On Guala’s Money as an Institution and Money as an Object

2024-1 Social Ontology

 

On Guala’s Money as an Institution and Money as an Object

 

Summary

In his paper, Guala aims to show that “our ordinary ways to conceptualize the social world do not lead to formulate explanatorily powerful theories or generalizations” (Guala 2020: 267). According to him, the clash between two incompatible intuitions is the origin of philosophical paradoxes. However, the intuitions that come from folk or ordinary ontology should not be confused with those that constitute real philosophical puzzles; rather, they constitute a pseudo-problem. Several puzzles about money are paradigmatic cases where folk intuition (money-as-an-object) comes into play. The problem should be resolved by replacing such a conception with the correct one (money-as-an-institution).

He claims that “[c]oins and paper bills are possible instantiations of money, but they are neither the most common nor the most significant ones, for economic purposes.” (Guala 2020: 267). What is central to serving economic purposes and illuminating what money is, is that money is a functional institution intended to solve the specific problems―the ‘problem of double coincidence of wants,’ ‘the problem of imperfect commitment,’ etc. Since “what really matters is liquidity, namely, the degree to which assets may be useful in facilitating transactions, […] [t]hings can be used as money more or less frequently and effectively, that is, liquidity comes in degrees” (Guala 2020: 270). This implies that money does not even have to be an object at all. “Money-as an-object is just an institutional device among many” (Guala 2020: 271). Such a folk conception is not fundamental to understanding what money is.

According to Guala, “[d]efinitions in terms of functions (what X does) rather than structural properties (what X is made of) are typical of institutions” (Guala 2020: 271). And what makes them possible are rules that people are motivated to follow, formulated as “When you are in C, use X to do Y.” (Guala 2020: 272-273).

 

Discussion Questions

1.       Is his distinction between folk ontology and real ontology plausible? For instance, the conception of money-as-an-institution, understood in terms of rules and functions, is well-suited to our folk intuition and perhaps is well-justified by it.

2.       Guala criticizes Searle by arguing that “one thing is to say that money-as-an-institution must not be confused with money-as-an-object; quite another is to say that the former is ontologically primary or more fundamental” (Guala 2020: 274). Has Searle ever indeed dismissed these two claims? Is there any reason to believe that Searle’s position is incompatible with them?

3.       Guala claims that the rules constituting an institution are, by nature, merely advisory. “The main reason why French people drive on the right is not because they want to avoid a fine, but because they want to avoid car accidents” (Guala 2020: 272). However, this does not hold true when considering institutions like marriage. For instance, some rules, such as “same-sex marriage is prohibited,” are not merely advisory but regulatory.

4.       Similarly, Guala's analysis fails to adequately capture the frequent conflicts between the interests of the state that enacts the rules and the interests of individuals who are required to follow them.

 

References

Guala, Francesco. (2020) Money as an Institution and Money as an Object" Journal of Social Ontology, vol. 6, no. 2, pp. 265-279.