New York: ­International Publishers. Minsky, Hyman P. (1986) Stabilizing an Unstable Economy, New Haven: Yale ­University Press. Sidgwick, Henry (1879) ‘What is money?’ Fortnightly Review, vol. 31, 563–75. Turner, A. (2012) Economics after the Crisis: Objectives and Means, Cambridge, MA: MIT Press. Turner, A. (2016) Between Debt and the Devil: Money, Credit and Fixing Global Finance, Princeton: Princeton University Press.

6 The positioning and credit theories of money compared*

1 Introduction Money is usually identified as, first and foremost, that which has the power to discharge any existing debt throughout a community. And it is customary to regard a money as successful if it also possesses general purchasing power, meaning that community participants are everywhere prepared to enter into new credit/debt relations that can be discharged using this money. These powers of money, or of a successful money, are its nominal features by which it is recognised and singled out, say as a topic of study. The nature of money, or of a successfully functioning money, is that further set of its properties that accounts for these identifying powers. According to the positioning theory of money that I am defending (Lawson, 2016, 2018a, 2018b, chapter 5 above), the former general debt discharging power is grounded in the positioning process through which all of social reality is constituted − including, in the case of money, the allocation of rights and obligations to community members relating to the use of money for discharging existing debts. In modern communities, it is the formulation of laws of legal tender that usually determines such rights and obligations. An aspect of money’s nature is thus its property of being so positioned. Purchasing power, in contrast, is grounded to a significant extent in the trust of community participants that if they enter into debts with others, so that they are bound to accept the money stuff in payment, they will always be able to pass on to others the money so acquired, without any apparent loss of value. In short, a necessary property of a successful money is that it is trusted to be a liquid store of value. This trust will depend on a capacity of the kind of thing positioned as money to induce and sustain it, a capacity, of course, that will usually be backed up by state support for the money. This is a capacity, or so I maintain, that typically is possessed only where the occupant of the money position was itself regarded as a liquid store of (exchange) value prior to being so positioned. The foregoing briefly summarises the positioning theory of money I defend. The context in which I am defending it is one in which the majority, or at least a large number, of monetary theorists, including advocates of Modern Money Theory (MMT), profess to accept an alternative ‘credit

Positioning and credit theories of money  167

theory of money’. Supporters of such a credit theory who have noted the positioning theory have made critical comments to suggest that the credit theory is superior. But is it? I focus systematically on that question here and suggest otherwise. Before embarking on the analysis, however, let me be clear how I am employing or interpreting the central terms ‘credit’, and so ‘debt’, in all this. Technically and legally speaking, ‘credit’ means a specific right to payment or satisfaction. It is a right, held by a creditor, that is internally related to an obligation − a ‘debt’ − held by a debtor to satisfy the creditor. Credit and debt, then, are two aspects of the same social relation: a credit/debt (or debt/credit) relation, connecting a creditor and a debtor; you cannot have one aspect without the other. Credit is simply this relation viewed from the perspective of the creditor; it is debt from the point of view of the debtor. Various contributors to the literature, however, occasionally interpret the term ‘credit’ in ways derivative of, but significantly different from, this, which mostly confuse matters. Especially misleading is the notion, often expressed, that a ‘credit’ is anything that cancels a debt. This is not the interpretation used here. At least, it is not a definition, even if various ‘credit theorists’ suppose that debts are always or only cancelled by credits (as interpreted here). Amongst money’s nominal or identifying powers, as noted, is its capacity to discharge any debt. If we refer to that capacity, or its utilisation, as credit (and I am suggesting that we do not so do), then clearly money is definitionally credit in this sense; it would be impossible to have money that were not such a credit, for all money functions as money does. If the latter interpretation of the term ‘credit’ (i.e., anything that cancels a debt) were used in naming the ‘credit theory of money’, any theory of money would thereby be an instance of the credit theory of money; but the theory itself, as a theory of money, would be a functionalist banality, barely warranting the status of ‘theory’. I take it that the credit theory of money, appropriately interpreted, is more significant than this, and in the hope of reducing unnecessary ambiguity in the ensuing analysis I will be using the term ‘credit’ only in the legal and technical sense defined above. This certainly is the meaning embraced by the more serious and consistent proponents of the credit theory (e.g., Alfred Mitchel Innes, on whom I focus below). Once the term is systematically employed (only) in this fashion, the credit and positioning theories, we will see, are ultimately very different. However, let me start with similarities; for the two theories, I should first note, do also have features in common. In both cases, the primary focus is value accounting and payments in the context of an accepted unit of account. And for both theories, too, money can be used to discharge any debt. The difference in the two conceptions lies in theorising how the generalised debt discharging power of money arises, along with the purchasing power of a successful money; and so, most fundamentally, in understanding the nature of a successful money.

168  Topics in scientific ontology There are, of course, various conceptions in the literature that go under the heading of ‘credit theories of money’ (see Peacock, 2017). However, any conception that warrants the label, I shall argue, has two essential components. The first component, a thesis that figures less prominently amongst those who loosely identify as credit theorists, is that any and all credit must be money. The second is that money consists of nothing but credit. This latter thesis is one that seemingly most ‘credit theorists’ seek to defend. Where a ‘credit theorist’ fails to acknowledge the first component, namely that each and every credit is money, the claim sustained can only be that a specific form of credit is money. Such a view, however, necessarily, if implicitly, presupposes that a process of positioning is operative, rendering the specific form of credit in question the occupant of the money position. But then we have a theory of money whereby positioning makes a difference to how money’s functions get to be served; the latter are seen not to be due to the nature of credit per se. The result of any such line of reasoning, properly interpreted, is a theory of ‘credit money’, not a ‘credit theory of money’, and will constitute an instance of the positioning theory. Furthermore, if indeed it is proposed that it is only a specific form, or forms, of credit that can be positioned as money, so that it is also accepted that money’s nominal properties are not grounded in the nature of credit per se, the door is thereby opened to the possibility that phenomena other than credit – such as commodities – might, in principle at least, be so positioned. In any case, in such a situation we have a positioning, not a credit, theory of money. So, to be a genuine alternative to the positioning theory, a credit theory of money must maintain that the noted nominal powers of money somehow derive from the nature of credit itself. On such a view, it follows that once a community accepts a system of value measurement, the creation of debts and credits is feasible; and that once any specific credit is created, it can be used to cancel a debt, including potentially any debt, and so is money. I will illustrate using the contributions of Alfred Mitchell Innes below, who indeed advances this claim. According to the positioning theory, in contrast, and to repeat, the mere fact of a unit of account and the emergence of credit and debt are not nearly enough for the existence of money. Generalised debt discharging power additionally, and most fundamentally, requires a process of social positioning. It is through the creation of the position of money with associated rights and obligations governing the use of its occupant, and the allocation of an appropriate kind of thing to this position, that money itself is constituted. This accords with the constitution of all social phenomena. In the case of money, as already noted, the (legally established) rights and obligations in question bear upon the employment of money (qua legal tender) as a general means of payment or debt discharger. Essentially, it

Positioning and credit theories of money  169 is the very process of positioning a kind of stuff as money that ensures that anyone holding the money has the right to use it to discharge any debt held with any other member of the community, this being effected by way of handing over the money. Furthermore, there is no reason why the contingently positioned money object should always be a form of credit/ debt at all. To suppose that it must be is simply to propose a particular reductionist version of the positioning theory. The two basic theories here under focus, then − the credit theory of money and the positioning theory of money − are ultimately very different in their fundamentals. The starting point for the credit theory is the nature of credit per se, and the general debt discharging power of money is derivative of the fact that all money is always credit and nothing but. For the positioning theory, money is established and so gets to be used as a general means of payment, by way of social positioning of a suitable object, where the latter does not have to be a form of credit at all (though it may be). In short, for the credit theory, money’s debt discharging power arises because money is first of all and always credit; for the positioning theory, this power can exist without even employing credit in money’s construction. It is likely necessary that in the following discussion, I not only conduct a relative evaluation exercise, but indicate that my assessment of the credit theory, when consistently adhered to, is as described. So I will throughout provide textual support for my interpretation of the fundamentals of a coherent credit theory as I criticise them. To this end I will, as noted, be focusing primarily on the exposition of the credit theory provided by ­Alfred Mitchel Innes. I find Innes to be as clear and consistent as any credit theorist. He is a contributor, moreover, perhaps the only one, on whom almost all other ‘credit theorists’ seem in any case to draw. I noted above that the two theories under discussion do have important features in common. Yet if my description of the credit theory is correct, they end up being very different. What accounts for the parting of the ways, for the very different conceptions sustained? Behind, and I think ultimately explaining, the differences in the two conceptions is a contrasting basic orientation to the generalised trust in money that is required for a monetary system to work. Focusing here on the modern world, it seems to me that proponents of the credit theory such as Innes implicitly adopt an overly positive view of the functioning of the capitalist system. Indeed, I will argue that the credit theory consistently pursued achieves whatever plausibility it does only by treating the matter of generating trust as effectively a non-issue. Underpinning the positioning theory, in contrast, is an assessment that trust within a monetary system is always hard won, so that in effect accounting for a level of trust that is sufficient for the system to function, where this is achieved, must be an essential part of the exercise.

170  Topics in scientific ontology Let me, then, elaborate and defend this latter assessment of where the two conceptions essentially part company as a component of my overall thesis, whilst simultaneously seeking both to ground my assessment of the nature of the credit theory and to provide a relative evaluation of the two conceptions of money.

2  Innes and the credit theory of money Innes sets out the credit theory of money in two papers published in the Banking Law Journal, the first in 1913 titled ‘What is Money?’ and the second in 1914 titled ‘The Credit Theory of Money’. In the second of the two, Innes sums up the credit theory of money very simply as follows: ‘The Credit Theory is this: that a sale and purchase is the exchange of a commodity for credit’ (Innes, 1914 p. 152). Clearly, the meaning of the term ‘credit’ is fundamental to a discussion concerning the credit theory and specifically to understanding Innes’ reasoning. So, let me first briefly observe that Innes does indeed interpret the term in the manner I have defined it earlier. Thus, in the 1913 paper Innes writes that: It is here necessary to explain the primitive and the only true commercial or economic meaning of the word ‘credit.’ It is simply the correlative of debt. What A owes to B is A’s debt to B and B’s credit on A. A is B’s debtor and B is A’s creditor. The words ‘credit’ and ‘debt’ express a legal relationship between two parties, and they express the same legal relationship seen from two opposite sides. A will speak of this relationship as a debt, while B will speak of it as a credit. As I shall have frequent occasion to use these two words, it is necessary that the reader should familiarize himself with this conception which, though simple enough to the banker or financial expert, is apt to be confusing to the ordinary reader, owing to the many derivative meanings which are associated with the word ‘credit.’ Whether, therefore, in the following pages, the word credit or debt is used, the thing spoken of is precisely the same in both cases, the one or the other word being used according as the situation is being looked at from the point of view of the creditor or of the debtor. (Innes, 1913, p. 392) He adds1: ‘The word “credit” is generally technically defined as being the right to demand and sue for payment of a debt, and this no doubt is the legal aspect of a credit today’ (Innes, 1913, p. 392). With this notion of credit to hand, a credit theory of money worthy of the name, I have suggested, has the following two component theses: all credit is money, and credit alone is money. The latter, as I say, is the more commonly recognised feature of the theory; but for the theory to be truly a credit theory of money, the former must hold as well, for the constitution and nature of money must lie in the very notion of credit.

Positioning and credit theories of money  171 Innes certainly recognises the two theses as equally essential components of the credit theory of money and sets about defending them both. As already noted, in the 1914 paper Innes sums up the credit theory of money as holding that ‘a sale and purchase is the exchange of a commodity for credit’. That is the basic theory. A presumption is that a unit of value accounting is in place, and that all commodities or exchangeable items have their exchange values expressed in terms of it. Notice, first, that the reproduced passage constitutes not a starting assumption, but a statement of the credit theory. It is something that Innes must establish as being the case. It is more typical, of course, to talk of any exchange involving a commodity being given over for money. For ‘money’ is the term we use for that which has the power to function as a general means of payment. So, if the latter function, according to Innes, is always and only achieved by credit, then credit, Innes claims here, is the stuff of money: money must always be credit. This, then, is one essential component of the credit theory accepted by Innes – the second component noted above. The additional or first component, or so I am suggesting, is that any and all credit is money. The noted passage is clearly seen to be consistent with this in referring to credit rather than a form of credit. But Innes is clear throughout about his accepting the thesis. If indeed any credit is money, this applies of course to a credit relation formed between any two parties, however informal or temporary the relationship. That is, where any B is in debt to any A, that debt is a credit of A on B, and that credit is money. Innes is clear that this is so. Thus, referring to an unspecified (i.e., to any) A and B, he additionally formulates and explains the credit theory as follows: ‘Money, then, is credit and nothing but credit. A’s money is B’s debt to him, and when B pays his debt, A’s money disappears. This is the whole theory of money’ (Innes, 1913, p. 402). If the credit of any A on any B is money, then, to repeat, all credit is money. And if the formulation of the first sentence is the whole theory of money, there is clearly nothing other than credit involved in money’s constitution. So, (all) credit, and credit alone, is money. These two components of the credit theory, I might reiterate, are not mere assumptions, but rather conjectures that require defending. Doing so is an undertaking that Innes embraces: ‘as I shall try to show, credit and credit alone is money’ (Innes, 1913, p. 392). How, then, does Innes go about this? I will address his arguments taking the two component theses of the credit theory in turn, starting with the claim that (all) credit is money. 2.1  Component thesis 1: all credit is money Money, all monetary theorists appear to agree, possesses the nominal property of being a general means of payment. The term ‘general’, of

172  Topics in scientific ontology course, is relativised to any specific monetary community. Innes’ concern is clearly that of a community qua nation state, such as the modern US or the UK. This will be the focus here as well. The question, then, is: how, according to Innes, does credit per se, as interpreted here, become a general means of payment in such a national community, allowing the inference that any and all credit is money? Fundamental to Innes’ reasoning is a supposed (and seemingly universal) ‘primitive law of commerce’ associated with the notion of credit. This is a right of any debtor to pay off a debt to the corresponding creditor by handing over to that creditor the creditor’s own acknowledgement of a debt to an equivalent amount: while a debtor must be in a position to satisfy his creditor, the really important characteristic of a credit is not the right which it gives to ‘payment’ of a debt, but the right that it confers on the holder to liberate himself from debt by its means—a right recognized by all societies. By buying we become debtors and by selling we become creditors, and being all both buyers and sellers we are all debtors and creditors. As debtor we can compel our creditor to cancel our obligation to him by handing to him his own acknowledgment of a debt to an equivalent amount which he, in his turn, has incurred […] This is the primitive law of commerce. (Innes, 1913, p. 392–3). It is this ‘primitive law’, according to Innes − interpreted as almost analytic, certainly somehow historically bound, to the very notion of credit, identifying a ‘right’ that is a ‘really important characteristic of a credit’ − that ultimately grounds the result that any credit possesses general (i.e., community-wide) debt discharging and purchasing power. How does Innes derive such a result? The first sentence of the foregoing passage taken by itself might be read as suggesting that this supposed primitive law is equivalent to legal tender laws, at least as they currently stand in the UK. That is, it appears that the primitive law itself guarantees that any credit can be used to cancel any debt. But the third sentence makes it clear that the primitive law applies not to any credit, but specifically to a credit held by a debtor on a person to whom this debtor is herself or himself in debt. In effect, if X is in debt to Y, but holds a debt of (i.e., a credit on) Y of an equivalent amount, X can use the latter to cancel her or his debt to Y. If that is the correct understanding of the primitive law, how does it enable Innes to move to the conclusion that any credit possesses general (i.e., community-wide) debt discharging and purchasing power? Central to Innes’ reasoning here is the following mechanism. Individuals enter into relations of credit and debt with others throughout the community. These, in principle, can be rearranged so that each individual is in credit with, or in debt to, but one (set of) agent(s), allowing (through

Positioning and credit theories of money  173 drawing on the ‘primitive law of commerce’) the cancelling of many debts. The agents in question can be called banks. Thus if, say, X is originally in debt to Y to a given sum or amount S, and Y is in turn in debt to Z to the same amount, then Y and Z, the two creditors, can in principle sell their credits to a third party B, the bank, whereupon both are in credit with the bank B to an amount S. Matching this, the two debtors, X and Y, are now in debt to the bank B to the same amount. Clearly, Y now both has credit on, and is in debt to, the bank B, both to an amount S; and the two amounts can be cancelled out according to the noted ‘primitive law of commerce’, leaving X in debt with B and Z in credit with B. In this way banks are interpreted as the business clearing houses of credit and debt. So it appears that any credit cancels any debt of an equivalent amount. For although initially Y’s credit is with X whilst Y’s debt is with Z, through the use of the banking system Y’s credit with X can be turned into a credit with B, which can be used to cancel Y’s debt to Z if transformed into a debt of Y to B. If this happens, Y drops out of the chain. A credit on one has been used in effect to cancel a debt to another. As I say, this appears to imply that any credit cancels any debt. Thus, after defining the credit theory in terms of a two-person exchange only, Innes immediately adds: Such is the fundamental theory, but in practice it is not necessary for a debtor to acquire credits on the same persons to whom he is debtor. We are all both buyers and sellers, so that we are all at the same time both debtors and creditors of each other, and by the wonderfully efficient machinery of the banks to which we sell our credits, and which thus become the clearing houses of commerce, the debts and credits of the whole community are centralized and set off against each other. In practice, therefore, any good credit will pay any debt. (Innes, 1914, p. 152) Notice, though, that there is not an automatic right of the debtor Y to release herself or himself from the debt to Z by the direct tender of any equivalent credit held by Y on some third party. Z may have to accept her or his own debt if it is offered, but not that of some third party. And this remains the case even if that third party is a bank. If a bank B pays off Y using a credit on Z, the latter can certainly be used (though I see no reason to suppose that Y must accept this form of payment). But short of this, I see no right of Y to cancel a debt with Z using a credit on the bank B. At least there is no such right that is intrinsic or otherwise tied to the notion of credit. Z may mistrust the ability of bank B to redeem its obligations (and even less any other third party). Equally, of course, the bank may not want to acquire the debt of others. The gaining of trust is fundamental here. An implicit assumption is precisely that banks trust all debtors and all creditors trust banks.

174  Topics in scientific ontology It is presumably to avoid the difficulty of dealing with trust that Innes, without discussion, slips in the notion of a ‘good’ credit at the end of the preceding passage. A good credit is one where its issuer is both willing and able to redeem it. Of course, if it can be assumed that credit is always good, and that all community participants both recognise this and recognise that all others also recognise it, then there is every reason to suppose that any credit could discharge any debt of an equivalent amount (although there is not yet [without state regulation] any right involved). So, by reasoning in the manner noted, Innes feels able to conclude that any credit can discharge any debt, meaning that all credit is money. Such reasoning, were it correct, would not itself establish that money is only credit, of course; rather, it is designed to support Innes’ first component thesis that all credit is money. Its validity, as I say, rests on a presumption that all debt is essentially ‘good’ debt. But the notion that every debtor is trustworthy, and regarded as such, is merely something that Innes takes as a given. In doing so, Innes is implicitly assuming away major challenges of any modern monetary system. Fundamental to Innes’ whole conception is a focus that is away from issues of the (in)ability or (un)willingness of participants either to pay or to enter into new debt relations, and so from questions of trust, resulting in an almost exclusive concentration on the right of the holder of credit to a payment or satisfaction: A credit, it cannot be too often or too emphatically stated, is a right to “satisfaction.” This right depends on no statute, but on common or customary law. It is inherent in the very nature of credit throughout the world. It is credit. (Innes, 1914, pp. 160–1) I repeat, an obligation does not imply an ability to pay or an honesty in transactions. Similarly, a right to satisfaction does not amount to an expectation or trust in debtors to choose, or to be able, to do that which, according to Innes, custom suggests they ought. Nor, indeed, is there an obligation intrinsic to the notion of credit or debt for any community participant to accept to enter into a new credit/debt relation with another. 2.2  The state, state debt and taxation Innes’ manner of grounding his claim that any and all credit is money is, in its basics, as just set out. I am defending an alternative conception, of course, in which – at least in the modern world – it is necessarily the case that where, as at present, debt/credit is (positioned as) money, it is of a very restricted form. It is a form that, as well as having been found, qua a kind of credit, to constitute a liquid store of value prior to being positioned as money, is one that, following positioning, commands state backing. Currently that form is (state-backed) (positioned) bank debt.

Positioning and credit theories of money  175 As a simple observation, it is clear that in practice, certainly throughout a national community such as the modern UK, the term ‘money’ in everyday interactions is highly restricted in its usage, applying to a very specific set of phenomena. Notably, it is not used to designate all forms of credit/ debt. This was equally the case when Innes was writing, with the term ‘money’ usually reserved by community participants for something that was backed by, or associated with, the state. This, of course, accords with the positioning theory, but not the credit theory. According to the latter, all credit is money; so Innes must criticise the noted everyday terminological practices as misguided at best2. This he is keen to do. Needless to say, Innes must and does interpret state money also to be a form of credit (associated with government coins and notes he calls ‘tokens’). I return to the question of whether this interpretation is appropriate in due course. For now, I am observing that in interpreting government money as credit, Innes cannot allow that this form of credit, as he interprets it, is any more deserving of the label ‘money’ than any other form of credit, no matter how informal: So numerous have these government tokens become in the last few centuries and so universal their use in everyday life – far exceeding that of any other species of money – that we have come to associate them more especially with the word ‘money.’ But they have no more claim to the title than any other tokens or acknowledgements of debt. Every merchant who pays for a purchase with his bill, and every banker who issues his notes or authorizes drafts on the Treasury, or which puts its stamp on a piece of metal or a sheet of paper, and of all the false ideas current on the subject of money none is more harmful than that which attributes to the government the special function of monopolizing the issues of money. (Innes, 1914, p. 152) As we have seen, it is Innes’s view that anyone can issue money just by way of entering into to debt with another; for any individual who goes into debt creates a credit for some related other, which, according to Innes, is money. And fundamentally, this individual credit qua money is, of its nature3, in being a promise to pay, identical to any other credit and so money, including any that might be provided by the state: The notion that we all have to-day, that the government coin is the one and only dollar and that all other forms of money are promises to pay that dollar is no longer tenable in the face of the clear historical evidence to the contrary. A government dollar is a promise to ‘pay,’ a promise to ‘satisfy,’ a promise to ‘redeem,’ just as all other money is. All forms of money are identical in their nature. […] Everybody who incurs a debt issues his own dollar, which may or may not be identical with the dollar of anyone else’s money. (Innes, 1914, p. 154)

176  Topics in scientific ontology As long as credit and so money is redeemable, and Innes treats this as being typically the case, the money in question is stable and all is fine: The one essential condition to the stability of all money by whomsoever issued is […] that it should be redeemable at the proper time, not in pieces of metal, but in credit. A credit redeems a debt and nothing else does, unless in virtue of a special statute or a particular contract. (Innes, 1914, p. 154) Why, though, should anyone trust that the credit of any and all others is good or stable (putting aside for the moment the issue of whether government gold coins are really [tokens of] credit)? This, as I say, is a concern that is seemingly absent from Innes’s theory, at least as an explicit focus. In all cases the attention is given to the technical details of how mechanisms for redeeming a debt can work using credit, not on the willingness or capability of debtors to do so, or of potential creditors’ assessments of the latter factors. Mostly, the argument runs as if all credit can be treated as ‘good’. Notably, this assessment is certainly not restricted to forms of state-backed money interpreted as credit/debt and specifically as credit that can be redeemed through discharging tax obligations4; rather, it applies in effect to any and all forms of credit alike. The state’s imposition of taxation does, of course, mean that community participants all need to hold some of this state money; for they all need it specifically to discharge tax obligations. Or at least, they need to hold bank credit/money; for in the case of individual tax debts to the government, credit on the bank can be used as the debt discharger: [The individual taxpayer has to acquire a] portion of the debt from some holder of a coin or certificate or other form of government money, and present it to the Treasury in liquidation of his legal debt. He has to redeem or cancel that portion of the debt. As a matter of fact most of the government money finds its way to the banks, and we pay our tax by a cheque on our banker, who hands over to the treasury the coins or notes or certificates in exchange for the cheque and debits our account. This, then—the redemption of government debt by taxation—is the basic law of coinage and of any issue of government “money” in whatever form. (Innes, 1914, p. 161) This certainly helps to explain why government money might have value. But it otherwise has little bearing for Innes on the basic theory, and specifically the component of the credit theory on which I am currently focusing. According to Innes, government money is a form of credit, and all credit possesses general debt or purchasing power. Or at least it does so to the extent that it is ‘good’ credit, meaning redeemable. And Innes writes

Positioning and credit theories of money  177 as if this is usually, if not always, the case. With trust in credit seemingly taken for granted, all credit can ultimately, with the aid of the banking system, discharge any debt. So as I say, all credit is money. Possession of credit bestows on a creditor a right to discharge a debt, first with the original debtor and ultimately, it is supposed, with any other. It is easy to see, then, where the positioning and credit theories part company on the matters discussed. For Innes, all credit can serve as money because all credit can in effect be trusted. Once we acknowledge that, under conditions of modern capitalism especially, this is far from the case, and that regulations and supportive structures are required for any reliable money, then the positioning process comes to the fore. In the case of credit, only a very restricted form of it, at best, can be used at any time as money; for whatever is positioned is selected because it was already trusted. This money gets its ability to discharge debts not from the nature of any credit involved per se, but from community agreement working through the positioning system involving, in the modern world anyway, government regulation. This is the reason that only state-backed bank debt, and not any other form of debt, currently serves (is positioned) as money, at least at the level of the national community. Innes, I have noted, objects when the term ‘money’ is restricted to that associated with the state. However, it is clear that there is more going on here than naming. The legal tender laws that accompany processes of positioning designate that the kind of thing identified (positioned) as legal tender is associated with legal rights, thereby endowing it with a degree of trust and stability. It is these laws that determine that the kind of thing that is (positioned as) legal tender must, typically, be accepted if an appropriate amount of it is offered to pay an existing debt. Thus, to recall from the preceding chapter, in the UK, currently the Bank of England informs us that5: Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender. So, whatever is positioned as legal tender can be used to discharge debts. If offered, the creditor in effect must accept it. It is legal tender laws that determine that the legal tender or money carries the power of being a general means of payment. There is reason, then, to suppose that only legal tender can fulfil the functions of money. The existence of these laws or regulations clearly represents a significant challenge to Innes’ theory. For, according to the latter, it is the nature of credit per se that grounds money’s general debt discharging powers. On this view, there is no obvious reason for legal tender laws (that allocate payment rights and obligations) to exist. Innes is aware of this challenge

178  Topics in scientific ontology and he does seek to address this problem for his theory. I do not think he succeeds, or even provides much of a case, but it is instructive to consider how he proceeds. 2.3  Legal tender laws In fact, Innes’ orientation to legal tender regulations is entirely dismissive. His main case against the inconvenient fact of their existence is found in the earlier 1913 paper6. And once the latter paper is viewed from the perspective of how Innes interprets legal tender laws, it is evident that, at one level, the paper is in part a relentless attack upon the very idea of them7. His approach is multifaceted. He asserts, first, that they are misunderstood. Instead of their being interpreted (correctly) as a right to use the legal tender as a way of discharging existing debts, Innes claims they are mostly (mis)interpreted as a right of creditors to compensation in terms of coin or an equivalent. In this, they only cause harm. For in times of ‘suspicion’, participants all seek to hold money in the form of the legal tender or coins, believing this is their right. Because the system cannot support this, the result is panic. The possibility that, on a daily basis, reassurance is instilled (and the number of occasions of panic reduced) either by the false belief of participants that obtaining coins is always possible or, and especially, by the correct belief that debts can always be cancelled using the legal tender is not considered. Nor does Innes consider whether there would be benefits to clarifying to all community participants how legal tender laws actually operate. Rather, Innes’ focus is only on the possible negative consequences of their being misunderstood, allowing him to recommend their abolition: The abolition of the law of legal tender would help to mitigate such a [panic] situation by making everybody realize that, once he had become a depositor in a bank, he had sold his credit to that bank and was not entitled to demand payment in coin or government obligations. (Innes, 1913, p. 405) If the noted misinterpretation of legal tender laws by the general public causes problems, even the correct interpretation of legal tender laws is held by Innes to be contrary to the intention behind their introduction. The latter was not to determine a legal means of paying a debt, but to maintain the value of the coins: The purpose of such laws was not to make gold or silver a standard of payment but merely to require that creditors should not refuse payment of their credit in coins issued by the government at the value officially put upon them, no matter of what metal they were made; and the reason for these laws was not at all to provide a legal means

Positioning and credit theories of money  179 of paying a debt, but to keep up the value of the coins, which, as I have explained, were liable to constant fluctuation either by reason of the governments issuing them at one value and accepting them at another, or by reason of the insolvency of the governments owing to their excessive indebtedness. (Innes, 1913, p. 404) Furthermore, even with respect to this original intention, the laws are ultimately unnecessary. Or at least, this is so if the finances of the community are properly conducted: it seems to me to be certain that such laws are unnecessary for the maintenance of the monetary unit in a country with properly conducted finances. ‘Receivability for debts due the government,’ to use Chief justice Chase’s expression, relative to inconvertible notes, is the real support of the currency, not laws of legal tender. (Innes, 1913, p. 406) Eventually, Innes gets to the idea of stabilising monetary affairs by creating (through positioning) a specific or ‘standard’ form of money. This idea, however, is rejected as simply unnecessary. Innes assumes that the legal tender will always be a form of credit, of course, and from this perspective he reasons that if a creditor is unhappy with the form of credit held, this simply means that he or she is unhappy with a specific debtor. In this case the creditor need only transform the credit into a different form, with a different debtor, typically a reliable banker. Regulation to stabilise the monetary process is never required: But it may be argued that it is at least necessary that the government should provide some standard ‘money’ which a creditor is bound to accept in payment of his debt in order to avoid disputes as to the nature of the satisfaction which he shall receive for the debt. But in practice no difficulty would be experienced on this score. When a creditor wants his debt paid, he usually means that he wants to change his debtor; that is to say he wants a credit on a banker, so that he can use it easily, or keep it unused with safety. He, therefore, insists that every private debtor shall, when the debt is due, transfer to him a credit on a reputable banker; and every solvent debtor can satisfy his creditor in this manner. No law is required; the whole business regulates itself automatically. (Innes, 1913, p. 406) This, however, assumes away the problem. If any credit is equally able to cancel any debt, why change the debtor? And if it is not able to, why assume that the debtor can always be changed? Notably, the trustworthiness of a ‘reputable’ banker and the trust that participants hold in any such banker are not deemed issues worth addressing. It is only because this is so that Innes is able to overlook the positioning system and treat

180  Topics in scientific ontology the effects of legal tender laws in so partial a fashion. As with the rest of his analysis, Innes here advances his argument on the presumption that trust always justifiably persists. Essentially, legal tender laws are at best unnecessary and most likely to make things worse. Clearly, the foregoing passages, and others like them, reveal that Innes recognises that the fact of legal tender laws is a problem for his theory. Equally clearly, his ways of dealing with them are ultimately unsatisfactory, being overly partial at best and/or resting as ever on the belief that a trust in money qua credit, any credit, is essentially ever present and warranted, so that regulations are an unnecessary interference at best. I can nowhere find an argument (as opposed to assertion) to ground the claim that legal tender laws either have no positive impact or are not necessary for general debt discharging powers to be attributed. It is as if making negative comments about them justifies ignoring their role in money’s constitution. Of course, the claimed efficacy of legal tender laws threatens the credit theory through its appearing to undermine not merely its first component thesis that all credit is money, but also its second component thesis that money can only be credit. It allows that money could, for example, be an (appropriately positioned) commodity. For the legal tender laws relating to generalised debt discharging apply to whatever occupies the position of legal tender; and there is no intrinsic or legal reason that the occupant should always be a form of credit. So, the existence of these regulations grounds a challenge to the second component thesis as well, the matter to which I turn next. 2.4  Component thesis 2: all money is credit To this point, I have explored the claim of the credit theory of money that all credit is money. In many ways, the second component thesis − that money can only be credit − is even more difficult for Innes to defend, despite it being the component that those currently self-styled as ‘credit theorists’ seem quickest to endorse. For, to convince us that, as a matter of principle or logic, nothing but credit can serve as money, Innes must somehow demonstrate that money’s powers stem necessarily from something unique to credit. This he does not do. In consequence, he is left with no strategy other than considering actual instances of money and arguing (against competing interpretations) that in each case the money must be interpreted as credit (a strategy that seems to have been adopted by ‘credit theorists’ since). Here, then, Innes’ defence can only be temporally established at best − that is, until the next challenge; the goal can only be to convince that all money so far considered has been credit. In contrast, one strategy for undermining the component thesis that all money is credit is relatively straightforward. It is simply to provide a counterexample. And in fact, this is easily supplied. I focus here on one

Positioning and credit theories of money  181 such example of commodity money, specifically the use of tobacco money in Virginia and neighbouring states during the colonial period. I choose this particular example for several reasons: first, most commentators on the topic agree that in this instance tobacco indeed served as a form of money; second, it seems very obviously not to have been a form of credit/ debt; third, there was very clearly legislation compelling creditors to accept payment in tobacco; and, fourth, Innes comments explicitly upon this case as well. So this example alone, if matters are as I suggest, will be sufficient to undermine the second basic tenet (and thereby the whole) of the credit theory. It also allows a further focus on Innes’ reasoning on relevant matters. Let me then consider it. My assessment, defended elsewhere (Lawson, 2016), is specifically that throughout most of the colonial period, Virginia, and indeed Maryland and North Carolina, used tobacco as (commodity) money. This was because of a shortage of coins. In 1619 the Virginia legislature ‘rated’ high-quality tobacco at three shillings per pound and in 1642 made it legal tender (see Breen, 2001). Most business exchanges in Maryland, as well as levies, were conducted in terms of tobacco. North Carolina used tobacco as a general means of payment until the outbreak of the Revolution in 1775. This tobacco money was eventually abandoned in the second half of the eighteenth century (see Scharf, 1967; Breen, 2001). But it existed for a period. And fundamentally, at no stage was (this positioned) tobacco per se interpreted as a token of some central authority’s (redeemable) debt (or anyone else’s). It was simply tobacco as a commodity that (being found to be a relatively liquid form of value) was positioned as legal tender or money and so used by its holder, as a legal right, to discharge the debts of those holding it. It was the tobacco itself, with given quantities (so many pounds) valued in the prevalent unit of account (shillings), positioned/accepted as legal tender, that was money and served the functions of money. How can the credit theory be saved in the face of considerations such as these? For Innes to maintain that money is always credit, he ought, it seems, to deny aspects of the foregoing details and insist that tobacco was never really (positioned as) money after all, but rather was at most a token of credit. However, he does not take this route at all, but rather deals with the case in question and related ones by interpreting them as exceptional: There is not and there never has been, so far as I am aware […] a law compelling a creditor to receive payment of a debt in gold or silver bullion, and the instances in colonial days of legislation compelling creditors to accept payment in tobacco and other commodities were exceptional and due to the stress of peculiar circumstances. Legislatures may of course, and do, use their sovereign power to prescribe a particular method by which debts may be paid, but we must be chary of accepting statute laws on currency, coinage or legal tender, as illustrations of the principles of commerce. (Innes, 1913, p. 393)

182  Topics in scientific ontology And elsewhere Innes refers to ‘various colonial laws, making corn, tobacco etc., receivable in payment of debt and taxes’, suggesting: The laws merely put into the hands of debtors a method of liberating themselves in case of necessity, in the absence of other more usual means. But it is not to be supposed that such a necessity was of frequent occurrence, except, perhaps in country districts far from a town and without easy means of communication. (Innes, 1913, pp. 378–9) This clearly is no defence of (the second tenet of) the credit theory at all. Most obviously, the fact that the situation was ‘exceptional and due to the stress of peculiar circumstances’, and that this use of legal tender laws may not have been ‘of frequent occurrence, except, perhaps in country districts far from a town and without easy means of communication’, detracts not at all from the situation that commodity money existed. Even the simple recognition that the legislatures ‘do’ use ‘their sovereign power to prescribe a particular method by which debts may be paid’ is enough to undermine the credit theory as formulated. Nor is the question of the bearing of all this on the principles of commerce a matter of relevance. The matter that is of relevance is that it is far from being the case that the occupant of the money position must be (a form of) credit. Money has been, and so can be, a (positioned) commodity. The credit theory is erroneous. Innes is unable to respond to the foregoing, of course. But since I first made the argument, Mark Peacock (2017), though cautious in his support for the credit theory, has offered an interesting counterargument in seeking to preserve Innes’ thesis. Peacock usefully divides the question for credit theorists into two parts, asking ‘(i) whether tobacco was in fact money at all, and (ii) if so, whether it was indeed a type of commodity (non-credit) money’ (Peacock, 2017, p. 1841). Finding a fair bit of support even amongst credit theorists for the idea that tobacco was money, or that it should be so interpreted, his main focus is on whether, if this is the case, it was an example of commodity money (Peacock, 2017, p. 1484). Peacock recognises that central to my argument is the fact that legislatures ‘levied taxes in tobacco, [and so….] declared tobacco a medium in which their debtors could cancel their obligations to the legislature [but ….] did not issue this medium as a token of their debt’ (Peacock, 2017, p. 1485). To address whether this makes tobacco itself a non-credit money, Peacock uses a line of argument that Innes might have been expected to use: Let us ponder the non-issuance of tobacco by legislatures as a decisive feature of tobacco and return to Innes, who addresses this matter, not in the context of tobacco, but in that of gold coin (1913, p. [402]). Gold coin, Innes writes, becomes the government’s obligation to accept coin in payment of taxes as soon as coin is stamped. Coin thereby becomes a liability of the government. Once stamped, coin ceases to be a ‘mere

Positioning and credit theories of money  183 commodity’ and becomes ‘a token of indebtedness’. […] Innes (1913, pp. [381, 402]) attaches great importance to the stamp which coins bear but which tobacco lacks, and this would lead him to exclude tobacco from the ranks of money. But even without a stamp, tobacco could be conceived as a token of debt, ‘so long as the receiver knows what it stands for and the giver acknowledges his obligation to take it back in payment of a debt due’ (Innes, 1913, p. [402]). Tobacco fulfils Innes’s conditions about the receiver and giver, even if colonial legislatures do not answer to the name of ‘givers’ in the way that an issuer of coin is the original giver thereof. (Peacock, 2017, p. 1485) This conveniently reintroduces the question of whether gold coins issued by the government were really credit, one to which I earlier promised to return. And it seems to me that, in seeking to establish that they were credit, Innes essentially resorts to assuming what he must prove. Let me explain. The government, as Innes notes, puts a stamp upon the pieces of gold. But this stamp does not convey the promise that the coins will be received by the government in payment of taxes or other debts. The latter right, rather, is laid down by legal tender laws. Unless it is rendered definitional that anything which cancels a debt is a credit (so that the credit theory of money is but a banality, as earlier noted), the argument that the coins are no more than tokens of debt remains to be made. An alternative, simpler and at least as plausible interpretation is that the stamping of the gold does indeed make a difference, but that difference is that the commodity gold has now been positioned in a manner that, qua a positioned item, it constitutes (commodity) money, so that it, or its holders, have become subject thereby to legal tender laws. Innes is right to insist that money cannot be a ‘mere commodity’. But there is no reason to interpret it thereby as (mere) credit. Rather it is, instead, now an appropriately positioned commodity; this is the nature of commodity money8. How might we distinguish between the two competing interpretations? Specifically, if Innes understands the notion of commodity money as the prevailing view, how might he compel others to reject their preconceptions and accept his (credit theory) alternative? Here Peacock (in the extracted passage above) notes Innes’ criterion that, in effect, anything could (and perhaps should) be conceived as a token of debt, ‘so long as the receiver knows what it stands for and the giver acknowledges his obligation to take it back in payment of a debt due’. Of course, Peacock’s concern here is with the notion of tobacco constituting a commodity money, and he seeks to use the noted criterion against my assessment that tobacco really was positioned as (commodity) money without it thereby becoming a form of credit. Peacock supposes, in the above noted passage, that the case in question ‘fulfils Innes’s conditions about the receiver and giver’. However, he does so without explaining

184  Topics in scientific ontology why or how he draws the inference, presumably believing it must be the case that both sides interpret the tobacco as a token of the legislature debt. However, it is not just that colonial legislatures did not answer to the name of ‘givers’; there is no sense in which they were. They did not issue tobacco, let alone promise to redeem it; they merely imposed legal obligations on all creditors (including the state) to accept it when offered as a means to cancel debts. Nor is it clear that those holding tobacco understood that they were holding a promise to pay. It is presumably for this reason that Innes himself never actually deals with, or otherwise addresses, the case of tobacco using this criterion, but rather repeatedly describes the episode not as a case of credit money, but rather as being exceptional. The criterion of Innes that Peacock employs is, though, a useful one. Peacock supposes that the fact that gold coins are thereby (using this criterion) interpreted as credit can be used to establish by analogy that tobacco is as well. I think it more likely, however, that the analogy works the other way; that the case of tobacco money provides support for interpreting the gold coins as commodity money. In fact, the criterion in question, as Peacock notes, is formulated by Innes in his 1913 paper precisely in the context of arguing that gold coins are really a form of credit. Here the presumption is that the criterion is met, that those involved are receivers and givers who fully understand and accept Innes’ conception that coins are credit on the government and the government in issuing them accepts the obligation to take them back as a way of discharging tax debts. But there is a tension with Innes supposing that community participants including the government see things in this way. For it is a premise of Innes’ overall argument that the correctness of the credit theory is not widely appreciated anywhere, even amongst other money theorists; and that the behaviour of community participants in general, governments included, is explained by their being none too clear about how the monetary system works, even down to the meaning of a money being legal tender. Moreover, if we turn to his later (1914) paper, we find Innes emphasising explicitly that neither governments nor other participants after all really ‘understand’ that where gold coins are involved, money is credit with an obligation on the part of governments, through taxation, to take it back in payment of debts due. In fact, we are told that what the ‘government thinks it is doing’ when it introduces the coins ‘is of no consequence’: ‘It is true that a coin does not purport to convey an obligation, there is no law which imposes an obligation, and the fact is not generally recognized’ (Innes, 1914, p. 160, emphasis added). He adds: What the government thinks it is doing when it gives coins in exchange for bullion, or what name the law gives to the operation—all this is of no consequence. What is of consequence is the result of what they are doing, and this, as I have said, is that with every coin issued

Positioning and credit theories of money  185 a burden or charge or obligation or debt is laid on the community in favor of certain individuals, and it can only be wiped out by taxation. (Innes, 1914, p. 161) The latter claim, that ‘with every coin issued a burden or charge or obligation or debt is laid on the community’ − in other words, that every coin is a token of credit − of course, is precisely what Innes needs to establish. The criterion being suggested for deciding whether coins are really credit is that receivers and issuers alike recognise the obligations of the latter to redeem them. Yet Innes in these passages insists that every coin etc. issued is a credit and a debt obligation irrespective of whether this is recognised by community participants, and furthermore seemingly acknowledges that typically it is not ‘recognised’. In other words, there is no reason to suppose the criterion emphasised by Peacock is met and reason to suppose that it is not. Innes suggests here, rather, that it does not matter. In short, Innes is assuming that which he needs to demonstrate. He is taking it as a given that government coins are credit, whether community participants, including the government, recognise this or not. The acknowledgement in effect that participants do not see money as credit, moreover, suggests that he is wrong. For if the issuer and receiver of coins do not see them as tokens of credits and debts, then the rights and obligations governing their use must be imposed by the legal system; it is legal tender laws that determine the rights and obligations involved. But such laws do not at all stipulate or otherwise determine that the sort of thing which has to be accepted, if offered to discharge an obligation, must, because so used, be a form of credit. That is a presumption of the credit theory that its proponents need to demonstrate. It is not definitional (without being a banality), but something that must be established. Innes, of course, rejects the idea that a debt discharger could in fact be other than a credit and looks to the idea of a common law right that is analytic to the notion of credit: Nothing else but a credit gives this common law right, and consequently every document or instrument, in whatever form or of whatever material, which gives this right of cancelling a debt by returning it to the issuer is a credit document, an acknowledgement of debt, an ‘instrument of credit’. Now a government coin (and therefore also a government note or certificate which represents a coin) confers this right on the holder, and there is no other essentially necessary right which is attached to it. The holder of a coin or certificate has the absolute right to pay any debt due to the government by tendering that coin or certificate, and it is this right and nothing else which gives them their value. It is immaterial whether or not the right is conveyed by statute, or even whether

186  Topics in scientific ontology there may be a statute law defining the nature of a coin or certificate otherwise. Legal definitions cannot alter the fundamental nature of a financial transaction. (Innes, 1914, p. 161) But this follows only if it is first established that the gold coin is a form of credit. Here Innes, as I say, is implicitly assuming what he needs to demonstrate. And it is certainly not ‘immaterial whether or not the right is conveyed by statute’. For where the coins are not credit and seemingly no one interprets them as such, it is these laws, as I say, that determine the rights and obligations that govern their use9. To return, then, to the primary topic before us, there is even less reason to suppose that those who used tobacco money viewed their rights and obligations regarding its employment as a feature of common law rooted in the notion of tobacco being a form of credit, and little support for supposing otherwise to be drawn from Innes’ reasoning as to why gold coins are but tokens of debt. Furthermore, if to repeat, even Innes does not interpret tobacco as (a token of) credit money. Rather, he accepts that the rights and obligations regarding its use are matters determined by the local legislature and prefers to dismiss the case on grounds of it being ‘exceptional’ or ‘peculiar’. This positioning of specifically tobacco as money may have been unusual, taking a historical perspective; but this constitution of money through processes of positioning, I am suggesting, is not. Indeed, money is always so constituted. This is the positioning theory of money, and when it is compared to Innes’ credit theory alternative, I argue, it is found to be significantly more explanatorily powerful. In sum, in a scenario such as modern capitalism, wherein trust is hard won, the positioning theory is required to render all aspects of money intelligible. Innes’ credit theory of money presupposes a scenario wherein trustworthiness, both of intent and in terms of ability to meet obligations, is always guaranteed, so that, in effect − at least apart from situations dismissed as exceptional and the like − any potential benefits of positioning (including the associated legal tender laws) are rendered unnecessary, as are the trust-inducing capacities of the (positioned) money item. If all credit were (equally) good, and all accepted without question as a liquid store of value, then any credit could ultimately be used to discharge any debt (of the same measure). Once, though, the basic realities of capitalism (a system of money accumulation or profit making, based, in effect, on the would-be profiteer regularly seeking to get one over on others − customers, suppliers, employees etc. − to make a profit), and so the necessity, and difficulties, of inducing, reinforcing and sustaining trust and trustworthiness are taken into consideration, there is seen always to be far more to money than derives from the nature of credit per se. It turns out that the rights and any trust that Innes seems to suppose are bound up with credit, and are implicitly recognised as being at the core, or

Positioning and credit theories of money  187 part of the nature, of money actually lie elsewhere in the system. Rather than being analytic, or customarily bound, to credit per se, they are features that arise from the positioning process itself, along with capacities of the kind of thing contingently positioned as money, both operating with state backing. A process of successful positioning results in the emergence of a money with general discharging and purchasing power. The latter powers, though, are nominal features of money. They are accounted for not by the nature of credit per se, but by the nature of money itself, turning on its properties of being positioned in a relevant way and being trusted in a relevant sense, as elaborated.

3  Theories of credit money and of commodity money It would seem to be an implication of the foregoing analysis that all insightful theories in which the issue of trust is not essentially ignored will turn out to be instances of the positioning theory in effect, with perceptions of processes of positioning being central to their explanatory insights, however implicit. Many money theorists do maintain that only credit, albeit a specific form, constitutes money. However, these theorists turn out to be maintaining not a credit theory of money at all, strictly speaking, but a theory of credit money, which is a special case of the positioning theory. I do doubt, moreover, that those very influential accounts held as most insightful by this group are even restricted to supposing that the positioned stuff must be credit. No doubt these latter few remarks are rather contentious, to say the least. Let me, though, pursue the matter by very briefly focusing on an account that might be strongly expected not to conform to my conjectures, and yet, I will argue, does so. I consider Keynes’ theory of money in this light. For, currently, Keynes’ conception is not only a particular inspiration to numerous ‘credit theorists’, but regularly claimed as a version of the credit theory by its proponents. Moreover, Ingham (2018) is explicit in repudiating any suggestion that Keynes’ conception conforms to the positioning theory, let alone allows that items positioned as money might include commodities. Yet despite all this, I believe it is fairly easy to demonstrate that Keynes does in effect embrace the positioning (not the credit) theory of money (even if the positioning terminology is not used), and that he accepts the fact of commodity money, that commodities have been the form of (i.e., occupants of the position of) money, or money proper. So let me do so. 3.1  Keynes’ conception as an illustration of the positioning theory of money Keynes’ conception of money is most succinctly elaborated at the start of his A Treatise on Money (in a chapter or ‘book’ called ‘The nature of money’). At first Keynes suggests that money is the thing that answers

188  Topics in scientific ontology to a description or title that is the unit of account or value: ‘Perhaps we may elucidate the distinction between money and money of account by saying that the money of account is the description or title and the money is the thing which answers to the description’ (Keynes, J. M. 1971 [1930], p. 3). Clearly, there is a sense in which all commodities and debts with exchange values answer to the unit of account in having values expressed in terms of it. Keynes, though, talks of the (single) thing; and instead of referring to the thing as having values expressed in terms of the value unit, he seemingly interprets the latter value unit as ‘the description or title’ to which the money thing answers. At this point, then, the most plausible interpretation is that Keynes is noting the common practice of referring to money loosely as so many pounds or dollars or euros. Some, and perhaps most, commentators interpret Keynes, at this point, as suggesting that money is somehow directly determined by the unit of account, implying thereby perhaps that it must take the form of credit. Ingham informs us, for example, that ‘It is a constitutive tenet of credit theory that the ability of “things” to bear or transmit monetary value is constituted entirely by their denomination in a unit (money) of account’ (Ingham, 2018, p. 838, emphasis in the original); and it may seem that it is this tenet that, in the noted passage, Keynes is accepting. But this is not so. For Keynes immediately elaborates his meaning, adding a passage (one seemingly rarely reproduced by interpreters of Keynes) that reveals that he is presupposing rather more. Indeed, I suggest it amounts to a reasonably clear, if implicit, acknowledgment of the positioning process: Now if the same thing always answered to the same description, the distinction would have no practical interest. But if the thing can change, whilst the description remains the same, then the distinction can be highly significant. The difference is like that between the king of England (whoever he may be) and King George. (Keynes, J. M. 1971 [1930], pp. 3–4) The king of England is clearly a position, whilst King George (V) is a specific and contingently positioned occupant. George occupied the position king of England when Keynes was writing and so assumed that position title10. In the case of money, the positioned occupants, according to Keynes (in the pages that follow the noted passage), include commodities being eventually replaced by bank debt. In other words, this elaboration reveals that when Keynes suggests there can be changes in the (sort of) thing that answers to ‘the description’, he is effectively recognising, and indeed meaning, that there can be a change in the occupant of the money position. Though the term ‘position’ is not explicitly mentioned, it is clearly presupposed by his reasoning.

Positioning and credit theories of money  189 So unlike Innes, who has no need for a positioning conception, Keynes presupposes that positioning is centrally involved with the constitution of money. Moreover, it is clear that, even when credit/debt is the position occupant, it is never the case that all credit/debt is (positioned as) money − or at least it is not (positioned as) money proper, namely that which possesses general debt discharging and purchasing power. Keynes recognises that certain forms of credit/debt may be used to settle some transactions, and so ‘for many purposes […] are themselves a serviceable substitute for money proper in the settlement of transactions’; and allows that when so used, ‘we may call them bank money’. But he immediately qualifies this observation with the caution: ‘not forgetting, however, that they are not money proper’ (Keynes, J. M. 1971 [1930], p. 5). However, the foregoing remarks are historical, and Keynes recognises that this private or bank debt, too, evolved into money proper: ‘the State may then use its chartalist prerogative to declare that the debt itself is an acceptable discharge of a liability. A particular kind of bank money is then transformed into money proper’ (Keynes, J. M. 1971 [1930], p. 6, emphasis added). Keynes might have added ‘through positioning’. And, fundamentally, Keynes clearly accepts that commodities, too, have been positioned as money, and not merely during exceptional episodes. Keynes argues, indeed, that ‘In the 18th century commodity money was […] the rule’ (Keynes, J. M. 1971 [1930], p. 14). A feature of the general positioning conception emphasised throughout is that when an item is positioned as an X this item, qua positioned item, will not typically operate precisely as it did before positioning; positioning makes a difference to its character. This reasoning applies no less, of course, in the case of money. Keynes makes the same sort of observation in the case where it is debt/credit specifically that is so positioned: When, however, what was merely a debt has become money-proper, it has changed its character and should no longer be reckoned as a debt, since it is of the essence of a debt to be enforceable of something other than itself. To regard [it] even when it conforms to an objective standard, as still a debt will suggest false analogies. (Keynes, 1971 [1930], p. 6) Keynes’ conception, then, is very different from a credit theory of money such as that advanced by Innes. It is not the case that money is credit and nothing but credit. Indeed, money is no more credit per se than it is any commodity per se. Rather, something is money, or money proper, though being appropriately positioned. That which comes to be so positioned can be a form of credit. But if it is credit, it is credit qua a kind of thing that comes to be transformed into (the stuff) of money; it is not already money. Only positioned credit is ever so. In the case of credit money, a chosen form

190  Topics in scientific ontology of credit is transformed through the positioning process whereupon, as money or money proper, it acquires the powers to function as a general debt discharger or a basis for making purchases. So whereas for Innes it is in the nature of credit that all debt obligations will be met, and they are always met by credit, for Keynes it is quite different. It is the community, typically as represented by the state, that ensures that debt obligations are met, and the state that also determines the (positioned) kind of thing that, qua positioned item, is the money proper, and so the item that thereby will service any debt. That is, just as ‘It is for the State to declare, when the time comes, who the king of England is’ (ibid, p. 4), so it is for the state to decide at any period in time what the prevailing form of (occupant of the position) money is. Keynes summarises these points as follows: Furthermore it is a peculiar characteristic of money contracts that it is the State or community not only which enforces delivery, but also which decides what it is that must be delivered as a lawful or customary discharge of a contract which has been concluded in a money of account. The State, therefore, comes in first of all as the authority of law which enforces the payment of the thing which corresponds to the name or description in the contracts. But it comes in doubly when, in addition, it claims the right to determine and declare what thing corresponds to the name, and to vary its declaration from time to time – when, that is to say, it claims the right to re-edit the dictionary. This right is claimed by all modern states and has been so claimed for some four thousand years at least. (Keynes, J. M. 1971 [1930], p. 4) As I say, on examination, Keynes’ conception is found to be after all a very different theory from that of Innes. Innes’ account is indeed a credit theory of money. For any credit is matched to a debt obligation, and it is tacitly assumed that all credits can and will be redeemed. If all credit is good, then any debt can be met with any credit to an appropriate amount. This, for Innes, is essentially all there is to money. All credit and only credit is money. Keynes, in contrast, recognises the importance of distinguishing money proper, constituted by harnessing the capacities of some material kind of thing through positioning (in just the manner that King George is constituted by appropriately positioning George). On being positioned as money, some chosen kind of thing, qua positioned thing, gains the powers of being a general debt discharger because the state ensures that it has this function (through legal tender laws). Furthermore, not just any kind of thing can be money proper; rather, the occupant of this position is again determined by the state (no doubt on the basis of its being expected to serve as a reliable store of liquidity).

Positioning and credit theories of money  191 I am not claiming, of course, that Keynes embraced the positioning theory explicitly as such. But it is clearly presupposed in Keynes’ reasoning, and he does come very close to employing central categories of the theory. This renders Keynes’ conception something radically different from a credit theory of money. Money does not come into being through each exchange, whereby a commodity is given up to a credit interpreted as money. Rather, money comes into being through processes of positioning and thereafter facilitates all such (monetary) exchanges.

4  Final comments Contemporary theorists of money tend to agree with Schumpeter that commodity and credit/claim theories of money are incompatible: ‘There are only two theories of money which deserve the name … the commodity theory and the claim theory. From their very nature they are incompatible’ (Schumpeter, 1917, p. 649). In deciding whether the theories are indeed incompatible, much depends on how they are interpreted. Contemporary theorists who identify as ‘credit theorists’ mostly depart from Innes in supposing that only a subset of credit constitutes money. In this, they are also clearly departing from any credit theory of money worthy of the name, however, and are really defending a conception of credit money (formed out of a particular form of credit). Any such conception, implicitly, is an instance of the positioning theory. So, too, most accounts that focus on specific commodities are best interpreted as theories of commodity money − theories that are also appropriately conceived as instances of the positioning theory (see Lawson, 2016). Thus, I would suggest that credit theories and commodity theories, as typically understood, are after all (if appropriately conceptualised and consistently articulated) compatible, being but instances of a theory that accounts for the social construction of social reality more generally.

Notes * For helpful comments on a first draft, I am grateful to Jamie Morgan, Mark Peacock and Roy Rotheim. 1 And in the 1914 paper Innes writes: Readers are warned that it is essential to bear constantly in mind the definition of credit, as laid down in the first article. Those who are not accustomed to this literal use of the word “credit,” may find it easier to substitute in their minds the word “debt.” Both words have the same meaning, the one or other being used, according as the situation is being discussed from the point of view of the creditor or the debtor. That which is a credit from the point of view of the creditor is a debt from the point of view of the debtor. (Innes, 1914, p. 152) 2 As I say, if money were so delineated as to be tied to government coins etc., even if always interpreted as credit, its constitution would be found to depend

192  Topics in scientific ontology in part on the process whereby this delineation is achieved, and so on factors that are extrinsic to credit. Indeed, money would clearly be found to depend on a process of positioning (involving accompanying legal tender laws), rather than features analytic (or conventionally tied) to credit per se. This alone would undermine the fundamentals of Innes’ credit theory of money. 3 Innes, indeed, supposes that he has provided an account of the nature of money, albeit an account that most of ‘the public’ fail or refuse to recognise: The main obstacle to the adoption of a truer view of the nature of money is the difficulty of persuading the public that ‘things are not the way they seem,’ that what appears to be the simple and obvious explanation of every-day phenomenon is incompatible with ascertainable, demonstrable facts – to make the public realize, as it were, that while they believe themselves to be watching the sun’s progress round the earth, they are really watching the progress of the earth round the sun. It is hard to disbelieve the evidence of our senses. (Innes, 1914, p. 154) 4 Innes adds: Now a government coin (and therefore also a government note or certificate which represents a coin) confers this right on the holder, and there is no other essentially necessary right which is attached to it. The holder of a coin or certificate has the absolute right to pay any debt due to the government by tendering that coin or certificate, and it is this right and nothing else which gives them their value. It is immaterial whether or not the right is conveyed by statute, or even whether there may be a statute law defining the nature of a coin or certificate otherwise. Legal definitions cannot alter the fundamental nature of a financial transaction. (Innes, 1914, p. 161) And, again, as already briefly noted, this sort of money is interpreted as redeemable through the state use of taxation. For all taxes create a debt of each and every individual to the state, these being debts that money (interpreted as credit held by individuals on the state) is used to discharge: […] with every coin issued a burden or charge or obligation or debt is laid on the community in favor of certain individuals, and it can only be wiped out by taxation. Whenever a tax is imposed, each taxpayer becomes responsible for the redemption of a small part of the debt which the government has contracted by its issues of money, whether coins, certificates, notes, drafts on the treasury, or by whatever name this money is called. (Innes, 1914, p. 161) 5 Downloaded on December 13, 2017 from http://edu.bankofengland.co.uk/ knowledgebank/what-is-legal-tender/. 6 Indeed, in the second of his two papers, Innes seems mostly to proceed as if it has been established that legal tender laws can have no positive impact. Legal tender laws are referred to explicitly only twice. The first instance references a French example of their being non-operative. Specifically, Innes references the case of ‘France not so long ago’, where different money units prevailed, albeit all called the livre, and wherein a government money, subject to legal tender laws, was valued less than bank money. The result, Innes writes, was ‘that the bankers refused, in spite of the legal tender laws, to accept a livre of credit on the government as an equivalent of a livre of credit on a bank’ (Innes, 1914, p. 152). The second instance consists the following standalone sentence: ‘Laws of legal tender promote panics’ (Innes, 1914, p. 168). So legal tender laws are represented as either being ignored or causing of panics.

Positioning and credit theories of money  193 7 And many modern money theorists remain critical (e.g., see Wray, 2012, especially sections 2.2–2.4) 8 It is often supposed that the alternative to supposing that the nature of money lies in the nature of credit is that it lies in the nature of some commodity. But it would be misleading to represent those accepting a theory of commodity money as supposing this, as interpreting commodity money as a ‘mere commodity’. Marx, for example, is clear when focusing on gold that ‘gold, when a mere commodity, is not money’ (1974, p. 106). More expansively, Marx writes in the Grundrisse that: Gold and silver, in and of themselves, are not money. Nature does not produce money, any more than it produces a rate of exchange or a banker […]. To be money is not a natural attribute of gold and silver, and is therefore quite unknown to the physicist, chemist etc. as such. (Marx, 1973, p. 283) 9 Presumably, if all coins were tokens of credit but few recognised this, it would be the legal tender laws that determined the operative rights and obligations in practice anyway. 10 George occupied that position having taken it over from Edward (VII), and before being replaced (as position occupant) by another Edward (VIII).

References Breen, T. H. (2001) Tobacco Culture, Princeton: New Jersey Press. Grierson, P. (1977) The Origins of Money, London: Athlone Press. Ingham, Geoffrey (2018), ‘A critique of Lawson’s “Social positioning and the nature of money”’, Cambridge Journal of Economics, (42), 837–850. Innes, Alfred Mitchell (1913) ‘What is money?’ Banking Law Journal, May, 377–408. Innes, Alfred Mitchell (1914) ‘The credit theory of money’, Banking Law Journal, December/January, 151–68. Keynes, John Maynard (1971) [1930] A Treatise on Money, Vol. I, The Pure Theory of Money, reprinted in The Collected Writings of John Maynard Keynes, London: Macmillan for the Royal Economic Society. Marx, Karl (1973) Grundrisse: Foundations of the Critique of Political Economy (rough draft), translated by M. Nicolaus, Harmondsworth: Penguin Books. Marx, Karl (1974) Capital, vol. I, A Critical Analysis of Capitalist Production, translated by S. Moore and E. Aveling, ed. by F. Engels, London: Lawrence and Wishart. Lawson, Tony (2016) ‘Social positioning and the nature of money’, Cambridge Journal of Economics, 40(4), pp. 961–996. Lawson, Tony (2018a) ‘The constitution and nature of money’, Cambridge Journal of Economics, 42(3), pp. 851–73. Lawson, Tony (2018b) ‘Debt as money’, Cambridge Journal of Economics, 42(4), pp. 1165–81. Peacock, Mark S. (2017) ‘The ontology of money’, Cambridge Journal of Economics, 41(5), 1471–88. Scharf, J. Thomas (1967) History of Maryland: From the Earliest Periods to the Present Day, Hatboro, PA: Tradition Press. Wray, L. Randall (2012) Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems, Basingstoke: Palgrave Macmillan.

Part 4

The nature and dynamics of processes of emergence, reproduction and transformation

7 Emergence, morphogenesis, causal reduction and downward causation*†

1 Emergence What is there to say about emergence that has not already been said? I suspect very little. And yet divergent claims persist. Here I focus on a prominent pair of contested claims that continually reappear in the literature on emergence, are seemingly defended by leading contributors and yet, in the manner they are often presented at least, seem to me not quite right. My purpose is little more than a systematic examination of what is involved in advancing these claims, with the hope of providing clarification. The two claims I have in mind are those associated with the notions of causal reduction and downward causation. I start, however, with the concept of emergence. ‘Emergence’ is simply a term that expresses the appearance of novelty, or something ­previously absent or unprecedented. Emergent causal properties are often the ­primary focus of the philosophy-leaning literature that employs the concept, though where such properties exist they must be the properties of something, an emergent entity or some such. And an emergent entity, where addressed, is usually found, or anyway held, to be composed out of elements deemed to be situated at a different (lower) level of reality from itself, but which have (perhaps through being modified) become organised as components of the emergent (higher-level) entity or causal totality. Emergence, then, as widely interpreted is ultimately a compositional term, and one that involves components being organised rather than aggregated. So understood, the term itself indicates nothing about how higher-level entities bearing causal powers have come into being. Nor, in and of itself, does it imply anything about any relationship that might hold between the causal powers of the higher-level (emergent) entity and those of its components. Rather, the category of emergence seems often to serve as little more than a placeholder to indicate an incompleteness or gap in the analysis, and specifically an absence of any account of processes whereby unprecedented phenomena occur. It is this gap, I take it, that theories of morphogenesis aim to fill. No doubt, for many, the strategy of adopting a placeholder at this particular juncture of an analysis provides an attractive shortcut. It does seem

198  Emergence, reproduction and transformation prima facie mysterious that a novel form of entity etc., and so order, should ever be possible, whatever the context. This is especially so in the face of the seemingly all-pervasive relevance of the second law of thermodynamics, according to which there is a tendency in everything to messiness or disorder. Nevertheless, order of sorts clearly exists all around us. So, just as clearly, there is a good deal of work to be done explaining its ­appearance in the midst of seemingly relentless tendencies to the contrary, whatever the scenario. It is this explanatory endeavour that many investigators seek to avoid. This is perhaps understandable, at least in some contexts. Very often, a set of phenomena regarded as emergent from lower-level elements of a seemingly quite different sort is collectively taken to comprise the subject matter of a particular domain of study. Social reality, for example, is usually understood as having emerged (and continuing to emerge) from non-social phenomena and constituting a separate realm of study. In the circumstances, many investigators with reason find it convenient to pitch analyses at the level of an emergent order of a form that interests them − say, forms of social causation − employing the term ‘emergence’ to mark the spot where more historical or diachronic explanatory work remains to be done. And much useful research has been carried out in this fashion. 1.1  Causal reduction and downward causation A major problem of using the category of emergence in this place-holding fashion, I believe, is that researchers do often find a need to take positions about the nature of relations between higher-level and lower-level entities and properties. But when armed with little more than a category marking the spot where analysis is missing, speculations based on intuitions (or that resonate with existing prejudices) tend to prevail. In particular, claims and counterclaims persist about relations said to hold between the causal powers of an emergent entity and those of its own components. It is two specific sets of claims about this relation in particular that I want critically to examine here − theses that are respectively associated with particular notions of both causal reduction and downward causation (or topdown causation, as the latter is sometimes termed). I will provide formulations of these conceptions in due course, but note for now that there is a sense in which versions of causal reduction tend in some way or sense to prioritise lower-level causes over higher-level ones, whilst versions of downward causation do the opposite. Both notions, as I say, are usually tied to that of emergence. Thus, while Searle (1992), for example, believes that ‘[o]nce a property is seen to be emergent, we automatically get a causal reduction’ (p. 116), Elder-Vass (2012) informs us that ‘emergence and top-down causation can be reconciled, and that both play important roles in the social world’ (p. 82). My assessment will be that neither conception as usually formulated is sustainable; or rather, I am not convinced of various positive evaluations made, or implicitly advanced, regarding them. Specifically, I am not

Processes of emergence  199 persuaded that the doctrine of causal reduction is of such general validity as causal reductionists hold, and I am doubtful whether the conception of downward causation as formulated has any relevance whatsoever. It is clear that debates over the relevance of these conceptions or theses continue unabated. A likely significant explanatory factor, I am suggesting, is precisely the widespread practice of using the term ‘emergence’ as a mere placeholder marking the spot where relevant diachronic explanatory work remains to be done (and, for some, as a promissory note that it will eventually be). That is, I am speculating that the failure to explore how lower-level causal phenomena become enlisted as components of higher-level causal entities allows contending claims about the relations between the causal powers of the two to go unresolved. The limited aim of this chapter is thus to examine whether a focus on forms of processes of emergence, or their dynamics, can shed light on the relevance of the conceptions or theses in contention. This, as I say, means turning explicitly to, and drawing upon, issues studied under the heading of morphogenesis. The key category to understanding my own position and focus throughout, it will be seen, is that of the organising relational structure of an emergent entity. Any emergent entity, as I have elaborated it above, is essentially a system, by which I mean that it is composed out of other (lower-level) elements that somehow are bound together (and to elements in their environment) and (so) in some sense or ways interrelate. It is the linking or bonding of the components that I express by the notions of relational organisation or organising relational structure of the entity; the latter binds the components to each other and to aspects of the environment. To anticipate the discussion that follows, my basic assessment of much of the literature on emergence is that whilst this (relational) organisational structure tends to be in various ways underplayed by causal reductionists, it is often conflated with the system as a whole by those enamoured with the notion of downward causation.

2  Causal reduction I start with the conception of causal reduction. For completeness, I first briefly consider a rather simplistic version of it according to which the causal powers of an emergent totality or system are held to be reducible to the causal powers of its components. This version is easily dispensed with. For once it is recognised that in all systems, the organisational structure is an essential causal component of the totality, yet one that is extrinsic, and so additional, to the powers of any individual components, it is easy enough to see that this thesis is quite untenable. Consider briefly the construction of a house. The components include bricks, mortar, wood, panes of glass, cement etc. Of course, there will be a context, a plot of land, and this will be prepared so that the various components can relate to it in an appropriate manner. At any stage in the process of construction, an observer will find not only the part of the

200  Emergence, reproduction and transformation building constructed so far, formed out of various components, but also the relational organisation of the latter components (to each other and to elements in their environment). And this organisation will be essential to the house’s construction and properties. As the house is completed, so is the relational organisation of the house’s components; the two – the totality and the organisational structure – emerge simultaneously. Each is causal, but in different ways. The house has the power to provide safety and shelter, to facilitate family or other indoor activities, to be bought and sold, and so on. The arrangement of the parts makes the house feasible. The latter is a case of formal causation. To appreciate the role of arrangement or organisation, imagine the house is taken apart and its various components are then bound together in a blind or random fashion. It is unlikely the outcome would have the causal powers of a house. The organisation or arrangement of the bricks and other components makes a difference. And on this criterion of c­ ausality − that is, of possessing the power or ability to make a difference − the relational organisation is causal. So it is easily seen that it is not the case that the causal powers of emergent systems are reducible to those of their components alone, considered apart from the manner in which they come to be organised. The example just noted is, of course, of a sort where the emergent powers of efficient causation of the totality (the house) can be easily determined or inferred from knowledge of the manner in which the components are arranged (which is why architects and their plans are useful). More typically, however, any such inference process (from components and the manner of their relational organisation to system powers of ­efficient causality) will not be feasible, or anyway not so straightforward − not least because knowledge of (perhaps complex) component interactions will also be required. This recognition does not at all challenge my claim above about the causal contribution of organisational structure. But it is this more complex scenario that is a primary concern here, not least because it is associated with more interesting interpretations of causal reduction. Searle’s notion of causal reduction is perhaps the most widely accepted example. It is, as already noted, formulated with respect to emergent phenomena, but it is only in respect of a system arising out of interactive components that Searle supposes the causal features warrant being referred to as emergent: Suppose, we have a system, S, made up of elements a,b,c… […] In general there will be features of S that are not, or not necessarily features of a,b,c…[…] Let us call such features “system features.”[…]Some system features can be deduced or figured out or calculated from the features of a, b, c… just from the way these are composed and arranged (and sometimes from their relations to the rest of the environment). […] But some other system features cannot be figured out just from the

Processes of emergence  201 composition of the elements and environmental relations; they have to be explained in terms of the causal interactions among the elements. Let’s call these “causally emergent system features.” Solidity, liquidity, and transparency are examples of causally emergent system features. (Searle, 1992, p. 111) If it is such ‘causally emergent system features’ that most concern Searle, it is, as I say, in relation to these that he advances his thesis of causal reduction. According to it, the causal powers of a high-level entity can be explained completely in terms of the causal powers of its components: This is a relation between any two types of things that can have causal powers, where the existence and a fortiori the causal powers of the reduced entity are shown to be entirely explainable in terms of the causal powers of the reducing phenomena. (Searle, 1992, p. 114) A first feature to note here is that Searle is in fact advancing an epistemological notion of causal reduction; the latter is couched in explanatory terms. In consequence, it may be suggested that Searle is merely observing (correctly) that a diachronic explanatory account of all higher-level entities can be provided. But in suggesting that the existence and causal powers of the emergent entity are ‘entirely explainable’ in terms of the causal powers of the ‘reducing’ phenomena, Searle is advancing a more strongly reductionist position than this. If it is generally the case that (as with the house) the organising structure of components makes a causal contribution to the powers of the whole (and I shall suggest that this is so), then Searle’s notion of causal reduction seems to require that the organisational structure also be explained (produced) solely by the causal interactions of the lower-level components. Only where this is so can it be held that Searle’s notion of causal reduction is at least feasible. It may be the case that, seemingly like many other contributors, Searle is inadvertently neglecting the causal impact of structure rather than arguing that it is produced (and so explained) by the interactions of lower-level causes. For even if, or where, the causal interactions of components do (could) produce an emergent structure along with any emergent whole or entity, the latter whole will (would) remain ontologically irreducible to its components just because, or where, the structure or arrangement is essential for it; the latter relational organisation cannot be said to be the same sort of thing as, or composed of, these elements. So it seems to me that once we take note of organising structure, an ontological reduction is usually proscribed. Yet Searle seems to think instead that it is mostly feasible: Once a property is seen to be emergent, we automatically get a causal reduction, and that leads to an ontological reduction, by redefinition if

202  Emergence, reproduction and transformation necessary. The general trend in ontological reductions that have a scientific basis is toward greater generality, objectivity, and redefinition in terms of underlying causation. (ibid, p. 116). So it may be that Searle is merely overlooking the causal role of organising structure; for any cognisance of the latter seems to block any inference that a causal reduction, even if possible, must lead to an ontological reduction. However that may be, the interesting question to examine nevertheless is whether organising structures can typically be explained by the causal interactions of the elements that become the components of eventual wholes. My evaluation is that this is usually not the situation, especially with regard to phenomena of the social realm, and here I provide some backing for this evaluation. This necessitates a focus on actual processes of emergence; it requires that I turn explicitly to the study of ­morphogenesis, which I now do.

3  Morphogenesis and dynamics of emergence The sorts of processes that stand most chance of supporting the causal reductionist position are those associated with self-organising systems. The idea behind this (not wholly appropriate) label, presumably, is precisely that the systems in question are somehow organised through the interactions of elements that eventually constitute their components. My focus, then, will be on such processes or at least those that appear to be causally necessary or contributory to higher-level emergents. This, in any case, is the most appropriate orientation for social analysis, for, as I argue elsewhere (Lawson, 2012 [Chapter 2 above]), all social phenomena depend on human interaction. But I part company from the causal reductionists in suggesting that even in these cases, interactions of elements that become components are rarely sufficient to produce emergent entities or ‘causally emergent s­ ystem features’. In most cases factors entirely extrinsic to lower-level components and their interactions are necessarily involved, preventing causal reductions of the sort in question. Needless to say, I cannot examine all the conceivable concrete processes of emergence of this (or any other) sort. It seems to me, however, that a key feature of any such process is the form of dynamic or dynamics1 involved. And it turns out that if we focus on the latter, numerous p ­ rocesses (and conceivably all) can be conveniently sorted into one or more of three basic categories or types, according to the nature of dynamics involved. Certainly, there appears to be more regularity at the level of dynamics of processes than of the details of the entities that these processes produce. Equally to the point, an examination of these processes does appear to throw light upon the nature of the relations between higher-level and lower-level causal powers that are of concern. Indeed, they are found to

Processes of emergence  203 be relevant for assessing not only the general relevance of the notion of causal reduction here under examination, but also, as we will see in due course, the coherence of the concept of downward causation. I shall refer to the three forms of dynamics I have in mind as non-recurrent dynamics of emergence; simple recurrent dynamics of emergence; and complex recurrent dynamics of emergence. Processes involving these dynamics can thus be respectively termed first, second and third-order processes of emergence (and their products termed first, second and third-order emergents). These three basic types of dynamics, as I say, seemingly span (i.e., complex combinations of them cover) many, if not all, of those that appear to be systematically at play in the sorts of processes of emergence favoured by those who defend a notion of causal reduction. Contentious though the latter claim may be, I think the greater challenge I immediately face is to indicate that there is actually more than one basic form of dynamics, and so process of interaction, involved. For in much of the literature, the different processes are effectively treated as of one and the same kind. Whilst I do not want to suggest hard and fast separations or divisions, I believe nevertheless that important distinctions are usefully made. Before going further, however, let me quickly add a clarification about the strategy I am adopting here. By claiming to identify three different forms of dynamics involved in the emergence of novel forms, and by suggesting that, or at least examining whether, they are relevant not merely to the non-social realm but also, and especially, to the social domain, I am not at all intending to suggest that social reality can be understood as other than necessarily open, highly contingent and radically contested. It is always the case that human beings are human beings-in-social relations, faced with fundamental uncertainties, and fallible, albeit always also capable of reflexivity, forming plans, developing an array of desires, contesting, challenging and criticising anything, not least forms of organisations that confront or include them, as well as going along with situations they do not want or choose or necessarily even (fully) understand. The dynamics to which I refer can be understood as no more than tendencies often in play. In any case I think it is unhelpful to view all of social reality as bound up with emergence, even where significant transformation is involved2. My focus here is primarily with this social realm. As such, I am ­primarily interested in whether the notion of causal reduction holds in this domain. However, I start with an example from the (non-social) natural realm, just because it does seem to fit with, and so perhaps at least helps illustrate, the notion of causal reduction here in question. 3.1  Non-recurrent dynamics of emergence What then do I mean by non-recurrent dynamics of emergence? The term ‘non-recurrent’ is introduced because, in the versions of dynamics

204  Emergence, reproduction and transformation e­ xamined below, recurrent or cyclical processes are involved. In this first simple case instead, all that is involved are basically processes of mutual cancelling. Let me recall that the great mystery covered by the topic of emergence is how order can come about at all when the forces of nature seem to push towards only disorder. As noted above, the second law of thermodynamics holds that everything tends basically to messiness (or to increased entropy). However, order clearly does emerge and so must do so via, not by somehow overcoming, the second law. The way to make sense of this, it seems to me, certainly in the ­non-social realm, is to view any emergent structure or order as one that contingently or fortuitously remains after other potential structures have been ­absented by the forces in question. A very basic mechanism working to this effect within a given process of interactions of particular elements is one whereby opposite or opposing forces effectively cancel, whilst any that contingently remain are reinforced. If, or where, this happens, it can certainly seem as though any organising structure of interacting elements that remains was brought about by the interaction of those elements alone as part of a constructive process of order creation. In this scenario at least, Searle’s notion of causal reduction, as I say, seems to have validity. It was noted above that when Searle introduces his notion of emergence, he makes reference to examples such as properties of liquidity (of various forms of matter). So let me follow suit and consider one such property. Specifically, let me briefly consider the case of surface tension. 3.2  Surface tension Surface tension is a property of the surface of a liquid matter whereby the latter gives resistance to an external object. It arises because similar molecules in a liquid are reasonably cohesive (albeit, of course, having more freedom of movement than when the matter is in a solid state). Specifically, similar molecules have the property of sticking together, of being mutually attractive. The reason for this is that the shape and structure of molecules are such that when two or more get close to each other, this affects the distribution of orbiting electrons in a manner that creates electronic attraction. And surface tension is one of the many properties caused by cohesion of similar molecules, resulting from a cancelling of equal and opposite forces. The process whereby this happens can be described in different ways. Where a molecule is surrounded on all sides by other molecules, it is pulled equally in every direction, so that the resultant or net force on it is zero. However, any molecule at the surface does not have molecules on all sides and is pulled away from the surface direction. This results in internal pressure whereby the liquid surface area is minimised through contraction.

Processes of emergence  205 Alternatively put, a molecule in contact with another is in a lower state of energy than one that is not. The molecules away from the surface are surrounded by others and so have lower energy states than those at the surface. For the energy state of the liquid to be minimised (under the second law of thermodynamics), the number of higher energy surface molecules must be at its lowest. A minimisation of the number of surface or boundary molecules results in a minimised surface area. It follows that each part of the surface of a liquid will take the smoothest shape it can. Where any disturbance serves to roughen the surface shape, the result is a greater surface area and so higher energy; so the surface will push back against any such disturbance. This indeed clearly affects the shape of liquid droplets. Indeed, in the absence of other forces, including gravity, the emergent surface tension would ensure that drops of virtually all liquids would be perfectly spherical. In this example, then, there is reason to suggest that both the emergent property of surface tension and the emergent structure of the drop of liquid upon which the former depends result from the interaction of the component molecules alone. Here Searle’s notion of causal reduction seems relevant. Notice that the internal organising structure of the molecules emerges at the same time as do liquid properties such as surface tension. This simultaneous emergence of structure and totality, we have seen, characterised the construction of the house and is in evidence in all other examples considered below. It is a feature that will become relevant in due course in the discussion of downward causation. But for now, I am focusing on the fact that in this example there is a sense in which the higher-level properties are explicable solely in terms of the interactions of the eventual components. Perhaps some will consider such an example as not a form of emergence at all, just because statistical dynamics and quantum theory can explain how interactions of molecules produce liquid properties under appropriate conditions. Even so, it is not individuals or lower-level components per se but the interaction relationships between them that, with an increase in scale, become amplified and aggregated to result in liquid or other system properties. This is why surface tension and other properties of liquidity are found across a wide variety of suitably combined molecular species. And as I say, it is examples such as this that are drawn upon in accounts of causal reduction, or at least the more plausible interpretation. 3.3  Crowd formation If causal reduction as formulated by Searle can be said to have some relevance to non-social phenomena such as properties of liquids, I am not convinced it holds very much at all in the social realm.

206  Emergence, reproduction and transformation This is not, however, because I suppose social processes involving forms of cancelling do not exist. Indeed, a thesis I would advance for the social realm is precisely that underpinning much collective human endeavour or group interaction is a tendency towards situations of reduced mutual incompatibility of individual interactions, driven by a process of resolving or cancelling conflicting actions or action possibilities3. A simple example is that of crowd formation where the component individuals share a common or related goal. Even here, though, despite processes of cancelling being involved, I think it is not the case that the resultant formation depends solely on the interactions of component individuals. Consider, as an illustration, a situation where very many mostly unconnected or uncorrelated individuals set off to watch a sports event or rock concert at a large arena, say at Wembley Stadium in the UK. As the individuals converge on one or more main roads leading to the stadium, the various individual paths of dancing and dawdling from one side of the road to the other etc. become effectively cancelled, leaving paths of least mutual incompatibility, as non-cancelling practices of walking directly towards the stadium come to dominate. Here, as in the case of liquid properties, it is clear that a form of order emerges just because or where a structure or arrangement can withstand (or can best withstand) processes to disorder or destruction. The emergent relational structure is the result of processes of absenting (of alternative potential structures). In all cases the same basic dynamics of emergence are involved. Once more the emergent totality has powers of efficient causation. ­Traffic is held up as, unusually, walking on roads takes precedence over driving. And people in the roads ahead of the crowd hurriedly get out of the way. Moreover, individuals in these crowds often report shared experiences of increased security and even oneness with others. These are not reducible to aspects or powers of any component individual. There are pre-conditions of organisation, of course. All individuals want to go to the same place − the stadium; the road is of a restricted/ finite width, with the two sides providing a symmetric set of constraints; individuals typically prefer not to offend others and so forth. With an eye once more to the discussion that follows re downward causation, let me also note that, as in the case of liquid properties such as surface tension, the relational organisation that survives the process of cancelling is just as emergent as the totality that is the crowd, and once more it comes into being along with the emergent totality and its powers of efficient causation. Without the simultaneously emergent relational ­organisation, there is no emergent totality. Human beings, though, are not molecules. In addition to being reflexive and relatively autonomous, they are always culturally situated, and act in accordance with (including reacting to, or contesting) pre-existing

Processes of emergence  207 community conventions, rights and obligations, and so forth. Certainly, the shape and nature of the formation that comes about, the rights and obligations that bind individuals in a particular crowd formation, will vary according to whether the individuals involved are, say, walking to a concert in the UK, undertaking a pilgrimage to Mecca4, advancing as an army in a foreign land, representing their countries in an Olympic parade, marching and playing as a brass band, demonstrating against some political decision or situation and so on. Each crowd will experience the development of obligations specific to it. With any crowd, a somewhat novel organising relational structure emerges (and is continually reproduced and/or transformed). Individuals are obliged to walk in a given direction, to seek to avoid colliding with others, and so move at an emergent speed. Also rights of interaction can emerge that, in different contexts, are not typically readily open to relative strangers, taking the form, perhaps, of modes of communication (general conversation and joke telling) and/or general interaction (harmonious singing and chanting). But always the organisational structure that emerges will be formed out of pre-existing context-specific collective practices, including the rights and obligations they carry. If people stand or walk closer to others than they would in a near-empty street, the distances between bodies that are deemed acceptable will depend on local or dominant cultural norms and other context-specific factors, and so forth. In other words, the emerging organisational structure, and so totality and its powers, are rarely if ever created (completely) anew, but rather are formed out of pre-existing aspects of social structure, even though they usually undergo elaboration in the process (e.g., new positions and connections involving novel rights and duties). This structure is extrinsic to the human individuals whose interactions are organised by it; it is not reducible to, and is not entirely explicable in terms of, though it depends upon, the (organised) interactions of its current human components. Thus, causal reduction in the sense of Searle is not applicable here. Notice, parenthetically, that although the cancelling interactions are clearest in large group events such as these, group interactive emergence also characterises many forms of smaller-scale collective practices, including queuing (whether to enter a stadium, to pay for goods in a store or whatever), participating in seminars through emergent conventions such as raising hands and turn taking, clapping at the end of concerts and so forth. In all such cases, one can imagine many different ways that any individual involved, if alone, could fulfil an aim (get to the stadium, make a purchase, pose a question or show appreciation to a performer). But in a crowd, these would be ineffective, even if possible. Of course, alternatives are often imaginable. But these will typically require a lot of individual effort (making a scene in the seminar to gain attention; being parachuted into the stadium). Those practices that do emerge are forms that in a sense

208  Emergence, reproduction and transformation minimise the amount of energy used up in achieving the goals of each individual. Any resulting form of emergent order is one that remains possible after many other more individual forms of action have been cancelled. Notice that not every situation in which a shared objective is pursued by a collection of people has, as an emergent outcome, an orderly, or organised, form of behaviour. People in the UK may queue in an orderly fashion for the post-Christmas sales. But with the expectation of a very limited quantity of any desired good on sale, once the doors are open there can be an almighty scramble, with damage occurring on the way. Things are even worse, of course, when individuals are rushing to exit a site because of a fire or a bomb etc. Individuals can get trampled and seriously injured, if not killed, which is not the intention of others in the crowd. I mention this just to indicate that an orderly outcome may not be feasible; the processes that generate disorder do not always, or even typically, result in order as their outcome. Order is always an accomplishment. However, the central point here, if to repeat, is that specific social structures out of which the emergent relational organisation of a crowd is formed, where an orderly formation is indeed the outcome, are not created by the component individuals and their interactions, but in significant part pre-exist such interactions, even if through the latter they are in degree transformed as well as reproduced. Causal reduction does not hold, certainly as a generalisation, and does not apply even in this simplest of examples of first-order non-recurrent dynamics, in the social realm. 3.4  Simple recurrent dynamics of emergence Just as relevant to the issues before us, there are more complex forms of dynamics of emergence in evidence. And here I think the concept of causal reduction is seen to have less relevance still. The second form of dynamics of emergence I want to examine characterises processes in which particular features or biases do not cancel (with other factors), but are amplified and/or propagated throughout the system. Very often these non-cancelling features or biases are extrinsic to both the lower-level components and their interactions. Clearly, if any features are to be amplified or propagated (rather than cancelled against others), they need to be repeatedly entered into the component interactions. So the form of process of emergence in question involves a cyclical dynamic, comprising an iteration of component interactions. So my focus now is upon such cyclical or iterative processes. A quick, but insightful, illustration of simple iterative dynamics of emergence of the sort I have in mind in the social domain is provided by Margaret Archer’s (1982) use of ‘Castro’s example’. Let me briefly elaborate. Following the Cuban revolution, Castro was faced with a highly illiterate community. Interactions between its members occurred in many ways at many levels, all of which contributed to, amongst other things, the

Processes of emergence  209 general standard and process of development of literacy in the population. It is easy to imagine how, if such a system were left unregulated, the literate would mix with each other and educate their own children, and the illiterate would remain illiterate. However, after the revolution, Castro introduced a systematic external bias into the process of educational development that had an iterative or cyclical dynamic built into it. A constraint was imposed on all such interactions taking the form of ‘each one teach one’. This meant that each literate person had the obligation to render an illiterate person literate; and, moreover, that when this was done these same teachers, along now with their newly literate former students, would set about rendering another cohort literate. This clearly imparted a cumulative tendency into the development process, a tendency in fact to double the literate population after each period of literacy education. If x% are literate at the start and it takes roughly T years for a literate person to help a previously illiterate one to literacy, then assuming no countervailing influences, after T years the literacy rate will be 2x%, after 2T years it will be 4x%, after NT years it will be 2Nx% and so on, until 100% literacy is obtained. Of course, in any such scenario there are bound to be countervailing factors, learning rates will not be uniform and 100% literacy is never achieved anywhere. The process takes time and depends on various parameters, including the original degree of illiteracy etc. But the cyclical dynamic serving to propagate an extrinsic bias or ruling are clear. The example illustrates a cyclical process whereby, starting with a highly illiterate community, a significantly transformed one with a high degree of literacy can (and did) emerge. The outcome is indeed an emergent form of system or community with its equally emergent causal powers. Indeed, the emergent literate community now supported perhaps ‘a national post service, mail order businesses, bureaucratisation and less obvious but more significant developments like international communication with its ramifications for religion, technology, political ideology, etc’ (Archer, 1982, p. 470). Just as clearly, relational structure (formed in part out of pre-existing structure) emerges along with any emergent totality. In Cuba, the emergent structure of rights and obligations (where on occasions the fulfilment of a right [to be educated] is transformed into an obligation [to teach ­others]) coincide with the ever-developing/emerging shape of the community as a whole. Needless to say, there are always pre-existing relations between individuals in any culture. The dynamics set in train would not have ­bypassed, but drawn upon and worked through, the pre-existing relational structure, as well as through any resulting transformations in the latter. In this novel scenario, presumably bringing together people of different classes and social statuses, the result would have been the continuous transformation of

210  Emergence, reproduction and transformation norms and conventions of interaction, of negotiation and renegotiations of rights and obligations, and so forth, as the organisational structure binding a significantly transformed Cuban community came into being. Essential here, then, is a process that circulates (or spirals) within a system, with initial (lower-level) dynamics reoriented by constraint emanating externally to the preceding interactive educational practices (though not, of course, one that was external to all Cuban society5). The effects of the constraint are continually fed back into the lower-level interactions, producing a transformation or deviation in the pattern of these interactions that is thereafter reproduced or propagated throughout the system. Where influences of this sort become persistent, the effects of biases can dominate the distributive tendencies characteristic of non-recurrent dynamics of emergence considered above, and give rise instead to a simple recurrent dynamic of emergence. For such a dynamic to be underway, it does not matter whether the biases are intrinsic or extrinsic to the system. But they can be, and seemingly are usually, extrinsic. And the fact that they even can be is a further reason to reject the idea that the conception of causal reduction under consideration could have significant application, at least in the social realm. As I say, my concern here is the social realm. But in case it should be concluded from the foregoing that the thesis of causal reduction at least applies generally to the non-social realm, let me briefly indicate that this too is not so; that processes of emergence turning on the sort of external bias or input noted above that is propagated via a cyclical process are not restricted to the social realm. A brief consideration of the much-discussed6 example of a snowflake should be sufficient to convince on this point. Although micro-forces at the level of water molecules will be at work whatever formation emerges, the eventual shape of any snowflake will depend on the range of external factors bearing on it, from the dust particle that originally seeds it as a water crystal through to its collisions with other crystals as it falls to the ground, the temperature variations experienced on the way, the vapour supply and so on7. In other words, the manner in which the ice crystals combine or become organised will depend on contingent factors that amount to the snowflake’s history. This is so at every stage of a snowflake’s trajectory. But just as significantly, early developments of structure cumulatively restrict later ones. Early aspects of crystal growth facilitate and constrain later developments. The emergent momentary organisation of any falling snowflake feeds back into the lower-level dynamics, inhibiting most once feasible molecular accumulations and points of expansion at it biases the flake towards specific still feasible paths of expansion. Mutually enhancing biases of molecular configurations and dynamics and the contingencies of the crystal’s historical path co-determine the final outcome. In short, we have a recurrent process of interactions wherein the impacts of contingent external events lead to biases of structure or arrangement

Processes of emergence  211 that not only emerge with, and influence, the overall shape at each point, but also constrain the manner on which new accretions or aggregations can occur. Causal reduction is not easily supportable here either. 3.5  Complex recurrent dynamics of emergence I have, I believe, covered enough ground to establish the case that the conception of causal reduction under consideration does not hold universally or perhaps even especially widely. But in case doubt remains, let me force home the point by considering yet more complex forms of dynamics of emergence where lower-level interactions remain a necessary condition. The third type of dynamics of emergence I now want to consider takes the form of first and/or second-order dynamics of emergence coming to interact with each other, in a manner that sustains or facilitates the development of the interacting lower-order components as parts of an organised multi-part emergent totality. Effectively, the process I have in mind is one of ‘natural selection’, wherein selection is made from the set of possible relations (of reciprocity) between different emergents; and in the first instance between those that have resulted from first and/or second-order processes of emergence. Any relation that remains, or is seemingly ‘selected’, where one does indeed survive, is simply one found to be less susceptible than others to certain prevailing pressures to go under − that is, whose relata are least (or anyway not destructively) incompatible. Any such emergent totality is composed out of lower-order emergent forms along with the constraining relations of their mutual dependence. Needless to say, in social examples of third-order emergence, pressures that affect survival include the power-play of groups and/or situated individuals with different material interests, each continually seeking to get the upper hand, underpinning tendencies that may stabilise or destabilise any system that contains them and so on. In all cases of third-order processes, the reproduction of higher-level emergents depends on the simultaneous reproduction of first and ­second-order emergents, just as the reproduction of higher-level emergents can lead to lower-level emergents being sustained. Examples of this more complex or higher-order emergence are all forms of communities, whether human based or plant and/or animal ecosystems. The sort of dynamics of a process of emergence I have in mind is perhaps usefully illustrated with a narrative provided by Magoroh Maruyama (2003): Consider the development of a city on an arable plain which initially was unpopulated or very thinly populated, where a wave of new settlers arrive. At the beginning, the large plain is entirely homogeneous as to its potentiality for agriculture. Perhaps a group of migrants was passing through it with wagons pulled by horses. A horse dies or a

212  Emergence, reproduction and transformation wheel breaks. The man who cannot go further stops there and begins to farm. This is the initial kick of subsequent causal loop processes. Since there is a farm already, others are attracted to this location and join the first man. One of them opens a tool shop. Then this shop becomes the gathering and socializing place for the farmers. A food stand is established next to the tool shop. Gradually a village grows. Increased agricultural activities necessitate development of industry in the village. The workers in the industry become consumers of the farm products, and the village grows into a town and eventually becomes a city. (Maruyama, 2003, p. 601) Although Maruyama’s accompanying discussion is easily read as suggesting an analysis of the (repeated) occurrence of a single dynamics of emergence, the developments described in this passage involve a complex combination of two, if not three different types of process. At first sight, it appears that the process Maruyama describes kicks off with a dying horse or a broken wheel. But for this event to be significant, the migrants involved must have arrived in the location in question, and for sets of further migrants to be affected thereafter, they eventually have to pass by that way too. In other words, a feature implicit in the passage from Maruyama is a formation that allowed the migrants to appear on the plain in the first place, and one that is repeated if iterative interactions of an appropriate kind are to occur. This is a wagon train8. And unless wagon trains repeatedly follow the trails of previous ones (presumably in such cases using professional guides who have made the journey before), emergence of the sort described does not occur; in order that new migrants are ‘attracted to this location and join the first man’, and indeed presumably even for the first migrant to respond to the accident by settling and starting a farm, the latter must be located on a well-trodden route. So there is a causal loop or repeated process in play. And a biased feature sets in: the originally homogeneous plain now has a contingently situated farmer. A result is that as others pass through, some who have presumably had enough travelling and are continuing just because there is little in the way of a desirable alternative option available, now recognise that one such is open to them after all and decide to stop off and set up close by. Migrants would presumably stay close by for the safety in numbers that is involved or in recognition that the first farmer is successful etc. Notice that any such decision will depend on much reflection and ­possibly re-evaluation of plans. Also, setting up in proximity to the other indicates something about social relations etc. In other words, the fact of cyclical dynamics does not imply a mechanistic process. If patterns of dynamics are common to different social situations, they nevertheless are coloured by and work through exiting social relations and collective practices.

Processes of emergence  213 However, a point to note here is that in the example described, an additional complex recurrent dynamics of emergence also sets in. The community starts to differentiate as one person ‘opens a tool shop’. This mutual dependency of tool shop and farms on each other is an example of ­third-order emergence. It represents an emergent totality that is due to not just one interactive recursive system, but two. And it is a form of dynamics that underpins a tendency towards heterogeneity. Notice that the relations connecting any two forms of emergents are clearly extrinsic to both the components of those emergents and their interactions; rather, they are ‘selected’ because of purposes served, or at least according to features found to be beneficial, at the level of the totality. Indeed, instead of micro-level efficient causation determining outcomes, it may even seem as if there is a form of final causation involved, in the sense that a set of emergent high-level potentials for serving ­pre-existing needs or wants is selectively met. The potential for a (viable) tool shop, always desirable to individual farmers, emerges with the growth of farms. The same applies to the food store when that ­eventually appears in the narrative as well. In such cases there is a sense that, whatever the level of organisation, there is a related fundamental set of absences or needs-waiting-to-be-met or system incompleteness, along with some human experimentation underpinning a tendency to meet these absences, to reach pre-existing target forms of order, that complex recurrent processes of dynamics achieve. However we view this, the driving factors here are extrinsic to lower-level components and their interactions, so that once more we can see that a causal reduction will not typically be the case. After the emergence of the tool shop, we also find combinations of the different dynamics of emergence in play. The tool shop in itself introduces a new bias in the interaction patterns of the farmers, underpinning a new second-order process of emergence as ‘this shop becomes the gathering and socializing place for the farmers’. This, as was just noted, supports an additional third-order process as a ‘food stand is established next to the tool shop’; and so on. Through a repeated complex combination of these three forms or orders of processes of emergence, turning on three forms of interactive dynamics of emergence, we learn that eventually a village grows; and further in time, through more combinations of the noted dynamics, that ‘the village grows into a town and eventually becomes a city’; and so the process continues. In all such cases it is clear that iterative interactions are involved. And because potential relations are in effect the phenomena that are selected over, it is even more apparent than in earlier examples that relations of organisation emerge along with any emergent totality. The central conclusion to be emphasised or reiterated at this point, though, is that with features extrinsic to and not produced solely by the interactions of the

214  Emergence, reproduction and transformation lower-level components, causal reduction, as a generalisation certainly, does not seem to be sustainable. So to sum up on the topic of causal reduction, a sketch of various forms of dynamic processes of emergence gives reason to conclude that it is not a conception with general validity. For a start, a synchronic (point in time) causal reduction is seemingly never relevant just because any emergent system-level powers of efficient causation always depend upon the relational organisation of the components that emerges simultaneously. But nor is a diachronic causal reduction of the sort that Searle appears to ­favour generally feasible, for extrinsic factors are very often, and seemingly usually, a condition of any emergence. One most promising scenario for causal reduction of the diachronic sort in question is that of ­non-social first-order dynamics of emergence, as illustrated by the emergence of various properties of liquid (states of certain materials) such as surface ­tension. But it is not clear that this form of reduction has relevance to the social realm at all. When considering even the simple example of crowd formation, culturally pre-existent norms and conventions including rights and obligations bear on the sort of entity that can emerge. And in situations of recurrent dynamics, external biases can matter and play a compositional role. Alternatively put, emergent systems are organisations of typically pre-existing systems, and these depend on the relational organisation of the (possibly modified) pre-existing system as components. Because the latter – the organising relations – are always extrinsic to the components organised, synchronic versions of causal reduction are false. And because the organisational relations are not generally explicable solely in terms of the interactions of the eventual (and possibly modified) components, as a generalisation, any diachronic version of causal reduction is false as well.

4  Downward causation I turn now to examine briefly whether this heuristic overview of forms of dynamics of process of emergence also bears at all on the relevance of conceptions of downward causation. The version I want to contest understands ‘downward causation [….][as] the concept that a system as a whole has a causal influence on its constitutive parts’ (Hulswit, 2006, p. 261), that ‘higher level entities causally affect their lower-level constituents’ (ibid9, p. 263). Such a conception, as already noted, is also sometimes referred to as top-down causation, and those who accept it emphasise that ‘top-down causation occurs only when an entity has a causal impact on its own parts’ (Elder-Vass, 2012, p. 85). Although the conception of downward or top-down causation seems to be widely taken for granted, there is also a small critical literature that seemingly shares my own unease with the concept, even if this literature does not actually appear to take us very far. However, it does

Processes of emergence  215 provide a helpful starting point. Especially useful is Hulswit’s (2006) contribution, in that its purpose is ‘to lay bare [though not resolve] the major problems underlying the concept of downward causation’ ­(Hulswit, 2006, p. 261). It is also convenient that Hulswit first explores the notion of downward causation by way of analysing the dynamics of (football) crowd formation in similar terms to the way I have described them above. From his analysis, Hulswit concludes that ‘the crowd does something to the people ­involved, it makes them behave in different ways, it governs their behaviour’ (p. 264). And this example, according to Hulswit, exemplifies the paradox that underpins all of the confusion associated with the notion of downward causation (as well as apparently additional confusion ­surrounding concepts of self-organisation and emergence): All the problems involved in the three crucial concepts mentioned, self-organization, emergence, and downward causation, are related to the same basic paradox that all phenomena characterized by ­\ self-organization, emergence and downward causation seem to violate the principle of irreversibility that is considered to be inherent to the principle of causation. By saying that B is the cause of A, we mean among other things that B explains or conditions or causes A and that A does not explain or condition or cause B. [….] But when we say that the crowd causes individuals to behave in certain ways, we do say that (a) the behavior of the individuals in some way causes the behavior of the crowd and (b) the crowd in some ways causes the behavior of the individuals. Any theory of downward causation must come to grips with this paradox. (p. 265) Hulswit consequently insists that this cannot be done without addressing the following two questions: 1. Given that ‘to cause’ appears always to involve something that causes and something that is caused, what sorts of thing are said to be, respectively, causing and caused within the context of downward causation? And 2. What is the meaning of ‘causing’ in downward causation? (p. 265) Hulswit explores various attempts to resolve the paradox identified, but basically concludes that all fail, leaving a confused literature in which ‘the concept of “downward causation” is muddled with regard to the meaning of causation and fuzzy with regard to what it is that respectively causes and is caused in downward causation’ (p. 284). My goal is to seek and resolve some of this confusion, making use of the insights drawn from the heuristic morphogenetic sketches and analyses set out above.

216  Emergence, reproduction and transformation When addressing the conception of causal reduction above, my focus was on emergent organisational structure and my concern was to indicate that, for the social realm especially, this structure could not be explained solely in terms of (as a creation of) the component interactions it serves to organise. Here I want to draw attention to a slightly different feature or insight from the foregoing overview of processes of morphogenesis. As above, I want to stress that there is always a distinction to be drawn between any emergent system or totality and the organising relational structure of the system’s components; the latter is a property of the former, but the two are not identical. But here I want especially to emphasise that in all cases examined, the totality and the organising structure emerge simultaneously. If we take this insight seriously, it follows that if, as is usually the case, the terms ‘top’ and ‘downward’ in top-down and downward causation are relativised diachronically to moments of emergence (rather than, say, synchronically to wholes and their parts), there are in fact two (not one) forms of higher-level emergents. By this criterion, not just the emergent entity as a whole, but also its relational organising structure, lie at the top or higher-level. For, to repeat, in all cases examined an emergent totality and its structure emerge simultaneously. However, if instead the higher/lower relation is interpreted as a synchronic or compositional one, indicating that an emergent entity as a whole is designated higher level and that anything on which it depends (or out of which it is formed) is regarded as lower level, then by this criterion the organising relational structure seemingly lies at the lower level. I believe it is this confusion, and specifically a failure to recognise that on the diachronic criterion of levels an emergent totality and its organising structure both lie at the higher (or same) level, that underpins problems or paradoxes surrounding uses of the conception of downward causation. For if top-down or downward causation is used to express the idea that an entity or whole (synchronically) causally impacts upon its parts (as ­appears to be the case in the examples noted above), the notion is clearly untenable/incoherent. A whole cannot so act; for the former is composed out of the latter. However, at any point in time, the organising relations of the whole can and do make a difference to how the components interact. This, as noted earlier, is a form of formal causation. And, by the diachronic criterion for distinguishing levels, the impact of the relational organising structure on the components is indeed a form of downward causation ­(albeit a form of formal causation). I am suggesting that it is the failure to distinguish, analytically, the emergent entity and its emergent structure, allowing an unrecognised analytical slippage between the two notions of downward causation, that explains the paradoxes and confusions that abound. Consider the example of crowd formation that Hulswit uses to ­i llustrate the central paradox. The paradox is that, at a given moment,

Processes of emergence  217 causation should go in one direction only, and yet, Hulswit informs us, ‘the behavior of the individuals in some way causes the behavior of the crowd and the crowd in some ways causes the behaviour of the individuals’. But neither the behaviour of the crowd causes the behaviour of the individuals nor vice versa. The crowd and its behaviour certainly emerge through individuals (and perhaps small local groups) interacting in an organised fashion in a given context. But at a given point in time, the latter collectively (along with the relevant organising structures) constitute the former; they do not cause it. Of primary interest here, however, downward causation in the sense of the whole causally impacting on its parts does not hold either. The individuals in their interactions draw not on the crowd behaviour as a totality, but on the relational structures that organise individuals as components of the crowd. And it is through these same interactions of relationally organised individuals that the relational structures are in turn reproduced and/or transformed. In short, causal interaction is between individuals and organising structure. And all such interaction is sequential, as we have seen in all the examples examined. Thus, when an individual comes to act, the organisational structure (in the form it currently takes) is given to the individual and, through the sum total of the actions of that individual and all others momentarily acting on that structure, the structure is reproduced and/or (in part) transformed. This happens repeatedly over time. Perhaps the latter part of the argument is easier to see in the case of, say, language as spoken in a community such as the UK. The totality of speech acts does not causally determine an individual speech act or vice versa. Rather, the structure of language is given to each individual and through the sum total of individual speech acts at any given point in time the structure of language is reproduced and/or transformed. At one point, Hulswit writes: Once the crowd is in place and the [football] match begins, the ‘law’ of the crowd becomes even more imperative. Some people behave in ways that would be entirely foreign to them if they were all by themselves. In short, the behavior of individual people seems to be governed by the behavior of the crowd that is constituted by those people. [….] the crowd does something to the people involved, it makes them behave in different ways, it governs their behaviour. (ibid, p. 264) It is certainly the case that very often ‘people behave in ways that would be entirely foreign to them if they were all by themselves’. But so, too, individuals behave in ways that are rather different when participating (within a crowd) at, say, a performance of a violin concerto or a funeral service, or in an airport or on a beach. In each case the individuals are faced with specific sets of collective practices or conventions, rights and

218  Emergence, reproduction and transformation obligations etc., and act on the basis of these, thereby contributing along with everyone else in the relevant vicinity as an element in a relevant totality. Even an individual alone acts differently when situated as a motorist on a motorway, when preparing a meal or whatever. Individuals causally interact with each other and the organisational social structure, but not (synchronically) with the behaviour of some totality of which they are a part; and nor does the latter (synchronically) causally impact upon its own parts. Rather, the totality is the sum total of its constituent components and the organising relational structure, and causally acts through (not on) its components. From this perspective, as far as I can see, all paradoxes and confusions disappear. Hulswit’s two specific questions about the nature of causation in downward causation can thus be answered as follows. It is 1) the organising structure that does any downward causing (should we persist with this terminology), as it bears causally on the (human individual) components of the relevant community or system. But 2) the form of causation is not efficient, but formal causation. In the social realm, specifically, the organisational structure takes the form of community-accepted collective practices with their (often implicit) sets of rights and obligations, and so forth (see Lawson, 2012 [Chapter 2 above]). Any causal bearing that even the organisational structure has on human practices is causation in the sense not of ‘bringing about’ individual practices such as, say, speech acts, but of shaping them through serving as conditions of their possibility. For, of course, organisational structures are not somehow able to bear down on the individual in some external unmediated fashion. It is human beings who do things, so that everything that happens in the social world does so through human activity10. Contributors who hold instead that downward causation is a relation between events at two different levels of organisation (e.g., see Sperry, 1987; Kim, 1996, 2000; and occasionally even Elder-Vass, 2012) are in effect treating the higher level as restricted to the acting emergent total entity and neglecting the relevant higher-level emergent, which is the shaping or organising relational structure. I hope it is clear that in making the foregoing case, I am not at all suggesting that there are no emergent social systems of collectivities with their own efficient causal powers. Clearly, there are. My argument is rather that these collectivities act only through (but not on) the causal practices of the individuals organised as their components. Trade unions affect the bargaining process through the actions of the individuals organised as their members. Armies fight wars through the actions of their soldiers (and increasingly their technology). Wholes cannot (synchronically) have a causal impact upon (as opposed to through) their parts; organising structures, in contrast, can causally impact upon the component individuals, albeit only by way of providing the conditions or means of forms of individual activity.

Processes of emergence  219 We all draw on community collective practices when going on in daily life; but that is quite different from saying that it is the communities of which we are a part, and of which the collectives practices are properties, that cause us to do what we do. My own suggestion for avoiding the confusions and apparent paradoxes that abound is that we desist altogether with talk of ‘top-down causation’ or ‘downward causation’ − not least because (by the most familiar criterion for designating something as higher) there are two forms of higher-level emergents. Rather, once we recognise that wholes cannot (synchronically) impact upon their own parts, it seems sensible, and certainly potentially less confusing, to talk instead merely in terms of human-individual and social-structure causal interaction.

5  Final comments and conclusion If a social totality exhibits powers of a sort not possessed by any of its components and is typically not explicable solely in terms of the interactions of the latter, I recognise of course that such causal powers nevertheless emerge only through the relational organisation (involving, in the social domain, an empowerment) of its components, and are exercised, as mechanisms or processes, only through the interactions of its relationally organised (human) individual components. An Olympic Games, concert, war or industrial strike cannot be staged other than through the activities of various participants. The position I defend is not a version of methodological holism. But equally, if individuals are empowered (and constrained) through being positioned as members or participants in a community, the positional powers are always system properties and individuals remain the agents of these powers only when appropriately positioned and relationally organised as components of the system (see especially Lawson, 2012 [Chapter 2 above]). Thus, when a police officer arrests a suspect or a judge passes sentence, the powers of arrest or sentencing are those of the community, of the wider system, but borne by, or ‘invested in’, or accessed by, those individuals who occupy various relevant positions, and only for as long as they do so occupy such positions. The position I am defending is not a version of methodological individualism. The argument of this chapter is really very simple. Contributors who accept the existence of emergent phenomena tend to view them as complex systems possessing equally emergent causal powers and being composed of other (lower-level) entities with their own causal powers. Debate persists over the relation between the powers of efficient causation of the emergent higher-level entities and those of their causal components. Two theses in particular are continually raised and contested. The first, turning on a conception of causal reduction, holds that in some sense higher-level causal powers can be reduced to the causal powers of the lower-level components, either alone or along with their interactions. The second,

220  Emergence, reproduction and transformation turning on a conception of downward causation, holds that causal actions of ­(lower-level) components are in part caused by the (higher-level) entities or wholes out of which they are formed. I have ventured that the longevity of contestation over the relevance of these notions has rested in part on the fact that analyses of how novel entities actually emerge are rarely made or brought to bear. I have thus examined whether reflection on the nature of morphogenetic processes allows us to draw insights that bear upon the more prominent conceptions of causal reduction and downward causation. I have suggested that indeed this is the case, and that such insights support the view that the former conception lacks general relevance, whilst the latter lacks coherence.

Notes * First published as Tony Lawson (2013), ‘Emergence and Morphogenesis: Causal Reduction and Downward Causation?’, (2013), in M. S. Archer (ed.), Social Morphogenesis, New York: Springer, pp. 85–105. † For helpful comments on the ideas found in this chapter, I am grateful to the participants at the 2011 and 2012 Annual Meetings of the Lausanne Social Ontology Group, especially Margaret Archer, as well as to Stephen Pratten. 1 Terminology seems to vary across users, but I use the term dynamics ­(plural) where a situation or process develops though interacting opposed forces (rather than a single one) and the term dynamic (singular) where there is a ­single force or feature that causes a situation or system to develop. In the social realm, certainly, all developments seemingly involve numerous interacting and often opposing forces (rather than a single one), though there might be occasions where, over a period, one is so dominant that we might usefully talk of its basic dynamic. 2 The last thing I want to promote here is any kind of mechanistic conception. (That said, although there is no a priori reason to suppose that phenomena of social domain need be like those of any other in any particular regard, emergence as characterised above is a category that presumably links all the domains, including the social to the non-social, and so it is at least of interest to determine whether, at an appropriate level of abstraction, the sorts of ­dynamics identified operate more widely.) 3 In other words, it is ways of acting that become eliminated. Thus, I do not mean processes such as two-candidate elections where a vote for one cancels a vote for another. In such cases, the acts of voting either way remain feasible throughout. 4 Apparently, the relevant religious conventions (which must be followed for a pilgrimage to be regarded as valid) disallow any pilgrim in Mecca from ­shaving, clipping nails, wearing perfume, swearing, fighting, hunting, carrying weapons, damaging plants, covering various parts of the body (the head for men, the face and hands for women), marrying, wearing shoes over the ankles and so on. 5 I use the example for illustrative purposes because it is widely discussed in the morphogenesis literature. If a reader is bothered by the thought that in the case of Cuba, the governmental input is not wholly ‘extrinsic’ because the government was introduced by, and continually depends on the actions of, the people, we could instead, just for purposes of illustrating the process, imagine a conquering force of a hitherto ‘isolated’ nation or tribe seeking to introduce a form of literacy on an ‘each one teach one’ basis (or perhaps allowing m ­ ercenaries to covert the conquered to the conquering force’s religion on such a basis).

Processes of emergence  221 6 See, for example, Deacon, 2006. In many ways, in fact, Deacon’s whole ­approach to morphogenetic mechanisms, though geared to biology, seems similar to that presented here. 7 Snowflakes are composed of snow crystals (normally between two and 200) that can take a bewildering variety of geometrical forms, from simple hexagonal prisms to complicated dendritic shapes. These crystals combine or ‘aggregate’ with one another in a multitude of different arrangements, determined in large part by contingent external factors, to form the complex and varied patterns in the snowflakes. Mostly ice crystals form around specks of dust or other external particles which provide surfaces on which water molecules in clouds may condense together to form ice nuclei. Once nucleation has occurred, the snow crystals grow by diffusion of the surrounding water vapour onto the ice surface. Forces on the surface of the crystal govern how the water molecules are incorporated into the ice lattice, and the extent to which the crystallography ­influences the growth appears to vary as a function of temperature and vapour supply in a highly non-trivial way. As the snow crystals grow larger through diffusion, they begin to fall through the cloud. Since there exist crystals with a range of shapes and sizes, some ­sediment at different speeds from others and collisions result. During such collisions the crystals may ‘stick’ to one another, forming aggregates or snowflakes. Snowflakes may also grow through riming, the accretion of ­super-cooled water drops lying in their path. Throughout its development, the structure of an individual crystal will be ­influenced by the hexagonal shape biases characteristic of water molecule symmetry (each water molecule is composed of two hydrogen atoms and one oxygen atom [H2O]. In a solid state, water molecules form weak bonds ­[hydrogen bonds] with each other that pull them into a symmetrical hexagonal [sixfold] lattice shape. For this reason, the number of sides of a snowflake will be six or multiples of six). In each case, too, the structure will be influenced by radial symmetry of heat dissipation or redistribution, which equalises accretion rates at symmetric positions in the growing crystal lattice network. But equally, the structure is influenced by the crystal’s unique path or history of experienced temperature, humidity, pressure, speed and nature of fall. 8 Maruyama doesn’t actually mention a wagon train even here (and neglects to mention how the migrants arrived in earlier versions of this story – see Maruyama, 1963). Nevertheless, this is how in the early US the migrants ­travelled (paralleling the reliance upon camel trains or caravans in the African deserts). Interestingly, though I need not labour it here, its form would have ­ ynamics evolved precisely according to the first order non-recurrent form of d discussed above. 9 Though in giving this definition Hulswit is at this point quoting (approvingly) El-Hani and Pereira, 2000, p. 133. 10 It is through human activities that social structures have a causal influence, whether synchronically or diachronically. If the individual in moving to a ­different socio-cultural context or system wants to function capably within it, he or she must become knowledgeable and skilled in its local structures. Thus, although the latter do not force themselves on the individual, to the extent the individual seeks to become locally competent, her or his practices, and perhaps eventually capacities and dispositions, will be significantly shaped in conformity with the traditions of the new society nonetheless (on all this see Lawson, 1997, 2003 especially Chapter 2, 2012 [Chapter 2 above]; or Archer, 2000, 2007).

222  Emergence, reproduction and transformation

References Archer, M.S. (1982) ‘Morphogenesis versus Structuration: On Combining Structure and Action’. British Journal of Sociology, 33, 455–83. Archer, M.S. (2000) Being Human: The Problem of Agency, Cambridge: Cambridge University Press. Archer, M.S. (2007) Making our Way through the World: Human Reflexivity and Social Mobility, Cambridge: Cambridge University Press. Deacon, T.W. (2006) ‘Emergence: The Hole at the Wheel’s Hub’, in Clayton, P. and Davies, P. (eds.). The Re-Emergence of Emergence: The Emergentist Hypothesis from Science to Religion, Oxford: Oxford University Press, pp. 111–150. Elder-Vass D. (2012) ‘Top-down causation and social structures’, Interface Focus, 2, pp. 82–90. El-Hani, C.N. and Pereira, A.N. (2000) ‘Higher-level Descriptions: Why Should we Preserve them?’ in P.B. Andersen, C. Emmeche, N.O. Finnemann and P.V. ­Christiansen (eds.), Downward Causation: Minds, Bodies and Matter, Aarhus: Aarhus University Press, pp. 118–142. Hulswit, M. (2006) ‘How Causal is Downward Causation?’ Journal for General ­Philosophy of Science 36, 261–287. Kim, J. (1996) Philosophy of Mind, Dimensions of Philosophy Series, Colorado and Oxford: Westview Press. Kim, J. (2000) ‘Making Sense of Downward Causation’, in Andersen, P.B., ­Emmeche, C., Finnemann, N.O. and Christiansen, P.V. (eds.), Downward ­Causation: Minds, Bodies, Matter, Aarhus: Aarhus University Press, pp. 305–321. Lawson, T. (1997) Economics and Reality, London and New York: Routledge. Lawson, T. (2003) Reorienting Economics, London and New York: Routledge. Lawson, T. (2012) ‘Ontology and the Study of Social Reality: Emergence, ­Organisation, Community, Power, Social relations, Corporations, Artefacts and Money’, Cambridge Journal of Economics 36 (2), 345–385. Maruyama, M. (1963) ‘The Second Cybernetics: Deviation-Amplifying Mutual Causal Processes’, American Scientist. 5(2), 16–79. Maruyama, M. (2003) ‘Causal Loops, Interaction and Creativity’, International ­Review of Sociology /Revue Internationale de Sociologie 13(3), 607–628. Searle, J. R. (1992) The Rediscovery of the Mind, Cambridge MA: MIT Press. Sperry, R. W. (1987) ‘Consciousness and Causality’, in Gregory, R.L. (ed.), The ­Oxford Companion to the Mind, Oxford: Oxford University Press.

Part 5

Consequences for projects of human emancipation

8 Possibilities for emancipatory social change

1 Introduction Social reality is constituted by way of processes of social positioning. These are processes whereby people and things are organised as components of emergent totalities, with human individuals positioned specifically as participants of communities. This is the conception defended throughout the book. The purpose of the current chapter is to examine its consequences for projects concerned with making the world a better place. This is clearly a legitimate undertaking, not least because traditional modes of determining courses of practical action have given very little explicit attention to ontological analyses. Yet in order knowledgably to reshape social reality, it is always necessary to have some understanding of the real possibilities for its reconfiguration − possibilities that of course depend on the nature of social material. As always, social ontology is essential. I do recognise, however, that not all who accept the basic socio-­ ontological conception defended will be comfortable with the specific suggestions bearing on practice that follow. For not only is it the case that, as always, the basic socio-ontological conception must be supplemented with substantive or empirical claims before any practical inferences can be made, but, given the topic of the chapter, it is necessary to focus on ontological features of human beings too. Some understanding of the latter is required to ensure that changes pursued are of a sort that can be expected to be beneficial to human beings. So even where there is a shared acceptance of the conception of social ontology defended, differences can arise with other parts of the analysis. I suspect, moreover, that some of the additional assessments I make are somewhat contentious. I do, though, currently hold to all that follows. I start by providing a brief overview of relevant aspects (as I take them to be) of both the human person and the social world, drawing largely on assessments/arguments I have advanced and defended above or, in the former case, elsewhere (most especially, Lawson, 2015b). The conception so sketched will set parameters for making observations on the real possibilities of, and for, emancipatory social change.

226  Implications for practice

2  Human nature First, and perhaps most fundamentally, I am accepting a commitment to conceptions of not only the human being or person,1 but also human nature, including, indeed, states of human wellbeing or flourishing. I hold both that human beings are able to flourish and that some sets of conditions are more conducive to flourishing than others (see Lawson, especially 2015b, but also 2000, 2013, 2017a). Unlike a rock, say, that is likely indifferent to the conditions around it, human persons require more than survival and seek conditions in which they are best able to fulfil themselves qua human beings. The latter involves a recognition of numerous needs and capacities, the meeting or realisation of which is conducive to wellbeing. Each individual person is obviously unique in a multitude of ways, including possessing an exclusive combination of needs. But equally, human persons have various features in common, many bearing upon wellbeing. Thus, in addition to our each possessing numerous widely and frequently commented upon shared basic needs, such as for food and shelter, it is essential to our flourishing as persons that we each are also able competently to interact or engage with the range of forms of social and non-social being. Obvious examples of the former sort are common needs both to actualise capacities of language development and regularly to exercise language competence when acquired. Even in commonality there are always differences, however. For the manner in which all, including any shared, capacities are actualised or developed will vary according to context. They can be conditioned by any of a range of possible factors, including age, culture, sexuality, historical paths of development and experience, generating needs in varying forms. The ethical goal, then, as I have elsewhere argued at length (e.g., Lawson, 2015b), is a world in which we flourish in our differences. Following Aristotle, I refer to such a reality as eudaimonia or the good or eudaimonic society. Practices that take us in the direction of it, as well as the changes so effected, can with reason be labelled emancipatory or morally good2. One specific commonality of all human persons that I argue for (Lawson, 2015b) and emphasise here, it being fundamental to the arguments that follow, is that the flourishing of each of us depends on the flourishing of (ultimately all) others and at some level we recognise this. It is impossible for any of us to flourish fully where others are being harmed, and we know it (see Lawson, 2015b). Thus, even in our everyday interactions, ceteris paribus, we each at some level recognise a need to act in ways that allow, and indeed facilitate, the flourishing of all. Of course, the ceteris are not always paribus. There can be numerous countervailing tendencies in play, often leading us to act against ourselves in significant ways; tendencies grounded in actions based on fear and insecurity usually stemming from ignorance and misunderstanding.

Emancipatory social change  227 Accepting, as I do, the conception of the human being or person set out, there is little place (and certainly no need) for a notion of ‘evil’. Rather, bad doings − those that inhibit the flourishing of others (and so also the flourishing of those doing the deeds) − are basically mistakes, based on a lack of awareness of the real situation, a failure to develop adequate levels of criticality, and so on being blinkered in various ways3; or else reflect a lack of courage or means to resist tendencies that are interpreted as detrimental. Currently, processes that encourage inauthentic actions, those which serve to inhibit our general flourishing, are everywhere all too evident. Even so, such actions are contingent and mostly parasitic on the authentic; the former require the latter, but not vice versa4 (Lawson, 2015b). The most fundamental drive is to be who we really are qua human beings, to flourish as we are, in our differences, recognising at some level that the flourishing of each necessitates the flourishing of all (see Lawson, 2000, 2003, 2013, 2015b, 2017a). Fundamental to it all, I might add, is that we are all most essentially givers. Where we are able, we each give something of ourselves more or less continuously to others5. Exchanging is quite different from giving, being almost antithetical in spirit6, albeit something that − for the time being, anyway − we have all to live with to an extent just to survive, given the prevailing conditions. As a final matter, I might stress that embodied personalities of human individuals, our knowledge, desires, the shape of our needs and priorities etc., are not at all fixed, but rather are processual in nature. Indeed, almost everything so far discussed is constituted within processes of transformation. Not only everything social, but also much that is human is evolving and the future of everything is open.

3  Social structure So much for the basic features of human nature that I will be building on in the following. I turn, then, to make a brief sketch of the conception defended of the nature of the social world wherein we move, and upon which we seek capably to act to achieve something better. At a very general level, the social realm is found to consist of sets of specific structures, within which we all are situated or positioned, which facilitate our individual practices and actions, and which themselves are reproduced and transformed through the sum of human intentional doings so facilitated. Although we all act for reasons − that is, ­intentionally − for the most part the reproduction of these conditioning structures is not one of our objectives, but rather an unintended outcome of our local practices taken in total. Mostly, the whole reproductive/transformation process is unacknowledged. Put slightly differently, we human beings for the most part do not create social reality, but rather, on finding it given to us at any moment, each

228  Implications for practice draw upon it in acting in always situated ways, pursuing our individual concerns. In so doing, we act in conditions clearly not of our choosing, with understandings that, although necessarily adequate to our going on capably in life in our immediate sphere, are always fallible and extremely partial at best. We thereby each contribute, along with the simultaneous actions of all others, to the continuous reproduction and transformation of social reality as a whole, in a manner that is mostly unintended and, if recognised at all, poorly understood (see, e.g., Lawson, 1994, 1997, 2003, 2012 [Chapter 2 above], 2015a). Moving to a slightly more concrete level, in their specifics, and as noted at the outset of this chapter, social phenomena are found to be constituted as, or as features of, social systems or totalities. These emerge and/or are transformed through processes of social positioning, these being developments whereby people and things (broadly conceived) become relationally organised to form components. To recall, social positioning, where a human community is the totality, consists in both the creation of positions, each with associated rights and obligations, and the allocation of one or more individuals or things to each one. The latter allocation process itself involves three elements regarding each occupant. The first is practical placement, arrangement, or other mode of incorporation, as a component of a totality. The second is the allocation (typically) of an agreed status. The third, and most significant, is the effective harnessing of capacities already possessed in ways that, whether intended or not, result in their serving one or more system functions of the totality. Where human beings are so positioned, capacities possessed by the occupants are harnessed by way of the occupants accepting to adhere to rights and obligations associated with the positions occupied. Where an artefact or a natural object is positioned within a community, its use is regulated by rights and obligations that simultaneously accrue to human participants within that community. Each right (obligation) of one position is matched to an obligation (right) associated usually with a different position. Matched pairs of rights and obligations are social relations. They are also power (over) relations. The one that wields a right has power over another with a matched positional obligation. It is via the acceptance of positional rights and obligations that existing capacities of position occupants are harnessed, ensuring that wider system functions are served. They ensure that lecturers lecture and students study etc., so that the university fulfils its educational goals; and so on. It is, then, positions, rights and obligations, and the collective practices associated with them, that together provide the most fundamental form of organising structure of the communities of which they are features. It is these first and foremost, or in the first instance, that are reproduced and/or transformed as we all undertake our daily activities (which they facilitate).

Emancipatory social change  229 That said, social reality does not reduce to positions, rights and obligations; nor are relations of matching rights and obligations the only kind to be found in the social realm; and nor even are they the only ‘power-over’ form. However, from a social ontological perspective, they are found to be the most fundamental form of relation. For they are distinguished in being essential to the constitution of social reality, working at all levels to sustain a degree of continuity, stability and coordination despite social reality being everywhere processual in nature, and only partially and fallibly understood, conforming to the sketch of the preceding paragraphs. It is around these forms of social relation that most other forms coalesce. The foregoing is a brief overview of the conceptions of human nature as well as of social reality that I have elsewhere defended. The overall picture is one wherein human flourishing is seen to depend on the flourishing of all and social reality is characterised by openness, depth, relationality and process at all levels, being a complex set of relational, social totalities in motion. The conception as elaborated, at the level of generality described, can be expected, too, to express the character of the good society or eudaimonia if ever it is achieved. Finally, although social reality is found to be everywhere in process, the conception outlined remains consistent with there being significant relative stability in social life, albeit with the basis for this being found to lie not on the surface at the level of events, but in the structures that underpin them. I have suggested that these, in particular positional rights and obligations, are everywhere fairly simple in their operation when viewed at an appropriate level of abstraction. But the variety of practices and interactions that emerge when complexly structured and motivated human beings draw on them is significant, always open-ended and unfolding. What, then, follows for progressive or emancipatory practice if the account briefly sketched of relevant aspects of human nature and social structure is accepted? What does it allow or disallow as potentially viable ways of proceeding? Of course, successful projects of social change require an understanding of the natures of not only persons and social material, but also the sorts of existing conditions that are problematic for human wellbeing and which we are seeking to overcome. Before addressing this latter matter, however, I proceed by identifying a practice that is regularly, indeed traditionally, promoted and pursued; but which, whatever may be the nature of the problems confronting us, can already be seen to be inappropriate in the light of the ontological assessments set out.

4  T  he irrelevance of economic policy modelling, planning and control Rather significantly, if the foregoing assessment is broadly correct, it follows that projects concerned with social change that rely on mathematical models for predicting, simulating, planning and/or controlling

230  Implications for practice events are largely irrelevant. For the conditions of success for such activities are closed worlds populated by isolated atoms, the latter being factors that manifest the same, separate and independent effects whatever the context; and social reality, according to the conception defended here, is just not like that (also see, e.g., Chapter 1 above, Lawson, 1997, 2003). Rather, social factors including human beings, if to repeat, are (not atomistic but) mostly complexly structured and exist as processes of social transformation; and social agents (do not act in isolation but) are all relationally/positionally constituted (and of course fundamentally other-­oriented). The situation at the level of events that results from interactions of real human beings in the noted conditions is messier and more interesting by far than those required if successes are to be had by the mathematical economic modellers and others who endlessly run simulations and/or spend their time seeking to uncover patterns in those events. The most frequently noted consequence of nevertheless employing methods of mathematical modelling (that are inappropriate for the conditions in which they are applied) is, of course, that forecasts of policy makers and others are almost always found to be notably unreliable/inaccurate7. Just as significantly, however, though perhaps less often noted, is that economic formulations − that is, the theoretical posits and descriptions of the world, accompanying the models are always recognisably wholly unrealistic and lacking explanatory power as well. But further still, just as we cannot predict future events given the nature of social reality, so we cannot control them either, for the same reasons. Indeed, attempts to predict and to control events are intrinsically intertwined. Currently, policy makers estimate models on past data and assume that models so constructed are meaningful representations of not only the past, but also the future. Within each equation are a few ‘variables’ considered to be determined from the outside (not predicable using the remaining model equations). These are called ‘exogenous’ and interpreted as being open to determination by policy makers. Interest rates or tax rates or public spending levels are examples. Thus, policy makers experiment with different values for these ‘exogenous’ variables, recording the ‘predictions’ of the values of certain remaining variables that are produced with each model simulation. By settling on a set of preferred results, and indicating the values for the choice or exogenous variables that are required for the model to generate the supposedly desirable outcomes, the models are interpreted as tools that allow the future to be controllable as well as predictable. It never works out, of course; although this repeated experience of failure appears no more effective than theoretical critical insight in deterring those concerned from repeatedly trying.

Emancipatory social change  231 4.1  Modelling, planning and postcapitalism Although the proponents of the mainstream project of modern economics insist on these modelling activities (the latter insistence indeed being the defining feature of the mainstream), various heterodox economists and others frequently turn to them as well, believing that by making assumptions or/and seeking/drawing conclusions that are considered somehow to be more radical, the models can somehow be rendered relevant. In fact, it is difficult to understate just how widely and uncritically these modelling activities and tools are accepted by the range of modern social theorists, especially where the economic is the focus. They are so enticing, indeed, that even commentators who make a real contribution to understanding submit on occasion. The result is that it is difficult to reorient the debate even where a need to be realistic and radical is seriously embraced as an objective. To underscore this latter assessment, to convey something of the extent and depth of the noted malpractice, let me give a quick illustration by considering very briefly the project of postcapitalism defended by Paul Mason (2015a) in his recent book Postcapitalism: a guide to our future. For Mason’s is a serious, well-researched and impressive study. Mason is a critical thinker, clearly committed to working for a better world in which we all can flourish. Yet even here a modelling emphasis emerges as a central cog of the analysis. Mason’s main concern is with developments he interprets as emerging economic forms, typically organised around digital or information technology, viewed as struggling against capitalist organisation, and as prefiguring indeed a new form of society. Mason interestingly identifies the revolutionary potential of some recent technological developments, and in particular those that render feasible a postcapitalist society more consistent with human flourishing. And although Mason is optimistic that the emancipatory potential of these developments will be everywhere taken up (rather than, say, tailored mostly to the needs of the dominant forces of the system, such as accumulation and warfare8), he accepts the task of giving them a helping hand. In this, however, and despite proceeding somewhat cautiously9, his proposals ultimately rely upon a presumed efficaciousness of models of the sort produced by economists. Thus, we eventually reach a section of his book titled ‘Model first, act later’. This opens as follows: ‘First, we need an open, accurate and comprehensive computer simulation of current reality. The sources could be the models macro-economists use’ (Mason 2015a, p. 271). Mason does acknowledge that ‘most economic modelling under market capitalism is actually close to speculation’. But he finds this situation somewhat ‘startling’10 and lamentable, seemingly failing fully to recognise that such an outcome is inevitable. Rather, he supposes that for purposes of advancing the project of postcapitalism, the noted failures of modern economic

232  Implications for practice modelling can be redressed. And it is essential for his project that this be the case; for central to it is the need to model capitalism correctly, as a basis for modelling the transition beyond it: So, one of the most radical – and necessary – measures we could take is to create a global institute or network for simulating the long-term transition beyond capitalism. It would start by attempting to construct an accurate simulation of economies as they exist today. Its work would be Open Source: anybody could use it, anybody could suggest improvements and the outputs would be available to all. It would most likely have to use a method called ‘agent-based modelling’ – that is, using computers to create millions of virtual workers, households and firms, and letting them interact spontaneously, within realistic boundaries [….] Once we are able to capture economic reality in this manner, then planning major changes in an accountable way becomes possible. (Mason, 2015a, 272) As I say, I refer to Mason here merely for illustrative purposes. The foregoing is all rather out of keeping with most of Mason’s analysis. My concern here, to repeat, is to bring out just how widespread and deeply ingrained is the presumption that where the goal is progressive social change, the appropriate way of proceeding necessarily entails relying on forms of planning, based on prediction and the control of future events. Such a strategy appears to so many to be so obviously the thing to do that its adoption is viewed everywhere as a matter of common sense, even by numerous otherwise critical commentators, and despite the record of persistent failures of those that have so proceeded. If the conception of ontology being defended in the current book explains the history of failure of endeavour concerned with event planning, prediction and control, what follows from it regarding the sorts of strategies for emancipatory change that are feasible? Are there indeed any options that can be supported as viable? I think there are. But they are very different in nature from the prediction and control activities of traditional policy formulations; a major reorientation at the level of formal theorising is required. Specifically, the concern must shift away from event amelioration to socio-structural transformation.

5  Socio-structural transformation Before elaborating on the last remark, let me consider the nature of the problem that warrants emancipatory attention. It is simply that the drive of each of us to flourish is repeatedly thwarted by the structures around us. Relative stability in social life consists not of patterns of events, but social structures − not least sets of positions, rights and obligations. These

Emancipatory social change  233 are the factors we draw upon in our practices, in seeking to survive, produce, create and generally go on in life. And the way these structures have been shaped by historical forces is such that many people throughout the planet continuously suffer conditions of insecurity, oppression, discrimination, bullying, poverty, limited healthcare and education opportunities, and so forth, while all of us to different degrees struggle to avoid being alienated from who we really are. In a world where there are more than adequate resources for all to flourish, the noted conditions are nevertheless maintained through the interactions of us all, in the historically determined situations in which we find ourselves, including hierarchical structures of positions, rights and obligations serving to interrelate both communities and people. The nature of existing structures and the manner in which individuals and communities are distributed to the various positions are currently far from facilitating of human flourishing. The project to consider here as an alternative to event or outcome planning, then, in its basics or fundamentals, is simply that of identifying causal structures that serve as obstacles to achieving conditions of human flourishing and thereupon seeking ways of transforming or replacing them. To pursue it, the primary emphasis and focus of critical attention must turn away from events and their hoped-for and sought-after patterns to underlying deeper structures where, as in the non-social realm, the basis of stability and continuity really lies. It is the underlying social structures, not least positional rights and obligations, that determine the shape and range of real human possibilities. The feasible goal thus becomes that of socio-structural transformation oriented to facilitating ever-­ greater human flourishing. How we all might act within appropriately transformed structures, and the specific events or outcomes that would thereby emerge, are matters that are unpredictable and can only unfold with time. Thus, whereas modellers concerned with forecasting must suppose (however implicitly) that all underlying social or ‘institutional’ structures remain fixed just to provide a semblance of coherence to their extrapolations of event patterns, the central focus instead needs to be on ways of transforming or replacing sets of these structures. The warranted objectives include undermining those structures that, for example, allow/cause any one group (misguidedly) to oppress, take advantage of, or otherwise harm etc. some other group. More generally, the aim becomes that of replacing structures that are oppressive, discriminating and generally inhibiting of flourishing by those that are needed and emancipatory. As I say, how individuals will choose to act once or if oppressive structures are transformed or replaced will always remain open. It is important, of course, to ensure that the ways in which we go about seeking to transform social reality, to remove or otherwise transform/ replace structures that serve as obstacles to flourishing, are determined

234  Implications for practice jointly through informed, shared and democratic processes, and remain consistent with our vision of the good society, with the need for all to flourish. If we are to remain true to ourselves, it is not an option to seek to do harm to, or to disrespect, those who are ideologically blinkered or otherwise conditioned erroneously to resist emancipatory change, just because they are so blinkered. But social transformation remains the primary option. In short, because social reality is an open system comprising sets of interconnected relational totalities in motion, the focus of emancipatory projects must, to be efficacious, shift away from the concern with event amelioration to socio-structural transformation, away from seeking to predict and control events to restructuring the range of outcome possibilities, and away from central determination to processes where we all can contribute to making our history, cooperatively and peaceably, as we go along. Clearly, the task of removing or transforming obstacles to flourishing will often be demanding. Research and significant critical awareness will usually be required to understand the nature of the processes involved. And promoting awareness can be especially difficult where harm and ignorance are ingrained in custom and tradition. A feature of our actual world that bears significantly on possibilities for removing obstacles, albeit one that is often understated, is that very many harmful forces − though always, of course, manifest in specific/local ways in each community − operate across communities, and are often in fact transnational. Indeed, if we question in any sustained and serious way the sorts of obstacles that impact most significantly on our lives, they are seen to include the worldwide forces emanating from oppressive relations such as patriarchy and racism; the supporting structures, networks, financing and consequences of warfare; certain forms of institutionalised religion; processes of environmental degradation and pollution; prejudice and dogma in parts of the international academy; sections of the world’s media in the hands of, and directed by, a powerful few, often concerned explicitly to maintain a widespread level of ignorance of various issues, not least the workings of the economy; and, of course, the operation of the economic system itself, ultimately concerned with facilitating processes of exchange and monetary accumulation or ‘profit’ before all else. This recognition has a bearing on the appropriate level of operation of projects of social change. The latter will always be community oriented, but the level of community at which desired emancipatory change is feasible (local, national, international etc.) clearly depends on the reach and the nature of the obstacles (to generalised flourishing) that require transforming or absenting. Where it is possible to transform obstacles or harmful forces at the level at which they operate, then, a clearly appropriate strategy is to seek to do so. However, as noted, many of the forces in question operate across

Emancipatory social change  235 a spread of communities, including transnationally. Where so, to be effective, emancipatory action appears to require linked, intercommunity, coordinated projects of obstacle transformation or removal. In many cases currently, however, it is far from clear that possibilities for this yet exist. What then is to be done where this is so? Prima facie, at least, three sorts of (overlapping but nevertheless distinguishable) possibilities may appear to arise in such circumstances. These are 1) to seek to transform or absent wider-scale forces in a piecemeal, step-by-step fashion, in stages, community by community; 2) to accept the operation of the harmful forces in question as inevitable and seek to harness them to facilitate a better world; and 3) to construct ‘local’ shelters against these forces, allowing a degree of protection for some, at least for the time being. Let me consider each briefly in turn. 5.1  Obstacle transformation and/or eradication in stages Cases do arise where obstacles to flourishing, though transnational in their reach, can be transformed or otherwise undermined at least in some way at a local community level. As noted, all transnational forces will, like any others, be manifest as local community-relative obstacles, and very often the most obvious or immediate effects at least can be prevented. Of course, much depends on context. Whatever the case, the operative obstacles to flourishing, and so the manner of transforming or removing them, will inevitably be closely bound to the positioning system, for this is how social reality is everywhere constituted. In fact, processes of positioning and their results can manifest obstacles to flourishing in two very clear ways. Constraints on flourishing can persist because: 1) the very nature of specific positions, as manifest in the rights and obligations associated with occupancy, is inherently oppressive and/or discriminatory; and 2) individual participants, identified in some way as being of a kind, perhaps because already an occupant of a specific position, face difficulties, restrictions and discrimination when seeking to obtain entry to additional, relatively advantaged, positions (the associated tasks of which they are quite capable of successfully undertaking). To illustrate both the manner in which obstacles or constraints can be so manifest, and piecemeal ways in which they can sometimes be tackled with a degree of success, consider how gender discrimination is regularly manifest: a form of discrimination that remains all-pervasive, but less oppressive perhaps with time in many communities. Gender, of course, is itself a structure of positions and gendering is always a community-based positioning process (see Lawson, 2007). And in very many communities, rights and obligations associated with, and indeed in part serving to constitute, the gender position of woman, have long served to disadvantage those so positioned. Those allocated, on whatever biological or any other basis, to the position gendered woman are simply

236  Implications for practice allocated rights and obligations that mostly (certainly frequently) serve to disadvantage the position occupants relative to others gender-positioned differently, in ways that have nothing to do with intrinsic or biological capabilities of those so positioned. The very process of gender positioning has itself been discriminatory. Of course, some gender-positional features may be welcome, contingent and/or harmless in themselves. But many, and usually most, are clearly obstacles to flourishing and especially evident when attempts by occupants to transform matters are met with powerful resistance. This is very clear in those cases throughout history where gendered women qua gendered women have been formally (by accepted convention or legally) debarred from entering, or otherwise accessing rights associated with, various additional positions very obviously associated with power (various forms of ‘high office’), or with status (reserved for those with power − most obviously membership of a variety of clubs, Cambridge Colleges) and so on, and so accessing rights restricted to those positions. To illustrate with a currently topical example, it was not so long ago that in the UK, those gendered as women could not access the position of voter; women qua women were barred even from acquiring the right to vote. As I write, indeed, it is about 100 years to the day since a first group of women (along with some previously disenfranchised men) gained access to a position with the right to vote. Specifically, in Great Britain, in February 1918, after 85 years of debate on the topic, the Representation of the People Act was passed, under which some women − namely those over 30 who owned property over a certain value − were granted entry to the position of voter. At the same time, it removed practically all property requirements of positioning for men over 21 and granted positional access to voting rights to all men in the armed forces aged 19 or over. The noted partial removal of obstacles on women’s suffrage was achieved through 15 years of protests, militancy and hunger strikes by the Women’s Social and Political Union and Women’s Freedom League. Of course, at that time, even more than now, the limitations on access to additional positions and associated rights for women as a whole covered very many other areas of social activity in addition to voting. Matters have since improved to an extent in the UK and most locations worldwide; but even so, the task of removing obstacles to additional positions continues. A notable example that prevails worldwide, and so cannot easily be absented on a piecemeal basis, is provided by the Roman Catholic Church, wherein Pope Francis − a somewhat progressive character in many respects − has even now decreed (or endorsed the decree) that the Catholic Church will never allow that women can occupy the position of priest11. Such formal bars on whole groups denying their occupants entry to certain (especially advantageous) positions or otherwise gaining access to rights associated with these positions are obviously serious obstacles to

Emancipatory social change  237 flourishing. But at least as discriminatory are practices that occur where there is no formal bar on any individuals entering various positions as such, but where those marked or positioned in some way find it difficult to gain entry anyway − not in virtue of any intrinsic capabilities or lack thereof, but simply because of their marking/positioning. Clearly, this too has regularly applied to individuals identified as gendered women. Such a situation, of course, reflects prejudice and so errors on the part of those making the positional decisions. A derivative form of this sort of discrimination arises where entry is after all permitted, but according to inappropriate criteria. Indeed, perhaps the most pernicious form happens when the positional right to allocate desired posts to other participants in the community falls upon a single (positioned) individual, and gendered women are admitted, perhaps occasionally even actively sought out (if, say, the opportunities are for selected individuals to play particular gendered women in a play or film), but granted position occupancy not on grounds of fairness or ability to carry out the requirements of, or relevance to, the posts, but according to criteria such as appearance, childlessness, willingness to grant favours etc., amounting in the worst case to sexual harassment and exploitation. Manifestations of forms of oppression of the latter sort are no doubt the most difficult obstacles to overcome; it is easier to campaign against formal rights and obligations per se that are at least out in the open. But even such illegal abuses of power can be overcome with organisation, as currently the ‘#MeToo’ and ‘Time’s Up’ campaigns clearly demonstrate12. The latter are, or at least have become, prominent campaigns, and are widely recognised and successful. My point at the start of this section, to recall, is that cases arise where obstacles to flourishing, though transnational or pan-community in their reach, can be, at least to an extent, successfully transformed or otherwise tackled and undermined at a ‘local’, including national, community level − that is, without having to transform the obstacle everywhere all in one go. This, I am suggesting, is illustrated by the activities of the suffragettes and others concerned with the transformation of community-accepted or formal rights and obligations, as well as those of the sort illustrated by the ‘#MeToo’ and ‘Time’s Up’ campaigns concerned with abuse of formal power. Movements such as these achieve emancipatory successes, when they do, through being projects concerned not with planning future outcomes and events, but with removing or transforming obstacles to flourishing, and through being able to do so, if necessary, on a piecemeal, step-by-step, community-by-community, basis, wherever opportunities arise. It is through continuously seeking so to remove or transform obstacles, wherever feasible, that we all can and do continuously move towards achieving the conditions of the good society in which we all can fully flourish in our differences (see Lawson, 2015b).

238  Implications for practice 5.2  Harnessing the obstructive forces Much of the time, however, the wider forces that obstruct flourishing are not transformable in a piecemeal fashion within local communities; the mechanisms as a whole require undermining, and this, as I say, requires internationally spread transformative action, where conditions for achieving this are not yet in place. The dominant economic processes in the modern world are everywhere like this. They are very clearly not oriented to, and certainly do not prioritise, the meeting of human needs, with producing conditions of care, unconditional giving, creativity and human development. Rather, the concern is almost entirely with power-based trade or exchange and money accumulation for its own sake. Increasingly, indeed, the provision of everything is secondary to, and dependent on, the potential for taking profits. This covers the delivery of healthcare and sports as much as manufactured goods and finance. But it is not possible for any specific community, even at the national level, just to have the process turned off for itself. A common response is to seek instead to make the best of a bad job by attempting to harness the noted forces in ways that are intended to be advantageous. This is the second apparent option noted above and is basically the status quo or traditional approach, even if not so rationalised. At the national level especially, governments engage in transformative action hoping to facilitate better conditions for all without ever addressing the real causes of the hardships13. But attempts to harness the dominant forces exist at all levels of decision taking and community activity. The problem, of course, is that the desire to create conditions of care and wellbeing by harnessing forces that inherently depend on conditions in which some benefit at the expense of others is somewhat contradictory. And this is inevitably the case where economic forces are the focus. As a result, many if not most such attempts to facilitate wellbeing via harnessing these forces, not least economic ones, were always doomed to end in failure, or at best be ineffective. For example, those positioned with power in corporations often declare a desire to operate within the system in a way that avoids or minimises areas of harm. Not infrequently, benevolent employers even declare a desire for members of workforces to receive a significant portion of what they contribute/produce, or to maintain a high level of health and safety measures in the workplace, or to resist installing deskilling technology, or just to provide a workplace that allows people to feel secure and not wholly alienated etc. Over and again, though, it is found that such companies are unable to survive where competitors cut costs by doing the opposite at every opportunity (see Lawson 1997, Chapter 18, 2014). But governments, too − not least those in long-industrialised communities such as the UK − have less economic power in the face of such forces than is often supposed (see Lawson, 2014, 2015c − reproduced as Chapter

Emancipatory social change  239 4 above). Capital is increasingly mobile and can (re)locate relatively easily to parts of the globe where labour and other costs are cheapest and resistance to harmful impacts of the production or work process is relatively low14 (Lawson, 1997, Chapter 18, 2017). Governmental room for manoeuvre is especially limited in communities where centuries of struggle against harmful economic forces have achieved a general standard of living, work protection, healthcare, level of expectations and overall effective opposition to inhuman forces15. As a result, proposals made by political parties promising to solve, or meaningfully to address, a nation’s economic and other significant problems are, especially where seriously also motivated to protect or even advance human wellbeing, ineffective; and with promised outcomes mostly undeliverable, at risk of doing as much harm as good in the longer run16. In short, the second apparent option for achieving emancipatory change is really no such thing. It attempts to harness inherently harmful forces as a mechanism for avoiding harm. I cover it here only because it appears to be the traditional way of responding to the forces in question, one that operates at multiple levels. Against this background, it is easy to feel helpless, at least where economic concerns are the focus. It seems very often to be the case that there is little to be done to improve the situation in which we find ourselves, at least for the time being. In such conditions, certainly, different ways of bringing about progressive change must be sought. This brings me to a third sort of strategy for emancipatory change noted earlier. If harmful forces cannot be eradicated at the relevant operative level, or in a piecemeal or step-by-step fashion within specific communities, or be harnessed in some beneficial fashion, the remaining alternative is to seek to erect barriers to their operation, to provide local shelters as forms of protection; it is to create communities of care. 5.3  Protective shelters or communities of care By a community of care, I mean simply an emergent (sub)community that is organised in a manner that participants within it are able to flourish or achieve a degree of flourishing significantly greater than that which they would otherwise be able to in the wider nesting (set of) community(ies), along at least one axis. These are entities or ventures that I have elsewhere also referred to as eudaimonic bubbles (e.g., Lawson, 2017a). As the metaphor of a bubble suggests, each is usually somewhat precarious, being likely to be continually opposed by, because flying in the face of, wider continually operative antagonistic forces, with bubbles emerging only where a group of individuals can successfully achieve a degree of insulation from specific sets of dehumanising or otherwise oppressive features characteristic of the wider community context. They are, and might equally be labelled, communities of resistance.

240  Implications for practice Familiar examples of the sort of (sub)communities I have in mind include close friendships, partnerships, many families, refuges, perhaps certain monastic communities, possibly some retreats, even (or perhaps especially) various study groups (particularly where the context is widespread intellectual dogma, as in the modern economics academy17) and, fundamentally, many of those arrangements that have been set up specifically for individuals who, for some shared reason(s) (religion, skin colour, sexuality, beliefs etc.), experience regular harassment, oppression, discrimination or general negative treatment by numerous (blinkered) members of the wider, more dominant nesting community. Elsewhere, I have also suggested that the National Health Service (NHS) of England (like the other national health services of the separate countries of the UK) was formed on this basis. This is a case I have explored elsewhere at length (Lawson, 2017a). In all such sub-communities, interactions are, or can be, organised on the basis not of greed, exchange, opposition, oppression, unnecessary hierarchical power, dogma and suchlike, but rather of cooperation, unconditional giving, open mindedness, love and care. The aim is to avoid the worst effects of specific harms, including forms of discrimination, abuse, intellectual dogma, profiteering, harassment and so on, and instead to facilitate inclusiveness and authenticity, with resources allocated in accordance with principles of sharing and meeting needs. Moreover, of course, greater wellbeing is, in any case, something that warrants pursuing not just for the future, but also for the here and now (although, once established, various care communities may well also serve as beacons or staging posts for developments that one day follow in a more generalised fashion). What are the conditions of possibility of these care communities? Elsewhere (see Lawson, 2017a), I have argued that, apart from the cases of very small groupings, say of friendships and family support units (which are continuously changing anyway), two conditions in particular are fundamental. These are the achievement of 1) a significant level of critical awareness on the part of the participants; and 2) supportive material conditions. The satisfaction of these conditions has been evident where communities of care have been successfully established, and it is difficult to imagine these will not be conditions of their emergence and survival in all cases18. Within small groups, where only a few individuals are involved, as perhaps with a set of friends or a family, participant awareness of operating in (caring) ways that are quite different from, and often even opposed to, the dominant norms of the wider society or relevant communities may well be merely implicit and unacknowledged. This can be so despite exchange, and specifically monetary-based exchange, activities being doubtless the norm in most spheres of their participatory interactions. Even in these smaller communities, though, a critical awareness will likely soon emerge if, say, others in the relationship suddenly put a money price on

Emancipatory social change  241 (or demand something in exchange for) things they previously regularly contributed unconditionally as a spontaneous part of the relation. Small groupings of this sort are indeed, or are certainly capable of being, care communities. Where larger groupings are involved, however, as where the goal is actively to achieve more specific forms of protection, the noted two conditions appear essential. And as groupings become larger, it may be that these two conditions will be more difficult to meet or sustain − especially the former one, the need for sustained critical awareness of all participants. Communities of the size of nation states may have significant resources at their disposal, but with no possibility, much of the time (though with exceptional periods – see below), of achieving the requisite level of critical awareness for conditions of flourishing to be realised19. 5.3.1  Producing and sustaining communities of care If such communities are an emancipatory development, how are they achieved? There is no single process whereby they are brought into being or emerge. We are likely all familiar with versions of them at some level, for whether we consciously recognise it or not, they are the basis on which most of us have been reared, socialised and encultured or at least receive help when needed; and we all − or most of us, on occasion − help bring new ones into being. Frequently, of course, a group of concerned individuals will intentionally get together to create one or more of such communities in reaction to severe forces of oppression that they are especially concerned by. But there are numerous other ways in which they can and do regularly come about. They may simply arise somewhat accidentally. Friendships can work like this. Or some likeminded individuals may just happen to come together fortuitously (as with some academic groups) and realise that they have a common reason, and an opportunity, to provide a defence against specific obstacles to their wellbeing in pursing some shared interest or concern under conditions that, in significant ways, are of their own choosing. Or they may emerge when major events are held within a community, facilitating a greater awareness amongst participants of the relatedness of each to every other and the importance of sharing or giving. Examples might even include the community’s hosting of a major international event such the Olympic Games or the football World Cup, whereupon the sense of sharing and giving may well extend to community guests. Indeed, the UK’s hosting of the 2012 Olympic Games witnessed the spontaneous emergence of a number of local groups or communities of carers/ helpers that came together with the intention of simply giving their services to visitors20. Alternatively, care communities may simply come about where groups of critically aware individuals grasp opportunities thrown up by relatively

242  Implications for practice recent and yet-to-be controlled developments in technology and suchlike. Currently, ongoing advances in digital information technology have provided significant new opportunities for such communities of a specifically economic nature to emerge. Here it is readily feasible to draw community participants from across even a range of national communities and produce effects that cut across existing communities. Many such givers of services can be found via the Internet. A prominent recent example where digital technology has been harnessed to allow a community to orient itself to giving, rather than to exchanging, valuable services is, of course, provided by Wikipedia21. Equally significantly, communities of care can result from ‘external events’, not least potentially harmful ones, that bring an existing community’s participants together in resistance and in a manner that aspects of their common interests as human beings are, more so than is usually the case, apparent and seen to be realisable. Major events of this sort include wars, disease, tsunamis and other ‘natural’ disasters. Thus, in the UK, the shared experience of the hardships and cooperative activities of the Second World War facilitated the creation of an NHS community in each of its nations22 and so forth. The foregoing are merely brief examples of ways in which communities of care can emerge, with some quick reference to cases where they have indeed done so (see also Lawson, 2017a). Once formed, the most difficult task is doubtless that of maintaining a required level of critical awareness of participants. Certainly, most care communities of any size will need active protection. For, as I say, there typically will be antagonistic forces rooted in the wider society that at the time at least (erroneously) resent or fear many developments of the sort in question and look for opportunities to undermine the counterculture facilitated by an emergent progressive bubble. Indeed, so strong, very often, are the forces that work to obstruct care communities that a good degree of vigilance is usually essential if many of the latter are to survive. This, incidentally, is why I think David Elder-Vass’s (2016) emphasis, in his excellent book that focuses on alternative economic forms, is not quite right. Elder-Vass recognises that many of the communities on which I focus are examples of such forms, but he mainly focuses on their being merely different from (rather than being created in opposition to, and as a form of protection from) the dominant forms and prominent conceptions of them. Elder-Vass even holds that as economic forms these alternatives exist outside of capitalism and alongside it. In contrast, I am in effect arguing that capitalism (as with other structures such as patriarchy) is a system that is overarching and all-embracing, albeit in process and ever-­changing. It is a system in which activities of money accumulation or profit making have come to dominate, an all-encompassing totalising process that shapes aspects of everything, including forms of resistance. It provides a context, specifically, within which all emergent sub-­communities concerned with emancipatory practices, including those

Emancipatory social change  243 focused on provisioning of products and services, must both exist and constantly protect their achievements. Consider, as very brief illustrations, two of the examples of emergent care communities mentioned above, namely the creation of Wikipedia and the NHS. In the former case, one focused upon by Elder-Vass himself, it can be noted that Wikipedia, or a branch of it, has witnessed attempts to incorporate the community into the wider set of money-in-search-of-more-money oriented productive activities. Specifically, a version of Wikipedia in a particular language sought to accept paid advertising. This attempt was not successful because many of the (unpaid) editors immediately deserted or threatened to leave to work for an alternative version of the encyclopaedia instead (see Tkacz, 2011). But the tendencies to incorporate Wikipedia in the money-making systems persist, of course. Projects such as Wikipedia too require communities of critically aware participants conscious of their place within the wider system and concerned to protect it. And even (or is it especially?) the NHS, long thought by many observers to be, and still regularly presented as, indestructible23, is and in fact has always been a target of relentless attack. Currently, indeed, various informed close observers believe we are witnessing the beginning of the complete demise of the NHS and its replacement by something like a USstyle insurance system favouring the rich24. The forces responsible are discussed elsewhere (Lawson, 2017a). But they have been present throughout the history of the NHS, including within the Tory government of 1951 (three years after the NHS was created). Despite the widespread and enduring popularity of the NHS and its obvious successes, the dominant ideology of those with power within the wider nesting UK community has throughout been one of unquestioning support for a ‘free’ ‘market’ system instead, including for the provision of healthcare, meaning, in essence, a system organised to prioritise or facilitate processes of money accumulation or profit making, and so the acquisition of ever-greater power by the few rather than (indeed to the detriment of) generalised flourishing25. I might further note that even various commentators concerned actively with achieving conditions of flourishing have occasionally sought to undermine those entities I am calling care communities. This is notably so where it is (erroneously) held that projects based on modelling and planning are viable, so that care communities are in effect interpreted as competing for, and where successful as representing a misallocation of, existing resources including the energy of activists. Paul Mason (2015a, 2015b) once more provides an example, seemingly dismissing ventures of the sort that I am calling care communities as ‘just a bunch of utopian dreams and small-scale horizontal projects’, and suchlike26. So, for a number of reasons, care communities − which I argue are one of the seemingly rather few progressive forms of resistance currently achievable, given the way social reality is constituted − are especially precarious and, I suggest, in need of continuous attention and significant resourcing, understanding and protection.

244  Implications for practice

6  Final comments In sum, with social reality being of a nature that programmes of forecasting and event planning are largely irrelevant, projects concerned with knowledgeably seeking to bring about a better world for all must be transformative in nature. In this chapter I have made some brief suggestions as to how such projects might proceed. No doubt the more reliable long-term transformative strategies for achieving conditions of generalised flourishing are those of continually removing obstacles to their attainment, where feasible. But many of these likely require that, throughout the globe, we all move together as participants of linked communities, to transform the social world, cooperatively, peaceably, in a manner that is as consistent as is feasible with the values of the eudaimonic society being pursued. It is not clear that the conditions for such widespread linked projects are yet present. Nor, in many spheres including the economic, are conditions in evidence that would allow the more piecemeal community-based approaches to gain purchase. At the same time, the forces that need removing do not lend themselves to being harnessed within emancipatory projects, the latter’s goals being inconsistent with their very operation. So in many cases, at least for the time being, the construction of local care communities that provide relative protection for those involved from at least a set of wider harmful forces appears to be the best that can be achieved27. It is, of course, not possible to determine whether, and if so when or how, a eudaimonic world will come into being. I cannot stress enough that the future is open; the possibilities for detailed event prediction just do not exist. It may well be that, as I have often argued (e.g., Lawson, 2014), the conditions for achieving the good society emerge, if at all, only after almost every national community on the planet has been incorporated at some significant level into the industrial system, and those that misguidedly prioritise accumulation before all else find that there is effectively nowhere to turn to obtain new forms of unprotected labour. With many regions of the world, not least large parts of Africa, waiting, the process still has a way to go. Even were such an integrated scenario ever to come into being, any emergent critical awareness and explicit desire for emancipatory change may need a helping hand in the form of an ‘external’ stimulus. But the overriding factors are that the future is open, we always start from here and community-oriented transformative processes are the means28. No doubt the brief discussion of possibilities for practice elaborated here will be greeted rather unenthusiastically by many, not least those impatient to get on with improving the lives of all as soon as possible and looking for quick fixes, typically at a national level; and quickly side-lined. The foregoing analysis certainly identifies grounds for doubting the efficacy both of traditional forms of political-economic practice, of activities based on results of central planning and also of the forces of technology in themselves necessarily to usher in a better world. It would be wrong,

Emancipatory social change  245 however, to suppose that the overall conception sustained, its associated vision and its implications for practice, ground only a pessimism regarding future possibilities. To the contrary, I believe there are significant grounds for optimism that a better world can ultimately be achieved. But these grounds lie not in any supposed efficacy of forces acting from above, but more fundamentally in the perpetual drive of all of us at some level to act in accord with who we really are, whatever the possibilities for practice that exist. The real basis for optimism, I suggest, lies in the condition that the flourishing of each of us depends on the flourishing of all others coupled to the insight that at some level we all recognise this. When not overly deflected by the fears, worries, disappointed expectations and overly limited understandings of the sort currently encouraged via the promulgation of ideologies based on misrepresentation, fear and inauthenticity, our real natures are observed to shine through as we each, in our own ways, seek to remove obstacles to the flourishing of all. This repeated actualisation of our real selves imparts a tendency that is ever in play, even where it is frequently misdirected or sometimes dominated by countervailing tendencies that push us to doing harm. It is like the action of gravity that persists on the autumn leaf even as the latter flies over rooftops and chimneys. It is a prodding, an impulse, a force, a tendency for good that is revealed over and again, everywhere and everyday (see Lawson, 2015b). Practices of removing obstacles to flourishing as well as those of establishing care communities are themselves but significant ways in which the tendency can and regularly does manifest itself. The most difficult obstacles of all to overcome, no doubt, are those that prevent us from clearly recognising the path(s) to take29. The greater strategic need is for processes that are concerned not with force, but with removing blinkers, reducing mistakes and facilitating a greater critical awareness of us all, allowing the noted tendency to work that much quicker. According to this perspective, it is each and all of us, the whole of humanity − not laudable state functionaries specifically, nor (or not inevitably) a single class, nor technology, and certainly not the economic planner  − that is the principal potential agent of emancipatory change. And it is the perpetual striving of each of us to achieve greater flourishing for all in the here and now that provides the continuous push in the direction of a better world for all. The result, as I say, is a tendency to the good society that at some level is always present and in play, continuously working through us all.

Notes 1 A human organism is an animal of the species homo sapiens. A human person, I take it, is grounded in, emergent from, but irreducible to, that organism. The human person is distinguished in various ways from the human organism, but not least in being equipped with both a sense of self (which can be

246  Implications for practice acquired without language − see in particular Piaget, 1955, 1967, 1974; Archer, 2000, 2007, 2012) and also a first-person perspective − which may or may not require a concept of self that presupposes language (I believe it does not; but for the opposite view, or at least support for the idea that any robust, rather than rudimentary, form of first person perspective requires language, see Baker, 2000, 2013, 2015). A first-person perspective allows, or consists in, an awareness of the self as the source of a perspective, a capacity to recognise oneself as oneself from the first-person perspective (again see, e.g., Archer, 2000, 2007, 2012). If, then, the human person and human organism are not identical, there is a decision to make as whether to use the term human being to apply to the organism alone, to the person stage alone or to both. I certainly do not restrict it to the organism alone. Of course, a person is also a human organism. Here I take ‘human being’ as being a reference to either. However, because, in the current chapter, my concern is mostly with the human person, any references to ‘human being’ will mostly be interchangeable with the latter. 2 I take it that our actual practices, resting on (always fallible) assessments, can be mistaken. There is an unknown truth of the matter as to whether a set of practices is actually emancipatory in the relevant context; we can only choose those that are better grounded. In other words, the position adopted here is a moral realism (see Lawson, 2015b). In that the objects of moral deliberation are, I am supposing, forms of human practice and other (largely) social phenomena (rather than putative phenomena of some supposed emergent ethical realm), this moral realism is grounded in an ethical naturalism (again, on all this see Lawson, 2015b). (And, for reasons given elsewhere, I have labelled the overall ethical position defended as critical ethical naturalism; see Lawson, 2015b). 3 Many such harms arise because we uncritically go along with various oppressive norms or aspects of the ‘culture’ of the community into which we are born or find ourselves, often not even recognising them as such. There is a tendency, too, to accept overly uncritically the views of prominent commentators, ‘experts’ and dominant opinion. In addition, of course, various agencies sometimes deliberately promote alienation and inauthenticity, encouraging us to act against our real selves. In this, typically, the agencies involved usually either fail to understand the conditions for general flourishing or misguidedly suppose that the wellbeing of themselves and/or those closest to them ought to be given exclusive attention and/or can somehow be met by sowing wider division and generally dumbing down. When conditions allow, especially those of hardship, others overtly adopt simplistic populist stances to empower themselves, thereby seeking (or anyway gaining) a following, sometimes with the latter momentarily willing to overlook harmful pronouncements and even deeds, and suchlike. 4 Being untrustworthy and telling lies etc. are efficacious (on their own terms) only where the norm is being trustworthy and telling the truth etc. 5 And not merely to other human beings. I think we all can recognise that we are givers by reflecting on our daily lives. We observe it in all others every day; and in ourselves, at least on examination. Those of us who are academics appear especially lucky in that opportunities for unconditional giving are ubiquitous. Without pay (in most cases anyway) or wanting anything in return, and over and above the required teaching, research and administrative activities for which we are paid, we repeatedly read and provide comments on papers of colleagues, referee papers for journals, edit journals, run symposia or special issues in journals, give seminars on our research findings or otherwise pass them on to others, offer our criticisms to seminar presenters, chair seminars, organise them, organise conferences, raise funds to organise conferences, edit books, run and edit book lists or series, referee book proposals,

Emancipatory social change  247 organise, run, and/or present at summer schools, participate in a range of academic projects, supervise PhD students, read and comment on their essays, endlessly write references, undertake ‘external examining’ for other universities, host visitors… The list goes on. All these activities are practicably avoidable and yet widely engaged. Moreover, most academics, like everyone else, doubtless give significantly more in their wider community lives, and more still to any families they may be part of, especially as parents. And so on. 6 Even when individuals do pursue exchange activities, including that particularly unhappy form of power-conditioned ‘deal making’, they always give more − whether polite conversation, a smile, information on the weather, directions or whatever. Exchange presupposes giving and is, for us all, quite dispensable (especially given possibilities of digital technology; see Mason, 2015a, 2015b); whereas giving is basic and part of who we are. 7 Predictive failure itself is manifest in the UK in the almost daily official announcements of revisions to previously accepted governmental model-based forecasts and estimates; in the Brexit debate, in particular, it is manifest in each side regularly ridiculing the other side’s modelling assumptions and forecasts. Yet the practice everywhere continues as if it will be OK the next time. 8 My own view, to the contrary, is that, as always, it is the dominant rather harmful forces that will bear most upon how novel developments are harnessed and incorporated. Such tendencies are everywhere to be seen. They even mould the use of results of research designed and intended to save human lives or cure diseases. Antibiotics, discovered within the academy, for example, undoubtedly carried the potential to undermine obstacles to human flourishing. But they are becoming useless to humans, not least through our excessive contact with them via eating meat of animals that have been fed them. For they are used widely on farms etc to keep animals alive in squalid and contained conditions. In this, the welfare of neither humans nor animals counts for much; applications are determined according to the criterion of generating the greatest profits. Drug companies have the know-how to generate more varieties of antibiotics, but find that profits lie in producing drugs which patients will take for life; antibiotics are usually prescribed only sporadically and just for a week or so at a time. As always, it is the goal of accumulation that determines how developments in technology are employed, which of its potential uses will in fact be realised. It is certainly the case that current forms of ‘new technology’, especially those connected with robotics, are such that machines could be produced to do many if not most forms of work, and in that way and others could be used to facilitate a system of human flourishing. But technological applications, if to repeat, will in the main be determined not by emancipatory concerns particularly, but more by forces that dominate the context. 9 At points, Mason does distance himself from forms of ‘command control’; instead, he emphasises a hope that modularity in planning can be achieved and reveals a sensitivity throughout to avoiding putting too much stress on planning per se. But the latter is fundamental and indeed central to his project nonetheless. And, in describing its role, Mason unquestioningly accepts all the untenable presuppositions of modern economic modellers, not least of those participants who somehow believe they escape the ontological critique by focusing on methods of simulation including agent-based modelling and the like. 10 Mason writes: ‘Given that we are decades into the info-tech era, it is startling that […] there are no models that capture economic complexity in the way that

248  Implications for practice computers are used to simulate weather, population, population, epidemics or traffic flows’ (Mason, 2015a, p. 271). The situation is also something to be lamented and wished away: If I could summon one thing into existence for free it would be a global institution that modelled capitalism correctly: an open source model of the whole economy; official, grey and black. Every experiment run through it would enrich it; it would be open source and with as many datapoints as the most complex climate models. (Mason, 2015b) 11 See www.theguardian.com/world/2016/nov/01/pope-francis-women-neverroman-catholic-priests-church (downloaded February 26, 2018). 12 As I write, prominent examples of liberating processes are those bound up with the ‘Me Too’, later ‘#MeToo’ and ‘Time’s Up’ campaigns. The former originated as a grassroots movement in 2006 when community organiser Tarana Burke entered the phrase ‘Me Too’ on the Myspace social network, as part of a campaign to remove the sense of individual shame and suffering among ‘women of colour’ who had experienced sexual abuse. This campaign sought to promote ‘empowerment through empathy’, and specifically to reveal to others in relevant underprivileged communities that they are far from being alone in being sexually assaulted. As Burke herself observed of the ‘Me Too’ slogan: ‘It was a catchphrase to be used from survivor to survivor to let folks know that they were not alone and that a movement for radical healing was happening and possible.’ Campaigning under this catchphrase was extended in 2017, when Alyssa Milano encouraged a widespread using of the phrase to reveal something of the extent of problems with sexual harassment and assault. In the wake of the campaign, many countries (including the UK, the US, France, India, China and Japan) have witnessed media discussions and debates concerned with eradicating sexual harassment throughout society, along with associated concerted movements to end forms of sexual violence in those locations. 13 Parenthetically, in so doing they often present their decisions as being guided by a reliance on models and model projections, even when they patently are not. Even though Brexit is so clearly about structural transformation, commentators on both sides of the ‘debate’ regularly misleadingly concoct ‘justifications’ couched in terms of model forecasts of events that will or will not happen. The considerations that really motivate all concerned, though, have far more to do with the location of centres of power, relations with others, production and trading systems and images of identity. 14 The economic system is not only increasingly global in nature, but often driven by transnational organisations that appear out of control (see Lawson, 2015c [Chapter 4 above]), being quite beyond the significant influence of any national body acting alone. 15 Rarely is this acknowledged, though. Rather, those in, or seeking, power seem compelled continually to present projects as able to succeed at the national level by way of accepting, working within and harnessing the wider forces, and adopt the rhetoric of expected success in this regard. Those formulating policy proposals often identify the most recent periods wherein a country is interpreted, at least by some, as having been relatively prosperous (usually matching the relative suffering of communities elsewhere) and present them as some sort of ‘normal’, a state from which any departure considered detrimental is described as abnormal and something to be somehow rectified. And the features usually identified as explaining departures from idealised norms are the specific policy measures put in place by one or more of the previous governments.

Emancipatory social change  249 The clear result, at the governmental level, is a continuous shifting and sliding from one inadequate kind of economic strategy to another, often between any one and its apparent negation − for example, between programmes of increased public spending (Keynesianism, anti-austerity, stimulus, programmes of public investment) and those of cutting spending (austerity, monetarism, neo-liberalism) − in forlorn attempts to shore up locally (nationally) a system being battered by forces that are anything but locally confined, whilst seeking to keep a misinformed, largely uncomprehending electorate on board. Although the position I am defending will likely be regarded by some as inconsistent with Keynesian approaches, it is to a degree in the spirit of Keynes’ own vision. As he wrote in 1925, ‘I believe that in the future, more than ever, questions about the economic framework of society will be far and away the most important of political issues’ (IX: 295). Indeed, throughout his career, Keynes interpreted capitalism as an ‘intermediate’ arrangement necessary to the attainment of a ‘final’ end, namely a community of individuals dominated by a true conception of the ‘good life’. Understood in this way, capitalism serves to mediate the coming into being of the ‘ideal commonwealth’ (VII: 374). 16 Specifically, consequences accumulate in the form of a general deterioration of living standards, decay in infrastructure, a selling-off of national assets, increased national indebtedness, declining health and education standards, and a general dumbing down and consequent increased sense of alienation and hopelessness. Worse, where expectations are continually disappointed, it is all too easy to be encouraged in the view that the reason for decline is the behaviour of some ‘other’; that some group − perhaps close to us, but that we perceive as different (e.g., in terms of appearance, gender, country of origin or religion, recent arrival in a locality or simply location etc.) − is to blame. 17 Though not the biggest issue in the scheme of things, the state of modern economics does illustrate the reasoning within the main text. For many years, the discipline has been dominated by those who advocate that the project of mathematical modelling is the only proper and acceptable form of economics. This project has been widely found to be almost without relevance to the provision of insight (see, e.g., Lawson, 1997, 2003). Yet throughout the international community of academic economists, the criteria used for academic appointments, promotions, publication, awarding prizes and general prestige turn almost solely on contributions to mathematical economic modelling. Because the project is explanatorily so unsuccessful, those with positions of relative power usually seek to maintain their positions by creating conditions that prevent alternative views even receiving a hearing. Given this context, it is difficult for any single department or faculty to change the way economics is done. If they seek to do so locally, students who are not trained in all the latest modelling techniques cannot go on to gain posts elsewhere and research undertaken is, because not mathematical, debarred from publication in journals regarded as core, and consequently funding is hard to come by; and so on. Nor, clearly, can the forces of this dogmatic obstacle to intellectuality be harnessed to achieve the latter. Some have tried. But this has always rested on a misanalysis of the problem. Many radicals, failing to see that the emphasis on modelling per se is the problem and instead supposing that the problem lies in the sorts of substantive assumptions made and/or conclusions drawn, do themselves advance the mathematical modelling project, albeit in ways regarded/presented as more radical, and thereby in fact sustain (indeed, become part of) the problem. Given this scenario, my own experience has been that the only way to avoid the relevant dogma, to create conditions of intellectual integrity, openness and

250  Implications for practice

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criticality, is by way of participating in localised communities constructed for this purpose. This is how I have always interpreted the Cambridge Social ­Ontology Group, amongst other such collectivities. A meeting of the former condition is especially significant, though fulfilling both is essential. Eudaimonic bubbles or communities of care, as with any form of community, are organised through positional rights and obligations. The intention of such communities (whether or not theorised in such terms) is easily seen to be to achieve a structure of rights and obligations that facilitates flourishing, and so which almost definitionally is significantly at odds, and indeed in conflict, with various obstructing forces operative in the wider context. It is very unlikely that such a scenario can be successfully achieved unless it is the case both that participants are knowingly aware that the practices thereby conditioned are a significant departure from those of a sort followed more widely, and that resources are available to render the bubbles sustainable. Where the appropriate size for such a sustainable community of care is difficult to gauge in advance of its creation, one obvious strategy is to aim for something like the minimum necessary to be workable. For if such eudaimonic communities or bubbles are created smaller than their potential, they can likely evolve or expand in bottom-up, relatively spontaneous ways that do not challenge their emancipatory purposes. Or, to the extent that they are set up according to eudaimonic concerns along one axis, but have participants who seek to extend their axes of concern, their development can be monitored and managed to ensure that any extended concerns fit with, or do not compromise, existing community achievements. Such bubbles, after all, are only worth maintaining if their principles are relatively uncompromised. But, whatever the context, there will be a limit on the size or shape of a sub-­community of resistance that can successfully and safely be sustained. For, by definition, the goal now is to form communities of emancipated practices within contexts where the dominant background forces are ­counter-emancipatory and can be expected to work typically to reduce the scope of these care communities or burst any bubble so formed entirely. The UK’s hosting of the 2012 Olympic Games inspired about 70,000 unpaid volunteers to come forward in order to help with the smooth running of the event. These purple-dressed volunteers or ‘Games Makers’ played a variety of facilitating roles across the Olympic venues, from welcoming and guiding attendees to transporting athletes and helping behind the scenes, not least in a ‘technology team’, including getting the results quickly displayed. They were givers, not exchangers. And they clearly enjoyed it − as we all tend to do, when giving freely and contributing to the wellbeing of others. It is easy to see in this how better run everything would be if all tasks were designed and undertaken both critically and voluntarily. Wikipedia is the product of an emergent community of unpaid knowledgeable volunteers simply giving their time and expertise unconditionally in seeking to make encyclopaedic information available freely to all. Even in the case of ventures such as Wikipedia, as with all others that occur within modern society, monetary funding of some sort is required. Thus, some machine/ server and administrative costs etc. are involved. But the new technology also allows crowdfunding, meaning that critically aware individuals worldwide can themselves give unconditionally, helping lay the appropriate material conditions. Note that, in the case of digital information technology, the advantage for bubble creation is not that digitalised stuff is somehow immaterial (it is not). Rather, benefit lies in part in the cheapness of the materials in which digital

Emancipatory social change  251 information is repeatedly instantiated and transferred across items and locations, and also in the fact that everyone can be, and very many are, connected by a network, and specifically the Internet. As a result, anyone wanting to contribute to the flourishing of others can make useful creations of their own ‘freely’ available online. Many clearly do. The Internet hosts a multitude of downloadable voluntarily donated programmes, products and processes designed to meet human needs. These range from provision of music, lectures, recipes and healthcare advice to Wikipedia itself. Usually, these actions involve a group of people participating around a project, with provision for others to enlist as participants in this community as time goes on. In the light of these and other ongoing developments in technology, it seems likely that the material basis for achieving a eudaimonic society that is, amongst other things, workless and moneyless, already exists. The problem, as always, is that all new developments are introduced in a context where they are harnessed by the dominant prevailing forces. As a result, devices that could be employed for emancipatory purposes tend currently to be used in ways that, in effect, constitute more of the same, most obviously being shaped to facilitate money accumulation or profit making, albeit in new forms and novel fashions, as well as items and novel forms of warfare. In all cases emancipatory progress requires a collective critical awareness. 22 As I say, in my assessment, the most significant example of a successful ­national-level bubble in the UK, certainly over the last century, was the formation in 1948 of the English NHS (along with the other health services of the UK). Let me briefly say something about it here. The external event that most immediately underpinned its emergence was, of course, the Second World War. Elsewhere, I have already defended the case for understanding the NHS as a very significant bubble (see Lawson, 2017a). It was set up on the principles of everyone in the community giving unconditionally (through taxation) to fund the provision of free healthcare for all who needed it. Allocation of healthcare services was based on clinical need, not ability to pay. As well as being available to every legal resident in the United Kingdom, many services − for example, treatment of emergencies or infectious diseases − were free to all, including visitors to the UK. This was giving, not exchanging. In short, the NHS was established in accordance with the organisational criterion I have elsewhere (Lawson, 2017a) called the eudaimonic (economic) principle, namely: ‘each giving according to her or his abilities to others according to their needs, in the pursuit of generalised flourishing in our differences.’ Such a principle can hold under current conditions, at least where the prevailing funding/taxation system is progressive. Clearly, the NHS was established as a eudaimonic bubble. Significant to the establishment of the NHS was that the Second World War, at least within the UK, constituted a time of declared national unity. People of all classes and genders were required to join together and cooperate as a united community in resisting the incursions of a declared common enemy. Under such conditions, not only are the usual forces that work to redistribute from poor to rich put in relative abeyance, but efforts are made to meet the expressed needs of the poor and so keep everyone on board. The emphasis was on inclusiveness, so that the needs of all were acknowledged and regularly met. Unsurprisingly, then, the war years saw great improvements in working conditions and welfare provision for all, improvements which paved the way for the post-war welfare state. There was, for example, an expansion in infant child, and maternity services. In June 1940 grants of fuel and of subsidised milk to mothers and to

252  Implications for practice children under the age of five were made by the Official Food Policy Committee (chaired by the deputy Prime Minister and Labour Leader Clement Attlee), leading during the following five years to a 50% increase in the proportion receiving milk (rising to 73% in 1945). Also in 1940, the Board of Education made free school meals more widely available and free vaccination against diphtheria was provided for children at school. Supplementary pensions for the elderly were also introduced in 1940, with further improvements in rates and conditions for those in receipt of supplementary pensions and unemployment assistance in 1943. Food prices had been stabilised in December 1939, initially as a temporary measure, which was rendered permanent in August 1940, while both milk and meals were provided at subsidised prices, or free in those cases of real need. In July 1940, increased Treasury grants led to an increase in the supply of milk and meals in schools, with the number of meals taken doubling within a year and school milk increasing by 50%. The proportion of children eating at school rose from a mere 3.3% in 1940 to about 33% in 1945. Those taking milk increased from about 50% to roughly 75%. Wartime rationing actually led to significant improvements in the diets of poor families. The poorest one-third of the population of Britain who, in 1938, were chronically undernourished had their first adequate diet in 1940 and 1941 (a development that led to the incidence of deficiency diseases and infant mortality falling markedly [see Timmins, 2001]). Moreover, the fact of large numbers of civilian casualties from bombing raids necessitated the provision of free healthcare. This meant that large numbers gained access to healthcare of a form they had never previously experienced. Once experienced, this of course was not a facility that many wanted later to lose. Such conditions, as with any of generalised participation oriented to the common good of a community, facilitated an increase in general political awareness, the pursuit of authentic human qualities and the seeking out of ways of giving and meeting needs over exchange, competition, individual power and profit seeking. Prior to the war, healthcare provision in the UK was non-integrated, of a low quality and reserved for the few. The need for something like a state-­ sponsored and organised health service available to all always existed. But it was only against the background of the sorts of conditions of awareness and inclusiveness thrown up by the war that proposals for an NHS had a chance of being accepted. In the event, these conditions − including mass participation and so rising political awareness − brought to power, in the 1945 elections, a Labour Party that responded to the general demands for public healthcare system with a manifesto promising a total revolution in healthcare. Fundamental in all this was the sharing of suffering and sacrifice. This inevitably allows participants to recognise that the needs of each of us are bound up with those of others, and that those with the power to do so have an obligation, as well it being in their own and everyone’s interest to provide basic healthcare, more equal rights and conditions that better facilitate wellbeing more generally. All members of the community can better flourish if each knows that all have access to these conditions, especially to good medical treatment when in need. Aneurin Bevan, who took the lead in establishing the NHS, had recognised this all along, observing in his 1952 book In Place of Fear, how: Society becomes more wholesome, more serene, and spiritually healthier, if it knows that its citizens have at the back of their consciousness the

Emancipatory social change  253 knowledge that not only themselves, but all their fellows, have access, when ill, to the best that medical skill can provide. (Bevan, 1952, p. 79) He notes, too, in respect of the NHS specifically, that: ‘A free Health Service is a triumphant example of the superiority of collective action and public initiative applied to a segment of society where commercial principles are seen at their worst’ (Bevan 1952, Chapter 5). There is much more to this period of history, of course (see Lawson, 2017a). The point illustrated, though, is that bubbles or care communities can emerge, and always have, at all levels where the relevant conditions can be satisfied, including most especially achieving an appropriate level of critical awareness. Although bubbles at the level of large communities are difficult to achieve where dominant forces continually work against them, there are occasions, typically stimulated by external events, where a sufficient level of critical awareness can emerge. The point, of course, is to focus always on the real opportunities provided by the relevant (always changing) contexts. 23 Thus, Tony Benn speculates (in Michael Moore’s 2007 film Sicko, highlighting the dire state of US health provision compared to others, and especially to the NHS) that attempts to abolish the NHS would trigger a revolution (in the sense of a popular uprising). Earlier, Tory Chancellor Nigel Lawson, in his 1992 book The View from No. 11, observes (critically) that ‘The National Health Service is the closest thing the English have to a religion’ (p. 613) (adding somewhat sarcastically: ‘with those who practice in it regarding themselves as a priesthood. This made it quite extraordinarily difficult to reform’). 24 Thus, in a recent study, the NHS doctor El-Gingihy (2015) summarises his findings and contribution as: […] charting how the NHS has been insidiously converted into a market-­ based health care system over the last 25 years. […] This process is accelerating […] and the very existence of the National Health Service is in danger. This matters to all who use the NHS or are concerned by the privatisation of public services and the dismantling of equitable healthcare and welfare. The NHS – long the envy of the world – is being broken up into a universal insurance system based on the US model. Multinationals are opening the NHS oyster following on from the Health & Social Care Act 2012 and in preparation for the forthcoming Transatlantic Trade & Investment Partnership (TTIP EU-US trade agreement). (p. 1) Or as Colin Leys and Stewart Player were viewing developments back in 2011: So in spite of its great popularity Britain’s most famous post-war social achievement was unravelled through a series of step-by-step ‘reforms’, each creating the basis for the next one, and always presented as mere improvements to the NHS as a public service. They were billed as measures to reduce waiting times, to offer more ‘choice’, to achieve ‘world class’ standards, to make the NHS more ‘patient-centred’ – anything but the real underlying aim of the key strategists involved, to turn health care back into a commodity and a source of profit. (Leys and Player, 2011, p. 5) 25 Such powerful forces have throughout levelled attacks against the NHS in all its forms. This opposition can be prominent and highly vocal. But more often, the manner of seeking to undermine is deliberately low key and designed to give the impression that things are other than they are. This has been the dominant strategy since the 1980s, especially following the publication of a series of papers by the ‘pro-market’ Centre for Policy Studies exploring how the NHS might be slowly dismantled without the public really noticing what

254  Implications for practice is going on. In one of them, John Redwood, who had just become a Conservative MP, and Oliver Letwin, then merely an activist but later the Tory Minister of State at the Cabinet Office, put forward the following suggestion for transforming the NHS: But need there be just one leap? Might it not, rather, be possible to work slowly from the present system towards a national insurance scheme? One could begin for example, with the establishment of the NHS as an independent trust, with increased joint ventures between the NHS and the private sector; move on next to the use of ‘credits’ to meet standard charges set by central NHS funding administration for independently managed hospitals or districts; and only at the last stage create a national health scheme separate from the tax system. (See www.cps.org.uk/files/reports/ original/111027171245-BritainsBiggestEnterprise1988.pdf, downloaded on August 22, 2017) The above, of course, describes the sort of path and strategy that was thereafter followed. As I say, the consequent decline in the NHS is detailed elsewhere (Lawson, 2017a). Here I merely want to emphasise that even developments as large, established, successful, beneficial and popular as the NHS are not secure. They are based on principles that are not merely different from, but − as with all bubbles or care communities − opposed to, or in conflict with, the dominant mechanisms of the wider community environment. The original organisation of the various services that comprise the NHS was not just another economic form to exist alongside capitalist forms, but one that existed in opposition to them. 26 Keen to get on with ushering in postcapitalism, Mason views these care communities precisely as unhelpful distractions. He thus complains of those activists who are ‘preoccupied simply with opposing things: the privatisation of healthcare, anti-union laws, fracking – the list goes on’ (Mason, 2015a, p. 243). He reasons that the goal instead should be: to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system. We have to learn what’s urgent, and what’s important, and that sometimes they do not coincide. (Mason, 2015b) And: We need more than just a bunch of utopian dreams and small-scale horizontal projects. We need a project based on reason, evidence and testable designs, that cuts with the grain of history and is sustainable by the planet. And we need to get on with it. (Mason, 2015b) Mason is, of course, correct in identifying the parlous state of the modern world and the urgent need for change. But, like many others, he is overly hasty, I believe, in his call to action of a sort that promotes planning from above and the closure of organic movements organised from below. Mason too neglects, or avoids, the ontological legwork required to evaluate the feasibility of the sort of planning on which all such calls to action rest. The upshot then is that, if there is tendency for some − such as Elder-Vass − to view care communities as merely different from more dominant forces of organisation (rather than created in opposition to, and as protection from, wider forces inconsistent with flourishing), thereby encouraging perhaps too great an air of complacency, there are others, also clearly keen to pursue a better world, but who seemingly view care communities as mild irritants that do not deserve support.

Emancipatory social change  255 27 If it were currently feasible to remove the relevant widespread obstacles to flourishing − say, international processes concerned with accumulation − it would not be necessary to focus on producing and protecting associated care communities, such as the NHS; processes of allocation based on need, and supported by all, could emerge though everyone acting in authentic ways consistent with who we really are and the flourishing of all in our differences (including differing healthcare needs). But in the absence of such possibilities, care communities are an emancipatory alternative. 28 Were a concerted move to eudaimonia to arise, developments in technology, including ongoing advances in the communication of ‘digital information’, would doubtless be at the heart of matters, though technological advances are unlikely ever to be sufficient; technological possibilities have likely long been available in a form to render eudaimonia technologically feasible. The reason that robots do not already do most of the work is that the profit motive dominates and it is human beings who can most easily be used to generate it. 29 An additional huge obstacle, I believe, is the exploding world population size. This, though, is too large and complex an issue to be discussed here.

References Archer, Margaret S. (2000) Being Human, Cambridge: Cambridge University Press. Archer, Margaret S. (2007) Making Our Way through the World, Cambridge: ­Cambridge University Press. Archer, Margaret S. (2012) The Reflexive Imperative, Cambridge: Cambridge University Press. Baker, Lynne Rudder (2000) Persons and Bodies, Cambridge: Cambridge University Press. Baker, Lynne Rudder (2007) The Metaphysics of Everyday Life: An Essay in Practical Realism, Cambridge: Cambridge University Press. Bevan, Aneurin (1952) In Place of Fear, New York: Simon and Schuster. Elder-Vass, David (2016) Profit and Gift in the Digital Economy, Cambridge: ­Cambridge University Press. El-Gingihy, Youssef (2015), How to Dismantle the NHS in 10 Easy Steps, Alresford, Hants: Zero Books. Lawson, Nigel (1992) The View from No. 11: Memoirs of a Tory Radical, London: ­Bantam Press. Lawson, Tony (1997) Economics and Reality, London and New York: Routledge. Lawson, Tony (2000) ‘Evaluating Trust, Competition and Co-operation’, in Shionoya, Yuichi and Yagi, Kiichiro (eds.), Competition, Trust and Co-operation — A Comparative Study, New York, Berlin and Tokyo: Springer Verlag. Lawson, Tony (2003) Reorienting Economics, London and New York: Routledge. Lawson, Tony (2007) ‘Gender and Social Change’, in Brown, Jude (ed.) The Future of Gender, Cambridge: Cambridge University Press, pp. 136–162. Lawson, Tony (2012) ‘Ontology and the study of social reality: emergence, organisation, community, power, social relations, corporations, artefacts and money’, Cambridge Journal of Economics, vol. 36, no. 2, 345–85. Lawson, Tony (2013) ‘Ethical Naturalism and Forms of Relativism’, Society, (50), 570–5. Lawson, Tony (2014) ‘A Speeding up of the Rate of Social Change? Power, Technology, Resistance, Globalisation and the Good Society’, in Archer, Margaret S. (ed.)

256  Implications for practice (2014) Late Modernity: Trajectories Towards Morphogenic Society, Dordrecht: Springer, pp. 21–48. Lawson, Tony (2015a) The Nature and State of Modern Economics, London and New York: Routledge. Lawson, Tony (2015b) ‘Critical Ethical Naturalism: An Orientation to Ethics’, in Pratten, Stephen (ed.) (2015) pp. 359–387. Lawson, Tony (2015c) ‘The Modern Corporation: The Site of a Mechanism (of Global Social Change) that is Out-Of-Control?’ in Archer, Margaret S. (ed.) General Mechanisms Transforming the Social Order, New York: Springer, pp. 205–30. Lawson, Tony (2017a) ‘Eudaimonic Bubbles, Social Change and the NHS’ in Archer, Margaret S. (ed.), Morphogenesis and Human Flourishing, Dordrecht: Springer, 239–60. Lawson, Tony (2017b) ‘Comparing Conceptions of Social Ontology: Emergent ­Social Entities and/or Institutional Facts?’, Journal for the Theory of Social Behaviour, 46(4), 359–99. Leys Colin and Stewart Player, (2011), The Plot Against The NHS, Pontypool: Merlyn Press. Mason, Paul (2015a) Postcapitalism: A Guide to our Future, Allen Lane. Mason, Paul (2015b) ‘The end of capitalism has begun’, Guardian, July 17, downloaded on August 22, 2017 from www.theguardian.com/books/2015/jul/17/ postcapitalism-end-of-capitalism-begun. Piaget, Jean (1955) The Construction of Reality in the Child, London: Routledge and Kegan Paul. Piaget, Jean (1967) The Child’s Conception of the World, London: Routledge and ­Kegan Paul. Piaget, Jean (1974) Experiments in Contradiction, Chicago: University of Chicago Press. Pratten, Stephen (ed.) (2015) Social Ontology and Modern Economics, London and New York: Routledge. Timmins, Nicholas (2001) The Five Giants: A Biography of the Welfare State (revised edition), London: HarperCollins. Tkacz, Nathaniel (2011) ‘The Spanish Fork: Wikipedia’s ad-fuelled mutiny’, interview with Edgar Enyedy, Wired UK, January.

Index of names

Note: Page numbers followed by “n” denote endnotes. Adler, P. S. 111–12, 118n16 Alstead, Troy 147n2 Archer, Margaret xiii, 10, 147, 208, 220 Aristotle 226 Attlee, Clement 252n22 Benn, Tony 253n23 Bentham, Jeremy 119n25 Bevan, Aneurin 252n22 Blaug, Mark 23n6 Bohr, Niels 75n15 Brittin, Matt 148n2 Broderip, Edmund 121n33, 139–40 Burke, Tarana 248n12 Castro, Fidel 208–9 Cecil, Andrew 148n2 Coase, Ronald: and functions of the firm 110; on state of economics 22–3n6; theory of the firm 8, 85, 89, 115–16n1, 121n36, 128, 144 Cray, Charlie 148n4 Deakin, Simon 110–12, 115, 121n37 Drutman, Lee 148n4 Einstein, Albert 21–2n4, 24n11, 75n15 Elder-Vass, David 198, 242–3, 254n24 Ellis, Brian 74n3 Faulkner, Phil xiii Friedman, Milton 22–3n6 Gladstone, William 120n32, 139, 155 Göckel, Rudolf 21n2 Green, Philip 150n10

Hahn, Frank 8 Hames, Tim 150n10 Hannan, Michael 113 Harvey, Gideon 21n2 Hayek, Friedrich 9, 23n8 Hudin, Jennifer 10 Hulswit, M. 214–18 Innes, Alfred Mitchel 167–86, 189–91, 191n1, 192nn3–6 Innocent IV, Pope 103, 135 Keynes, John Maynard 9; on capitalism 249n15; on nature of money 23n8, 187–91 Krugman, Paul 22n6 Lawson, Clive xiii, 18, 79n32 Lawson, Nigel 253n23 Leamer, Edward 23n6 Leontief, Wally 22n6 Letwin, Oliver 254n25 Leys, Colin 253n24 Lipsey, Richard 22n6 Lorhard, Jacob 21n2 Marshall, Alfred 23n8 Maruyama, Magoroh 211–12, 221n8 Marx, Karl 9, 23, 164n3, 193n8 Mason, Paul 231–2, 243, 247n9, 247–8n10, 254n26 Menger, Carl 23n8 Minsky, Hyman 158 Moore, Michael 253n23 Morgan, Jamie xiii, 191

258  Index of names Nader, Ralph 148n4 Peacock, Mark 182, 191 Player, Stewart 253n24 Posner, Richard A. 121n36, 144 Pratten, Stephen xiii, 220 Redwood, John 254n25 Ricardo, David 23n8 Rotheim, Roy xiii, 191 Rubenstein, Ariel 22n6 Salomon, Aron 121n33, 139–40, 143 Schumpeter, Joseph 191 Searle, John 10, 73; on causal reduction 35–7, 39–41, 198, 200–1, 204–5, 214;

comparisons with author’s approach 32–3; on corporations 77n24, 117n9; debate with Barry Smith 71–2; on emergence 33–5, 43–4; on intentionality 64–5; on language 76n18; on reducibility 35–7, 39–41; on rights and obligations 53; on social facts 113; theory of society 63; theory of speech acts 74n6 Sellars, Wilfred 64 Smith, Adam 23n8 Smith, Barry 71–2 Spencer, Rebecca 145 Van Gogh, Vincent 16–18, 24–5n13–15 Veblen, Thorstein 9, 23n8, 24n11

Index of subjects

Note: Page numbers followed by “n” denote endnotes. absences, fundamental set of 213 absenting 206, 234 acceptance: of collective practices 49; and collective processes 55; generalised 15–16, 51; and social rules 53; use of term 47 account, unit of 156–7, 165n7, 167–8, 188 agency, positioned 60 Amerindians 74n8 antibiotics 247n8 artefacts: in communities 14; horizontal and vertical positioning 100–2; identifying position of individual 67; social identities and positioning of 56, 65–7, 70, 91–2, 129–33; as totalities 13 atomic theory of matter 33–4, 43 atoms, isolated 6–7, 230 bank debt: central 165n6; money as 67–9, 163, 173–4, 177, 188–9; as relation 161 Berkeley Social Ontology Group (BSOG) 10, 73 biases: external 209–10, 214; noncancelling 208–9 Brexit 7, 247n7, 248n13 Bubble Act 1720 107, 120n32, 138–9 business partnerships 89, 91–3, 109; economic function of 96; legal status of 94–5, 97; liability of 136; positioning of 131–2; setting up 119n19; in tax law 97 Café Terrace at Night (Van Gogh) 16–18, 24–5nn13–15

Cambridge Realist Workshop 9, 76n17 Cambridge Social Ontology Group xiii, 9, 73, 250n17 Cape Industries plc 142–3 capital, statement of 95 capitalism: Keynes on 249n15; modern society under 19, 62; money in 67, 70, 169, 186; power relations within 131 care communities 239–45, 250nn18–19, 251–3n22, 254nn25–26, 255n27; see also NHS (National Health Service); Wikipedia cash: causal powers of 78n28; as marker of money 162; nature of 67–70 causal closure 45 causal interactions 40, 90, 201–2, 217, 219 causal mechanisms 148n5 causal powers: of collectivities 218–19; emergent 42, 45–6, 197–8; of higherand lower-level phenomena 199, 219–20; and relational organisation 38, 87; of social phenomena 31, 34; at structural level 73; see also causal reduction causal properties see causal powers causal reduction 35–7, 39–41, 86 116n3; and downward causation 216, 219–20; and dynamics of emergence 203–5, 207–8, 210–11, 214; general validity of 198–202 causality, emergent 40 causation: efficient 38–9, 41, 86, 200 (see also emergent powers, of efficient causation); formal 38,

260  Index of subjects 87, 200, 216, 218; top-down see downward causation characteristic functions 93, 101, 119n23 classification 89, 118–19n17, 119n23 closed systems 6 coherence, organisational 3–4 collective events 55, 63 collective practices 47–9; acceptance by individuals of 49, 51–2, 218–19; causal properties of 73; community-accepted 51–4, 72, 219; divisions of 54; inanimate objects in 66; interrelating 54, 56, 61; normativity of 49–50, 53 (see also norms); positional access to 87; positionality as 57; single individual participating in 76–7n21; social relations as content of 71–2, 228; transformation of 62 collective processes 49, 55 commercial banks 162–3, 164–5n6 commitments see ontological commitments commodity money 162, 181–4, 187, 189, 191, 193n8 commons, the firm as 111, 121n37, 152n21 communities: artefacts as components of 158; collective practices of 49–54; the firm or corporation as 88–101, 104–5, 108–12, 118n12, 114, 136, 146–7; and higher-order emergence 211–12; human interaction within 47–8; incorporation of 103, 108–9; levels of 234–5, 237, 241; membership of 59–61 (see also community participants); monastic 240; positioned 92, 95–6, 98, 109, 131–2; repositioning of 151n15; social positioning within 12–15, 77–8n26, 87–8, 91–2, 129–30; as totality separate from members 104–5 community participants: as agents 145; rights and obligations of 14, 61, 105, 133 Companies Act 1862 121n33, 139 Companies Act 1989 108, 140 consciousness, and reduction 36 cooperative behaviour 63–4 corporate governance 110, 128, 144 corporate law 111 corporate mechanism 126, 128, 140, 142, 146

corporation: community positioned as 93; defined 109; as legal person 58–9, 95, 103–4, 131, 135; limited company as 89, 91, 94; multi- or transnational 112, 123, 125–6, 147–8n2, 253n24; multiple vertical positioning of 101; origins and history of the 106–8, 120n32, 121n33, 137–40; possibility of control over 143–7; profit-seeking 96, 139; suing governments 149n6; tax avoidance by 126–7, 150–1n10; theories of the 85, 128; transferring liability 140–3; transformative action by 238; UK use of term 98; and unincorporated firms 99–100 CPC (Continental Productions Corporation) 142 credit: commercial creation of 163; and debt 68, 161, 173, 175–6 (see also debt relations); ‘good’ 173–4, 176–7; as identical to money see money, credit theory of; legal and technical definition of 167; nature of 167–70, 174, 177, 186–7, 190, 193n8; tokens of 181, 183, 185–6, 193n9 credit money 168, 186–7, 189–91 critical awareness 234, 240–2, 244–5, 251n21, 253n22 critical ethical naturalism 246n2; see also naturalism, ethical criticality 10, 227, 250n17 crowd formation 205–8, 214–18 Cuba, literacy in 208–10, 220n5 curiosity 3, 10, 21–2n4 death duties 105, 120n31, 135 debt: bank see bank debt; ‘good’ 174; legal and technical definition of 167; for payment of tax 176, 182–5, 192n4; in social positioning 17; see also credit debt discharging power 165n7: of credit 172; positioning and credit theories on 168–9, 177–8, 180, 185, 189–90; and successful money 156, 159, 163, 166–7, 187 debt relations: and money 159, 161, 166–7, 171–7, 190; objects as symbols of 68–9, 78–9n30, 182–5 desiring, and value 156–7 digital or information technology 241–2; see also technological change

Index of subjects  261 directors 58, 89, 95, 119n20; authority over corporation 144–5; liability of 105 downward causation 19, 74n9; and the firm 90; and non-recurrent dynamics of emergence 205–6; validity of 198–9, 203, 214–19 dynamics, use of term 220n1 econometrics 9, 22n6, 23n8 economic and financial crises 70, 126 economic forms 231, 242, 254n22 economic policy modelling: agentbased 232, 247n9; failure of 230–2, 249–50n17; and prediction and control 229–31, 248–9n15 economics, modern academic 5–7; communities of resistance to 240; and nature of the firm 110–11; power of mathematical modelling in 7–9, 11, 231; power of mathematical modelling in 249–50n17 (see also economic policy modelling); relation as discipline to social science 20; state of 22–3n6; see also heterodox economics emancipation and emancipatory practice: and #MeToo and Time’s Up campaigns 237; 248n12; as harnessing obstructive forces 238–9; as morally good 226–7, 229; as removing obstacles to flourishing 232–5; technology in 231; women’s suffrage 120, 236–7 emancipatory change see social change, emancipatory/progressive emergence: historical 41; moments of 216; naturalistic conception of 128; and ontological reductionism 35–42, 46; as placeholder 197–9; Searle’s conception contrasted with author’s 33–5; simultaneous of structure and totality 205; social 46, 52, 61, 88; and top-down causation/reconstitutive downward causation 19, 198; use of term 86 emergence, dynamics of 202–3, 214; complex recurrent 211–14; non-recurrent 203–8; simple recurrent 208–11 emergence, processes of 12, 199, 203; organisation in 38–9; repeated 212

emergent organisation 40–4, 65, 75n10, 210; social reality as 52 emergent phenomena 18; higher-level see higher-level emergents emergent powers see emergent properties emergent properties 34, 37; of efficient causation 41, 86, 200, 206; of the firm 132; reducibility of 19, 74–5n10 emergent structures 201, 204–5, 209, 216 emergent totality; causal powers of 19, 38, 86, 199, 206; and relational organisation 12, 209, 211, 216 emergent-order-as-remainder 75n12 English East India Company 106–7, 137–8 entities, meaning of category 44 entropy 41, 204 equilibrium system 44 eudaimonia 226, 229, 234, 237, 244–5, 251n21, 255n28 eudaimonic bubble see care communities eudaimonic principle 251n22 Eurobonds scheme 149n10 evolutionary theory 33 exchange value 157, 161, 164nn2–3, 166, 171, 188 far-from-equilibrium system 44 feedback mechanisms 140 the firm: as abstract universal 113; Coase’s theory of 8, 85, 89, 128, 144; as collection of assets 117n7; as concrete universal 113; defined 98–9, 108–9; economic function of 95–8, 114–15, 132; as legal fiction see legal fiction; as legal person see corporation; legal structure of 93–5; as legally constituted 93–4, 97; modern economic analysis of 8, 116– 17nn6–7; multiple positioning of 101–2; as nexus 117nn9–10; as ontological fiction 85, 99, 102–3, 109; other forms of 120n27, 152n16; ownership of 109–10, 121n35; stakeholders in 110–11, 147; theories of 18, 85; unincorporated 105, 133; see also corporation friendships, as care communities 240–1 function sets 96, 101, 108–9, 131–3

262  Index of subjects gender positioning: and discrimination 50, 235–7; and emancipatory movements see emancipation and emancipatory practice, women’s suffrage giving: in human nature 246–7n5, 247n6, 250n20; unconditional giving 238, 240, 246n5, 250n21, 251n22 gold, as money 157, 178, 181–4, 186, 193n8 good society see eudaimonia Google 147–8n2, 149n7 government money 174–6, 179, 185–6, 191–2n2, 192nn4,6 Grundrisse (Marx) 193n8 heterodox economics 5, 22, 231 higher-level emergents 34; in complex dynamics of emergence 211; historical explanation of 37, 197, 201; irreducibility of 36; and lower-level organisation 38, 45; and self-organisation 202; totality and structure as 216, 219 HMRC (Her Majesty’s Revenue and Customs) 94, 119n19, 150–1n10 holism, methodological 19, 219 horizontal positioning, multiple 100 human actions, transformative 11 human beings: co-development with society 62; commonalities of 226–7; as community members 88, 225; as legal persons 103–4, 114, 119–20n26, 147; ontological features of 225; positioning of 13–17, 55–9, 62, 67; pre-existing relations between 209; see also human persons human flourishing or wellbeing 226–7; and capitalism 131; and care communities 243; and individual wellbeing 229; removing obstacles to 233–9, 244–5, 255n27; and social phenomena 10; see also emancipation and emancipatory practice human individuals see human beings human interactions 18; collective practices as coordinating 48–9, 52; generalised features of experience 33; nature of 47; as object of social science 31; and social relations 57 human nature 226–7, 229, 245 human persons 99, 114, 225–6, 245–6n1; see also individuals

human rights 113, 141–2, 146 identification, symbolic 67, 70 inanimate objects see artefacts inauthenticity 227, 245, 246n3 incorporation 58, 85, 98–9, 114, 120n29, 152n18; benefits of 105–6, 135–6 (see also limited liability; ownership claims); certificate of 108; process of 93, 98–9, 133, 137; as social positioning see social positioning Independent Social Research Foundation (ISRF) xiii, 74, 115, 147 individual practices 11, 51–2, 62–3, 218, 227 individualism, methodological 19, 219 intentionality 32, 63–5 investor-state dispute settlement (ISDS) 148–9n6 irreducibility, ontological 34–6 irreversibility, principle of 215 Joint Stock Companies Act 1844 108, 120n32, 139 juridical person 102, 104, 109, 112, 114, 135, 146–7 knowledge: common 64; objects of 71–2 language: and collective practices 53; as emergent 116n4; and human wellbeing 226; organising structure of 217 Lausanne Social Ontology Group 220 law and economics movement 121n36, 144 legal entities, creation of novel 58–9, 61, 67 legal fiction 85, 98, 102–3, 109, 112, 117n9, 119n25, 133–4, 146, 151n14 legal person 114; firm or corporation as 85, 102–6, 112, 134–5, 141, 146; history of status 106–8, 137; individual as 147; and juridical person 104; monastery as 103, 135; not-for profit entities as 151n15 legal personality 104, 108 legal structures 93–7, 108 legal tender laws 68, 158–61, 166; and commodity money 182–3; and credit theory of money 177–80, 185; Innes

Index of subjects  263 on 192n6; and primitive law of commerce 172 liabilities, transferring 141 limited company see corporation limited liability 58, 105–6, 117n9, 120nn28,32, 135–6; and criminal activity 142–3; in UK law 108, 139 liquidity: as emergent feature 37, 40, 201, 204–5; store of see value, liquidity/liquid store of lower-level phenomena: causal powers of 37; as components of higher-level entities 199; organisation of 34, 38, 41–2, 45–6 Maryland, tobacco money in 162, 181 mathematical modelling 5–9, 22, 229–30, 249n17; see also economic policy modelling “Me Too” movement 237, 248n12 media outlets, positions of power in 77n23 Modern Money Theory 166, 193n7 money: accumulation of 67, 186, 238, 242–3, 251n21; canonical functions of 165n7; credit theory of 164, 166–72, 175–7, 180–4, 188–91; debt discharging powers of 159; economists on nature of 23n8; and electronic bank records 69, 162; as general means of payment 171–2; Innes on see money, credit theory of; and IOU documents 68–9, 162; Keynes on 187–91; as legal tender 68 (see also legal tender laws); markers of 151n13, 162; Marx on 164n3, 193n8; nature of 8, 23n8, 151n13, 155, 163, 166; as ontological focus of traditional economics 8, 26; as positioned bank debt 67, 69–70, 161–2; as positioned commodities see commodity money (see also tobacco, as commodity money); positioning theory of 155–6, 163–4, 166–9, 174, 186–91; purchasing power of see purchasing powers; stability of 176; standard form of 179; statebacked see government money; successfully functioning 156, 159–61, 163, 166–7; see also cash money proper 155–6, 162, 187, 189–90 moral realism 246n2

morphogenesis 46, 199, 202–14, 216, 220 Morphogenic Workshop 147 NAAC (North American Asbestos Corporation) 142 National Health Service see NHS (National Health Service) natural persons 104–6 natural selection 211 naturalism: and emergence 41, 45–6; ethical 246n2; ontological 32–7, 63, 65; and quasi-natural entities 71–2 nature, use of term 164n1; see also human nature negative power 72, 77n22 neoclassical economics 9, 23n8 NHS (National Health Service): as care community 240, 242–3, 251–3n22, 255n27; threatened dismantling of 253–4nn23–5 non-dualism 32–4 norms 49–50; and community status 60; and social rules 53 North Carolina, tobacco money in 162, 181 not-for-profit entities, as corporations 106–7, 137 obligations see rights and obligations ontological commitments xi, 5, 8–9 ontological conceptions xii, 7, 19, 65, 99 ontological elaboration 86, 114–15, 128 ontological fiction 85, 99, 102–3, 109 ontological inconsistencies 23 ontological insight 4, 22n5 ontological neglect xi, 5 ontological presuppositions 6, 9, 115 ontological reasoning 4, 6–7, 9–10 ontological reductionism 36–7, 39–41, 86, 201–2 ontological turn xii ontology: atomistic 6; defined 21n2; earliest use of term 21n2; and modern economics 8–9; see also scientific ontology; social ontology order, emergent 41, 198, 208 organisation: of components and totality 38; emergent forms of see emergent organisation; the firm as 89; levels of 79, 213, 218 organisational forms 90, 111–12, 118nn15–16

264  Index of subjects organisational stability 44–5 organisational structure: causal contribution of 200; emergent 207, 216; individuals interacting with 217–18 organisation-in-process 46, 52, 61, 63, 65, 73 organising structures 3; causal role of 201–2; emergent 38–41, 205, 216–17; of the firm 88, 90 ownership: as community practice 57; deeds of 56, 70; nature of 109–10 ownership claims 105, 136; see also shares particles, elementary 42–4, 75n13, 151n11 passports, as positioned objects 56, 65, 67, 70 path dependency 52 patriarchy 234, 242 physics 10, 18, 20, 24n11, 41–4, 75n15 position, use of term 55–6 positional identities 60, 87, 91 positional powers 16, 56–9; of communities 219; and community subgroups 60; distribution of 65; emergence of structure 72 postcapitalism 231, 254n26 power: objects allowing accumulation of 70; pursuit of 57–9 power relations 15, 57–9, 61, 77n24, 129, 131 preconceptions xi, 6, 9, 183 predictive failure 7, 247n7 primitive law of commerce 172–3 profit functions 8 profits: definition of 23n7; firm’s distribution of 94–5; as goal of global economic system 234; of multinationals in UK 147–8n2, 149–50n10; as purpose of firm or corporation 96, 99, 106–8, 114, 137, 140, 144 progressive change see social change, emancipatory/progressive property relations 57, 71 property rights 57, 67, 127, 147 purchasing powers 156; of credit 172; and successful money 159–61, 163, 165n7, 166–7, 187, 189 quantum theory 42–3, 75–6nn14–15, 151n11, 205 quarks 42, 151n11

quasi-abstract entities 71 queuing 15, 48, 51, 207–8 racism 234 reduction: Searle’s account contrasted with author’s 35–6; synchronic and diachronic 36–42; see also causal reduction; ontological reductionism reflexivity 203, 206 relational organisation: and causal powers 219; of community 87, 99; of crowds 208, 217; as emergent 117n8; of lower-level components 38, 40–1, 46, 214, 216; and totality 86, 89 relational structures see relational organisation relationality 15, 229 resistance, communities of see care communities rights and obligations: attached to artefacts 130, 132, 158; causal properties of 73; and collective practices 49–54; of corporations 103– 6, 109, 112–14, 131–2, 135–7, 141–2, 146; in crowd formation 207, 217–18; disputes over 72; as forms of power 57; and legal structure 94; matched pairs of 15–16, 129, 158–9, 228–9; and money 151n13, 163, 166, 168, 186; positional 14–17, 55–6, 58–60, 62–3, 67, 70, 87, 112, 235, 250n18; as powers 77n22; and social structure 61, 228; of special purpose entities 119n23; and trust 16; within communities 89–90; see also human rights Roman Catholic Church 236 scientific ontology 18 self-organization 202, 215 sexual harassment 237, 248n12 share capital 58, 95 shareholder primacy model 111 shareholders 58; as community members 95; company’s responsibility to 142, 144–5, 148n2; liability of 105, 120n28, 135–6, 139, 142, 152n17; and other stakeholders 110–11 shares: and incorporation 105–6, 135–6; speculation on 138–9; treasury 141 snowflakes, processes of formation of 210, 221n7 social binding 15 social change 19; appropriate level of 234–9; emancipatory/progressive

Index of subjects  265 xiv, 114, 225, 232, 245; mechanisms of 125, 128, 130–1 social conventions 48 social domain see social reality social emergents 35, 112, 129 social identities 55–7, 65, 114, 129–30 social kinds 159 social morphogenesis xiii, 10 social objects, inanimate 35 social ontology 3; and academic economics 9–10, 20; conception defended by author 33, 65, 225; concern of early economists 9; defined 32; evolutionary 9, 33; and the firm 85–6; general conception of 18; neglected in academy xii, 32; reasons to pursue 10, 20; Searle’s approach contrasted with author’s 32–3; and social change 225; sociophilosophical and socio-scientific 11; subject matter of xi social position see social positioning social positioning: adequacy of 13; basic principles of xii, 11; and community acceptance 47, 56, 63; consequences of 158; development of theory 19–20; gender as 73, 100, 235–7; impact on social structures 228; incorporation as 101–2, 104–5, 109, 132, 146; legal 93; mistakes in 159–60; and money 156, 189; multiple 100–1, 132; rights and obligations in 15, 18; and social change 130–1, 235; theory of 12–13, 87, 128–30, 155; see also horizontal positioning, multiple; vertical positioning, multiple social processes 20, 206 social reality: collective practices comprising 61–3; defined 3, 86, 128; and emergence 47, 52, 198, 203; mathematical modelling of 5; and non-social material 31–2; processual nature of 6–7, 10–12; reproduction and transformation of 227–9, 233–4; and social positioning 15–16, 18, 73, 225; and trust 50; Veblen on 23n8 social relations 34–5, 56–7; constitutive 12; as objects of knowledge 71; as processual 61; rights and obligations as 15–16, 59, 87, 228 social responsibility, corporate 117, 145 social rules 53–4, 61, 76nn19–20 social science: object of study 31–2, 46–7, 72–3; relative autonomy of 34, 70, 74n5; unity of 20

social structure 4, 61–2; causal influence of 221n10; of crowds 207–8; emergent 63; reproduction of 227–9, 232–3 social totalities: communities or artefacts as 13–14; emergent 19, 117n9; relational binding of 15–16 social transformation 230, 232–4 social world see social reality sole traders 89, 91–7, 105, 109, 119n19 South Sea Bubble 107, 138 special purpose entity 119n23 Starbucks 147–8n2, 149n7 strong emergence 36, 43, 45–6 subcommunities 77n25: as care communities 240, 242–3; introducing rules 53; and positional powers 60, 88; practices belonging to 54 subsidiaries, multiple levels of 126–7, 136, 140–3 substantive enquiry xii surface tension 204–6, 214 system features, causally emergent 39–40, 201–2 system incompleteness 213 tax law 96–7, 119n18 taxation: corporate avoidance of 126–7, 147–8n2, 150–1n10; on corporations 94–5, 112, 140–1, 149n7; and money 159–60, 176 technological change 130–1, 242, 247n8, 250–1n21, 255n28 thermodynamics, laws of 41, 198, 204–5 tobacco: as commodity money 162, 181–4, 186; lawsuits by companies 149n10 totality: communities as see social totalities; emergent phenomena as see emergent totality; novel 12, 88; use of term 86 transfer pricing 112, 126–7 transnational negative forces 234–5, 237 transparency, as emergent feature 40, 201 A Treatise on Money (Keynes) 187 trust: and community 16–17, 50, 87–8, 90, 112, 118n16; and debt relations 173–4; in money 160–3, 166, 169, 186–7; norms of 246n4 ultra vires, doctrine of 106–8, 137–8, 140 unincorporated associations 96–7

266  Index of subjects value: liquidity/liquid store of 160–1, 163, 166, 174, 186, 190; Marx’s theory of 164n3; as ontological focus of traditional economics 23n8; payment value 157; shared 112; unit of 156–7 value accounting 156, 163, 167, 171 variables, dependent and independent 7, 230

VAT (value added tax) 94, 127, 149n9 vertical positioning, multiple 101, 132 Virginia, tobacco money in 162, 181 wagon trains 212, 221n8 warfare 16, 231, 234, 251n21 Wikipedia, as care community 242–3, 250–1n21