The generative problem

Hodgson defines an individual rule as a disposition or an injunction of the form ‘in circumstance x do y’. This definition has the advantage of simplicity. However, the definition is stated as a ‘general form’ (for example, Reference Hodgson1988: 185) rather than as a first step simplification and there can be a difference between the two. A simplification need not be a general form. It can be a single form of several forms that could also be specified as a taxonomic range. This is important because there is a great deal of ambiguity in terms of the concept of a single rule and the existence of a system of rules. One can make the analytical distinction between a single rule and a system of rules and this can be easily illustrated by naming a single rule as an example, but there remain practical problems.

There is an initial generative problem of how single rules of the general form ‘in circumstance x do y’ act as a system of rules. There is always a danger of an overly literal approach to these single rules. This would give the impression that the general form simply aggregated to a system that functioned like a chain of basic algorithms or computer program of defaults. In circumstance x do y, stop, in circumstance a do b, stop, etc. This would be an inappropriate understanding of the way rules fit together, given that rules are cross-referenced, tendential, interpretive (and diversely so), normatively cross-cut, and in constant inter-play with habit.Footnote ¹³ It would lend itself to a rational choice and behaviouristic account (see Vanberg, Reference Vanberg2007). It would be one in which the complexity, actual fuzziness, and integrated nature of rules as real systems would be problematic.Footnote ¹⁴ Clearly, Hodgson would not be sympathetic to a simple algorithmic approach of this kind to rules.Footnote ¹⁵ As the above indicates, it would be antithetical to the very basis of OIE. Nonetheless, it is a potential problem deriving from the concept of a single rule, as is. If the concept is a guideline, in seeking this general form of rule would one be missing some aspects of the complexity of the institution as a system of rules?

Searle on rules

Part of the problem here begins with Searle's account of rules on which Hodgson draws (e.g. Reference Hodgson2004: 14). Searle categorizes rules into two varieties (Searle, Reference Searle1969: 33–38, Reference Searle1995: 43–51, Reference Searle1999: 122–124). Regulative rules influence antecedent or independently existing forms of behaviour – for example, the side of the road on which one should drive. Regulative rules have the general form ‘if y do x’. Constitutive rules are basic elements that define a realm of social activity, making it what it is. Breaking them is usually taken to mean that one is failing to engage in that activity. The archetypal example is playing a formal game. One is either conforming to the rules of chess or one is not. For Searle, the general form of a constitutive rule is ‘x counts as y in context c’. The y is the significance or meaning that is added to the act x in context c by the constitutive rule it embodies and by its place in the rule system. For example, when playing chess placing an unimpeded chess piece in alignment with the opposing king along a trajectory of the piece's allowed movement counts as ‘check’ (and this is chess that is being appropriately played). Constitutive rules operate through designating a status to the activity they define that brings something into existence.

Searle's account of rules was first put forward in Speech Acts in order to establish that language had a performative role. Following Austin (Reference Austin1961: 56–62), he sought to show how meaning and reference involved more than simply ostensive acts of simple object identification. Language did not just make truth claims about an independent material world. Language played a primary role in building an institutional world within a material world: a place of institutional facts. The mastery of a language is also the mastery of its rules or ‘linguistic characterizations’. Institutional facts (counts as y) could be produced by illocution as a rule governed act, for example marriage. In his later work, The Construction of Social Reality (Reference Searle1969), Searle generalizes this prior work on the philosophy of language to develop a philosophy of society. For Searle, social reality is the interplay between constitutive rules, a collective intentionality, or recognition that gives life to those rules as real institutions, and an individual intentionality through which agency engages those institutions through their assigned functions. Here, his original work on language and rules become part of a general solution to the agency-structure problem in social science (providing a continuous ontology of the material and social world). It is in this context that his work has had a clear appeal as a conceptual resource for OIE (see particularly Hodgson, Reference Hodgson2004).

However, though Searle's work was a major step forward in our philosophical understanding of ordinary language, rules, and institutional facts, it has been widely critiqued (Rust, Reference Rust2006). A main current of critique has been that it is a curiously unsociological account of society (e.g. Hollis, Reference Hollis1996). It was so to speak never ‘operationalized’ and the degree to which it could be so remained in doubt.Footnote ¹⁶ One issue here is a starkness in the original definitions that stands in tension to the complexity of the manifestations of rules. This complexity takes two forms. First, as Searle notes, there is some degree of blurring between constitutive and regulative rules in any given instance, because any domain in which regulative rules operate likely includes some change in designated status based on constitutive rules that affects the situation. For example, driving on the wrong side of the road is liable to result in prosecution and might result in a criminal record. Second, there is some degree of blurring over the degree to which constitutive rules are descriptive (in virtue of designating status that brings something into existence) and the degree to which both individual constitutive and individual regulative rules operate within systems. Systems of rules frequently allow for choices that make sense in terms of the relation of the individual rule within the system of rules. A single constitutive rule describes what is done, but does not reflect the relation of that rule to the system of rules that constitute the individuated constitution. Moreover, neither the stated form of a constitutive nor regulative rule gives a sense of the relation of the rule to the possibility of choice between rules or within the rule, i.e. its relation to deliberative potential or processes. This is placed outside the rule form in the conduct of the agent. The rule forms as stated are ‘x counts as y in context c’, and ‘if y do x’, combined by Hodgson as ‘in circumstance x do y’. This parsimony invites elaboration in terms of operationalization since it must encompass how a single rule defines something as ‘is’ or ‘done’ in terms of an action as well as giving some sense of its relation to the choice of action or interpretation within the system in regard to further terms such as must, can, should, might, and so forth.

Interestingly, one might argue that heterodox economics has been a field that has actually contributed to showing how Searle's account of social reality might be applied and operationalized (Koepsell and Moss (eds.), Reference Koepsell and Moss2003). For example, The Journal of Economic Methodology (2002, vol. 9.1) published a collection of papers with a focus on Searle (Boehm, Reference Boehm2002). Runde's paper in the collection is of particular note in the context of Hodgson's position on the OIE. Runde explores the relation between individual intention and rational choice models. Following Searle, he argues that individual intention occurs within Networks of intentional states (subject to the components of Searle's ontology of social reality previously stated) and against a Background of ‘capacities, abilities, tendencies, habits, dispositions, taken for granted presuppositions and know-how generally’ (Reference Runde2002: 16). This is in many respects similar to the way Hodgson argues from an OIE position that rational choice should be explained from the point of view of underlying habit rather than that rational choice accounts for an habitual practice as a rational routine (Reference Hodgson1998: 178). It also seems to show clear links to the relevance of conceptualizing particular empirical cases through the role of Polanyi's tacit knowledge (Reference Polanyi1962).Footnote ¹⁷

One might, then, argue that there is a good fit between Searle's philosophy of society and the OIE that tends to support Hodgson's position on the OIE as a different kind of meta-theory. The emphasis on habituation in OIE and the commitment to relevance would seem to have something to contribute to Searle's work as well as drawing on that work. However, acknowledging this, either generally or in some specific way, such as acknowledging that habit plays a vital role in institutions, does not actually address the shared need of both for further clarification on the conceptual form(s) of individual rules within rule systems, i.e. the different ways in which rules might be stated or elaborated and the overall problem of how they are integrated. Background, context, intentionality, etc. are all important considerations. However, they all place the emphasis of elaboration outside of the rule form itself. A taxonomy of single rule forms might then be developed as a form of elaboration here.

Without that elaboration, the definitions of rules as is, which are found in both Hodgson and in Searle's work, function best as a heuristic aid in formal and fixed settings and, relatedly, in institutional research at higher levels of abstraction. This is because these areas have a relatively clear-cut sense of individual rule forms and a relatively coherent sense of the overall system within which rule-following and deliberation occur. However, the more complex and dynamic the system is taken to be, then the more important it becomes to express how single rules operate within a system of rules and the more important it becomes to express how rules themselves allow for issues like deliberation in different ways and to different degrees. Here, it is important to note that rules are not just transient, in the sense that they change through time, but that they can also be fluid, in the sense that they enable different degrees of latitude in their usage.Footnote ¹⁸

The fluidity of rules: practical dynamism and aporia

Once one moves beyond formal games such as chess and institutions investigated at the higher levels of abstraction, one confronts the issue of the complexity, actual fuzziness, and integrated nature of rules as real systems. Rules and rule systems as parts of institutions are not just hazy because they involve habitual practice and are often not reflected upon, they can also be ambiguous in some sense because of what rules can be and the range of phenomena that rules can construct and influence.Footnote ¹⁹ It would be a misinterpretation of constitutive rules to conceive of them as fixed. However, there is a tendency when thinking of rules as concepts to use them in a ceteris paribus way that tends to serve ‘as if’ they were fixed, creating a variety of conflation with the durability and embeddedness of the institution.Footnote ²⁰ This ‘as if’ is often convenient and perfectly acceptable from the point of view that it does not disguise that rules are temporally dynamic. It usually remains a relatively simple matter to acknowledge that rules, constitutive and regulative, are open for renegotiation and/or unintended transformation through time. Chess has evolved. What is money, how it can be used and what it can do (its institutional ‘facticity’) have likewise evolved (for example, broad money M4, etc.). Here, there is a certain sense in which the rules appear fixed at any one point in time and change through steps. ‘In circumstance x do y’ seems fully adequate here because one can have a chain of such statements of specific altered rules through time.Footnote ²¹ However, for the nature of social change to be fully apprehended, one must allow that rules and rule systems are not just transient, they can also be fluid in the sense that their form intrinsically resists closure, at any given time. The more fluid rules and rule systems are, then the greater the need to conceive of them in a way that resists this ceteris paribus and expands the way in which we conceive of rules. Here, one might want to think beyond ‘in circumstance x do y’.

A useful way to begin to think beyond ‘in circumstance x do y’ is to consider how rules have a practical dynamism or space built into their construction or application as well as a constitutive or regulative function.Footnote ²² The practical dynamism is the degree to which a rule is currently fixed, or requiring a strict performance or conformity based upon its relation to the range of performances or illocutionary acts that might be made in its regard. The greater the variety, then the greater the practical dynamism that is built into the rule and the more fluid one might describe the rule. For example, in so far as rules can be conditional, they can be stated in ways where terms ranging from ‘must’ to ‘should’ and ‘can’ are internal to the single rule form. The actual initial form of the rule can thus have implications for the degree to which deliberation is formally entailed and the significance of any deliberation that then occurs. The same would apply to rule systems because rule systems themselves can have characteristics of this kind. There are interesting parallels here with the way Fleetwood attempts to clarify the role of deliberation by mediating between the work of Hodgson and Archer (Fleetwood, Reference Fleetwod2008a). Our point is that the rule itself can have a variety of forms that affect what is encountered by the agent and also what it means to be habituated.Footnote ²³ Fleetwood rightly notes that the concept of habituation is a valid solution to the problem of hyper-deliberation. At the same time, he contends that Hodgson's concept of reconstitutive downward causation can be extended to situations where the social-psychological mechanism in terms of a proximate cause can be one where intention is changed by deliberation (see Hodgson, Reference Hodgson and Fullbrook2002). As such, habit does not become irrelevant, but the relation between habit and choice becomes more nuanced by different causal chains involving different degrees of reflexivity. Fleetwood's aim here is to preserve the uniqueness of the individual whilst recognizing the significance of their role as agents in relation to institutions and structures (see also Fleetwood, Reference Fleetwod2008b). We would contend that within an OIE perspective, extending the variety of the rule form also enables us to come to terms with the variety of conduct of the agent.

Here, practical dynamism might also be an indication of how a rule may be broken, bent, innovated, or transformed. The choice of action may become, for example, a genuinely creative response. One potential way to explore this might be in terms of the concept of aporia. Aporia refers to a state of being ‘at a loss’. In philosophy, it is associated with an issue or situation placed in fundamental doubt by opposing positions. One might use the term, however, to refer to rule forms that are most fluid in that they invite creative responses because of the need to transcend the impasse created by the concatenation of single rule forms within a rule system – since there is no need to assume that a dynamic process of rules results in a coherent system at any one time. A rule system might be one that constructs contradictions in a way that invites counterfactual thinking and thus provokes particular forms of transformative deliberation because of the fluidity of the rules. For example, the recent global financial crisis has indicated several things about some single rule forms and the overall rule system in capital markets. First, different groups using different models of markets applied different single rule forms. Efficient market proponents had different rules of investing than those using technical analysis. Within both there was also a great deal of leeway since strategies and behaviour related to complexities that made the actual rule forms highly conditional (based on notions of degrees of efficiency, mathematics of arbitrage, time lines of complexity, etc.). At the same time, the emergent properties of capital markets deriving from actual outcomes in terms of particular events have highlighted a profound impasse regarding the broader rule system. Given the right conditions, all the behaviours within the system can have negative consequences (Morgan, Reference Morgan2009a, Reference Morgan2009b, Reference Morgan2009c). This has created a context for transformative deliberation regarding reform of capital markets focusing on issues of vulnerability and stability. Aporia has created a moment for genuine change, subject of course to social, cultural, and political factors in negotiating that change.Footnote ²⁴

One important point to keep in mind here is that though constitutive rules can be stated separately, comprehending a constitutive rule seems to require a comprehension of the environment the rules co-construct (the totality, as in a game, though reality is not a game). This, however, does not entail that the rule system always has one mastering position or definitive form fully apprehended and shared by all agents in the way some games do. The attention in the OIE to history, to a position in social relations, and to the psychological breadth of real agents is an important reminder of this. Constitutive rules can co-construct their own fluidity precisely because they can allow for leeway and multiple interpretations and valuations in activity. This is also the case for regulative rules. The degree to which this is so cannot be stated prior to an empirical investigation of the institution and its rule system(s). Thus, the OIE is rightly a meta-theory of guidelines to specific diversity. But for both reasons of consistency and empirical realism, the possibility of fluidity must be more than acknowledged. It must have implications for how we conceive of rules.Footnote ²⁵ The general point regarding fluidity is that it invites one to think of the formal concept of a rule in a way that is more consistent with the variability in rule-following behaviour. This, for example, has been a major issue in ethno-methodology where a great deal of debate has occurred over the relation between the indexicality of rules (their variable expression in context) and what a rule ‘is’ (e.g. Collin, Reference Collin1997: 31).Footnote ²⁶

An important implication here is that it would be problematic to simply assume that reference to ‘in circumstance x’ or ‘in context c’ was sufficient to account for the fluidity of rules. If it were sufficient, this would entail that it was changed circumstances or contexts that accounted for changed actions as constituents in single rules. This, however, would create the impression that any given ‘do y’ followed only from a single correlative circumstance or context. If ‘circumstance x’ did not change but ‘do y’ did, then one has a problem of identifying the rule. One might maintain that differentiating individual intention from the institution within which it occurs and then referring to background or to rules as tendential takes care of this problem. To a degree it does, since it allows that no single rule need always and everywhere be followed even in ‘circumstance x’. However, the acknowledgement points to the failure to follow any single given rule. It does not conceptualize the form that the rule not followed (or bent or innovated, etc.) might have in order for this to occur and in order for individual intention to be assimilated into the evolving institution. As such, the acknowledgement may well sensitize us to transience and perhaps to fluidity but does not fully capture it nor does it fully capture how the form of rules contributes to how rules are integrated. If rules are fluid in that they can, and in many cases do, resist final closure, then this should also be reflected in the general forms by which the rules are stated. This clarification of ambiguity as ambiguity would be a contribution to clarity about a fuzzy world.

Objections: Wittgenstein and the rule-following paradox

Opening up the issue of fluidity in terms of how rules are initially stated can seem to create a new conceptual problem. It risks the counter-argument that fluidity can be pushed to a logical conclusion that puts into doubt the positive reasons for putting forth the need for a conceptual clarification in the first place. One might argue that a fluid rule is not a rule at all because fluidity allows that any activity could be in accordance with the ‘rule’ precisely because rules can be loose. Particularly in the case of instances of aporia, a rule becomes not a rule. Clearly, this is less of a problem when considering narrowly defined formal rule systems, and particularly matters of law and highly codified regulation. There may still be issues raised by codified discretion and matters of authorized interpretation relating to such systems, but convention might be said to wield a greater power of discipline within and upon them.Footnote ²⁷ Fluidity, however, would appear to be a bigger problem as the scope for practical dynamism, and particularly deliberative conduct, expands and as one thinks of the role of the range of individual rules within any complex institution, particularly in its informal aspects.

We would argue, however, that the problem is not one of the philosophical or practical impossibility of encompassing fluidity in the way that rules are conceived. The problem is actually one of coming to terms with the complexity of rules as expressed in both rule-following behaviour and in how rule-following is explored by the researcher. One useful way of illustrating this is the ‘rule-following paradox’ in Wittgenstein's later work. In Philosophical Investigations he states:

This quotation needs some explanation. The basis of the paradox is twofold. First, observing a person's activity will not in itself provide an insight into a definite rule that is being followed. For example, if a person visits their elderly mother in a care home on Monday in week 1, Tuesday in week 2, and Wednesday in week 3, our intuition of a series may cause us to infer a rule that they will visit on Thursday in week 4 and so on. But the rule may be ‘visit Monday to Wednesday on a 3 week cycle’, ‘visit on days when my mother is ill’, ‘visit on days that are set by care staff’, ‘visit on days that coincide with my own shift work’, etc.Footnote ²⁸ Behaviour is an indication of no more than that rules may exist in so far as rules may be being followed. Second, a rule cannot be ‘mentalistic’ in the sense that it exists because it is thought. The nature of a rule is to have consequences. Thus, thinking a rule is not the same as ‘to obey a rule’. The ‘real’ rule is the one that is used and the form(s) it is used in by a critical mass of agents to whom the rule is relevant.

Wittgenstein's point is not an ad absurdum critique of the possibility of rules or a sceptical refutation that rule-following can be identified by the researcher. Rather it is the important insight that there is no such thing as a self-interpreting or self-applying rule. This insight as he explores it in terms of the way we tend to conflate rules with abstractions (as prior mentalistic entities only) or with a series of observations that provokes an anticipated follow-on resonates strongly with common currents in contemporary OIE and with forms of realist methodology. For both Hodgson and realist methodology in general, it would be an actualistic ontological error to equate regularity with rule-following per se (Hodgson, Reference Hodgson2006: 2; Lawson, Reference Lawson1997: 159–170).Footnote ²⁹ Further, it would be a methodological error to establish a correlation and consider this as sufficient in itself either to represent a relation or as a sufficient confirmation of a particular hypothesis of the basis of the correlation, in this case a rule (Pawson and Tilley, Reference Pawson and Tilley1997: 117–121; Downward and Mearman, Reference Downward, Mearman and Downward2003: 119–122).

This may seem like going over old ground, but what Wittgenstein suggests in exploring the rule-following paradox is that rule-following is indicative of how we should appropriately think about rules. The essence of rules must incorporate their practicality. Rather like habit for Hodgson, the reality of rules has an internal–external dynamic (a nexus). Clarifying this ought to contribute to a fuller understanding of what it means in the OIE for humans as social beings to be constituted by their existence within institutions (e.g. Hodgson, Reference Hodgson2006: 6–7). However, highlighting through the rule-following paradox that the essence of rules must incorporate practicality is perhaps all one would want to take from Wittgenstein on this matter since his overall approach to social reality in his later work contains numerous unreconciled tensions: he is inconsistent in his use of the term regularity, he tends to eschew behaviouristic approaches but test concepts in quasi-behaviouristic terms, and he never really gets to grips with the gap between the materiality of reality and his focus on language games – all of which tends to create problems for how he seeks to resolve the implications of his work regarding rules.Footnote ³⁰

What we want to emphasize is that there need not be a philosophical hiatus when one recognizes that any action can appear to be in accordance with a rule. Rather it can be an invitation to accept the empirical and conceptual challenge that rules are in reality fluid to one degree or another. For example, one might consider the different ways in which fluidity might occur in regard of regulative and constitutive rules. Since constitutive rules designate status that brings something into being, the terms of usage and the basis of innovating, bending, and breaking of the rules through ongoing activity might be quite different than where regulative rules predominate.

In methodological terms, we take fluidity to be in accordance with Chick and Dow's (Reference Chick and Dow2005) approach to open systems. All systems have boundaries and connections; otherwise they would not be systems because they would lack some sense of unity or coherence. However, it is the conditions of any given system (the substance and strength of boundaries and inner connections and their partiality) that define the degree to which it is relatively open or relatively closed and this is then expressed in its manifest consequences (and their frequency) through time. Systems exist in a spectrum. Similarly, rules as elements in rule systems and in institutions more broadly also exist in a spectrum of fluidity. This we would contend is more consistent with the OIEs approach to agency and structure where the individual, as an economic agent, is more than simply a social cipher or reified role, either a simple given or socialized homogenous automaton. The fluidity of rules helps to make sense of the notion of historically–socially–culturally situated choice and deliberative conduct (including, for the economic agent, the concept of endogenous preferences that are also embedded in institutions).

Forms of rules as a taxonomic range

The simplest way of approaching the taxonomic range and the significance of mezzo-rules is to work through some possible single rule conceptualizations as progressive modifications from ‘in circumstance x do y’.

‘In circumstance x do y’

may be modified to become:

‘In circumstance x do not do y’.

One might respond that the general form ‘in circumstance x do y’ is still adequate because the modification may imply no more than that the rule followed was ‘in circumstance x do z’. This could as easily be represented by the original ‘in circumstance x do y’ since the alphabetical denotation is essentially arbitrary. However, this response would neglect various possibilities and it is the existence of the possibilities that indicate that the original concept would benefit from modifications that reflect the nuance that ‘do y’ conceals.

First, ‘in circumstance x do not do y’ need not entail any action. There may be no z. The rule may be to do nothing. One might respond that y can be ‘nothing’ and this is certainly the case. Thus ‘in circumstance x do y (nothing)’ might again appear to return us to the original concept. But there is still the case where ‘in circumstance x do not do y’ holds because it is not doing the specifics of y that is significant rather than the generality of doing nothing. ‘Do y’ where y was nothing would not capture this. As such it would not capture the substantive bifurcation of rules based on social relations, such as differentiated gender or caste practices with economic and power consequences. These may be cases of prohibition or exclusion. The rule for Caste A may be ‘in circumstance x do y’ and the rule for Caste B may be in ‘circumstance x do not do y’. The ‘nothing’ only makes sense in terms of the specification of y and this in turn only makes sense in terms of the single rule within the rule system having the general form ‘in circumstance x do not do y’. Here, failing to adequately set out the single rule form would create problems for comprehending the way the rule system was constituted in terms of and expressed through its individual rules as cross-referenced processes. One might say that reflecting the distributive effects of power also entails a distribution of single rule forms to express the way power is manifest through the rule system.

Second, in addition to the absence of any z, it is conceivable that z may be significant within the rule, but not be directly substitutable for y. It may be that one can only adequately capture the rule form by stating ‘in circumstance x do not do y, do z’. This may be for a variety of reasons. For example, one might reformulate the do nothing of the previous ‘in circumstance x do not do y’ as ‘in circumstance x do not do y, do z (nothing)’ since the nothing is a substantive imperative rather than some inconsequential residue. This addition may of course be deemed trivial. However, it becomes less trivial the more substantive and significant ‘do z’ becomes in relation to y. These are instances of ‘in circumstance x do not do y, do z (something)’. A simple example that does not immediately involve the power issues of the previous example is that of the development of sell-by dates and use-by dates and their role in perishable food consumption conventions. Thus one might have the specific form: ‘when bagged salad passes its use-by-date, do not eat the salad, throw it away’. The ‘do not eat’ may appear trivial, but it is the fulcrum for ‘throw it away’. It is only by reflecting upon ‘do not eat, throw it away’ and the normative commitments that are engrained in the entirety of the rule form as a convention that has become habit in many advanced economies that one can build up a critical analysis of the current endogenous preferences that are creating the problem of waste. Understanding waste begins from the significance of ‘do not eat’ and its relation to ‘throw it away’.

One can also return to the example of caste and consider instances where the rule is not based on simple prohibition or exclusion, but the alliance of such with specific imposed practices. Thinking about how caste practices are cross-referenced and distributional is a useful lead into noting that single rule forms reflect different characteristics. For example, comparing the consumption and caste examples one might note that the rule form ‘in circumstance x do not do y, do z’ does not in itself give any indication about the pervasiveness or common applicability of the rule for agents in regard of ‘circumstance x’. The significance of cross-referencing would only be formally expressed in the concept by adding agents as significant elements within the rule form. One might have for example:Footnote ³²

‘In circumstance x do not do y, do z whilst a does y’ (a non-specific time relation rule).

‘In circumstance x do not do y, do z if a does y’ (a conditional potentially correlative relational rule).

‘In circumstance x do not do y, do z because a does y’ (an explanatory but conditional relational rule).

This kind of iteration can quickly begin to appear like a game theory map of tactics and strategy. In so far as it does so, such a map can give the impression that rules are simply a reductive aspect of atomistic individual behaviours. This would give the impression that cross-referencing as expressed in rules was not genuinely relational. As such, it might seem purely intra-subjective, i.e. concerned with tacitly autonomous disembodied and timeless given entities. This, in turn, and as Fullbrook (Reference Fullbrook, Davis, Marciano and Runde2004) has argued, would reproduce the problems of homo economicus, following Walras and in contrast to Smith, which are so deeply engrained in thinking in economics.Footnote ³³ That, however, is not the intention. The intention here is to bring out the different ways in which rules occur. Rules themselves are to be understood as an expressive aspect of the inter-subjectivity of reality. The being of subjects is inter-dependent and one aspect of that being is precisely the way that rules occur. Once specified, such rules are no more or less guidelines than the original ‘in circumstance x do y’ found in OIE. Here, the introduction of a taxonomic range is not an alternative to the concept of habit within OIE, it is about what kinds of rules are being followed and about different levers in any potential codification. As such, the range provides the researcher with a conceptual resource. The existence of that resource is not an invitation to simply construct an abstract model of interactions. Rather the aim is to pursue the significance of the variability of rules in real situations. For example, qualitative research might focus strongly on the do not element of various rules. This ‘do not’ may be entirely latent (a curious habituated silence or block or ‘internal exile’) for the agent in an otherwise consciously followed rule of do z. The agent may be thinking of the rule as ‘in circumstance x do z’ and it may be the researcher who highlights the significance of ‘do not do y’. This creates interesting issues for how one then thinks about conceptualizing rules in regard to habit as understood in OIE. In OIE, rules are always potentially codifiable, but one now has the issue that the rule may already be codified in one way by the agent but may then be recodified by the researcher based on the interaction of habit and rules for the agent. This is an additional way of approaching typical agent–structure interactions and the problem of ‘hermeneutics’.

Methodologically speaking, the modifications so far of the original single rule form are important because they express different characteristics of rule-following behaviour, providing different emphases. One of the things they allow us to do is differentiate between multiplicity of single rule forms and choice as rule-following behaviour. Circumstance x may be common to all agents and what is done may be highly variable because numerous single rule forms follow, particularly for different groups or agents. Each rule, however, may be highly regular in its application. One simple way to address this is to include a further modification of the rule form in terms of the scope of doing. For example:

‘In circumstance x do not do y, do z ₁. . .z_n.’

Again, the formal concept of a single rule begins to look purely algorithmic.Footnote ³⁴ This is particularly so when one thinks of possible further combinations of rule forms based on prohibitions, impositions, varying agents, and degrees of choice. Here, one can quickly appear to be surrendering conceptual simplicity for an untidy complexity. However, if one were to think of the initial rule forms (those stated here and any others that might be reasonably conceived) as elements in real research where they are used to construct a schematic or map of actual rule-following behaviours, the importance of the modifications should now begin to be apparent. Many similar approaches have been undertaken in experimental economics.Footnote ³⁵ What we want to emphasize is that the taxonomic range is indicative of the complexity of rule-following behaviour. It provides a means to show how rules might fit together to work as a system. For example, they may fit together through the distributional characteristics of rules when cross-referenced. In terms of applying an OIE approach, this is a particularly useful exercise when thinking about informal rule systems within institutions.

Mapping on the basis of the taxonomic range set out so far would give some indication of the practicality or active status of rules as real rules. It also allows, when the mapping is diachronic, for forms of change to be tracked, indicating a kind of fluidity of rule systems based on the complexity of the interactions of individual rule forms. This is a particularly useful method for looking at unintended consequences. Moreover, one can use the limits of this taxonomic range as a useful device in thinking about the further characteristics of rules and rule systems in terms of the significance of inter-subjectivity. We have indicated that multiplicity is different than choice. It is also the case that choice can be of different kinds, and thinking about this can bring us closer to a fuller concept of fluidity expressed in the rule form.

Fluidity: mechanistic choice, deliberation and mezzo rules

It is possible to define a given choice or received choice set as part of a rule as we have done in the previous section. In this regard, the use of algebraic notations such as z ₁ . . . z_n are familiar in many branches of economics. However, the focus on formulations such as do z ₁ . . . z_n does not in itself fully capture the concept of choice in rules precisely because it is a predefined configuration or choice set following on in ‘circumstance x’. It appears less deterministic than do z but it is in many ways the same form more complexly stated. This has interesting implications for Chick and Dow's definition of an open system. They argue that it is the conditions of a system rather than its outcomes per se that are significant for defining its degrees of openness or closure (2005). We would add the further caveat that within the conditions one must be careful to assess the characteristics of areas of choice since a system may appear to be irregular in outcome (z ₁ . . . z_n) and in condition (the full rule form do z ₁ . . . z_n) and yet be one that is relatively fixed or fixing of the present from the past. We would note that one must also allow for the choice to do otherwise than the choice set z ₁ . . . z_n, i.e. to refuse the rule or to be creative in its regard (perhaps based on situations of aporia). One can express this by differentiating:

‘In circumstance x choose between doing z ₁ . . . z_n’

and

‘In circumstance x tend to do z ₁ . . . z_n’.

Of course, in terms of the single rule form concept one might argue that the z of do z or one of do z ₁. . .z_n (or the same of y) may be ‘do something new/unexpected’ and as such the rule form may be other than deterministic. It remains the case, however, that the formulation invites us to think deterministically once the rule is in play even where some degree of ‘choice’ is introduced. The form of choice represented in the concept of rules is one that we are likely to think of as mechanistic. It is, therefore, worth differentiating within the rule form between ‘choose between’ and ‘tend’. This is because doing so highlights that there can be a distinction between the latitude within a rule and the capacity of an agent to refuse or reject a given rule. Rule-following remains consistent within an OIE perspective as a tendential activity of agents, but the distinction differentiates between the capacity of the agent and the rule form as the condition within which that capacity occurs. The distinction is one useful way of thinking about fluidity within rules. The distinction is also a useful one in conducting institutional research because it allows one to highlight the degree of constraint (perhaps distributions of power) built into rule forms. Furthermore, the distinction is also useful in our broad understanding of the concept of rules because it reconciles a potential inconsistency in how we understand breaking rules. The distinction helps clarify some aspects of transgressing norms and laws. Many laws and norms that are core aspects of economic activity are of the form ‘In circumstance x choose between doing z ₁ . . . z_n’. If as an agent one tends not to follow them, then they are broken. However, rules of the form ‘In circumstance x tend to do z ₁ . . . z_n’ may be better thought of as bent than broken when an agent exercises her capacities to go beyond them (based on the individual capacity of agents to tend only to follow rules).

Thinking about the difference between ‘choose between’ and ‘tends’ may also give some indication of the difficulty of changing a given rule and rule system. It may, for example, be that a ‘choose between’ rule form slowly degrades into a ‘tends’ and as such becomes increasingly subject to being bent and ultimately transformed. Here we can think about another aspect of fluidity. As noted, one of the main identified problems with Searle's work on rule forms is that it is ‘unsociological’. More broadly, it is under-elaborated in terms of its conception of change. One might, for example, make the point that the approach it fosters is one that seems to be restricted to preconfigurations (choice sets). So far we have suggested that the concept of rules and the idea of practical dynamism or fluidity in and through rules might be approached in terms of how individual rules fit together and in terms of how different individual rule forms can be more or less deterministic even when involving choice. But one might also consider the idea of fluidity in terms of its relation to deliberation as it impinges on the rule form that is then codified.

The key question here is how does one conceptualize the codified rule where there is an interpretation of the rule and a degree of deliberation. As Hodgson puts it: ‘How do people understand and follow rules? We have to explain not only the incentives and disincentives involved, but how people interpret and value them’ (Reference Hodgson2004: 425). In both the OIE and Searle's work, the general rule is left in a convenient simplified form, for example ‘in circumstance x do y’ because the intentional active agent (within and through collective agency effects or recognition) is considered sufficient for an understanding of the issue.Footnote ³⁶ However, we have been at pains to show that the fluidity of rules must be accounted for in the form of the rules. Rules must be in some sense fluid. Otherwise there is a potential disjuncture. One might think of that disjuncture in terms of analogous statements such as ‘a fixed rule that is sometimes followed’, ‘a gene that allows us to ignore our genes’, or ‘all Cretans are liars, said the Cretan’.

One potential way forward here is to look again at the descriptive or status designation aspect of a rule and its relation to deliberative conduct within the rule system (Ransdell, Reference Ransdell1971; Ruben, Reference Ruben1997). Clearly, the constitutive aspect of rules defines the terms of any conduct by creating a context for recognition (even if recognition is subliminal and action is habitual). However, if we think of this constitutional element, it is not just about doing, it is about being. This is inherent in both Searle and Hodgson's approach and is thus not a wholly original point. But it is one we can clarify and bring to the fore by stating it in the rule form more explicitly in order to make sense of interpretation and the valuing of rules. Any individual rule may entail degrees of choice and may apply to some agents (positioned in some ways) but not others. In so far as when that rule is (as it usually is) habituated it is always subject to potential subsequent codification, it follows that all forms of rules allow for varieties of interpretation. Here, one can be simply asking oneself in terms of circumstance x what is y or z or z ₁ . . . z_n that one then does. This is interpretation as simple conscious recognition of the original rule form and (perhaps) the degrees of choice it enables. However, the act of codification or of recodification is also more broadly a question of being. Here Searle's constitutive form ‘x counts as y in c’, or Hodgson's ‘in circumstance x do y,’ can be usefully rephrased as:

‘In circumstance x be y that does z.’

This kind of codification enables the agent to recognize the difference between their institutional location and the role they are undertaking and the act of rule-following itself. As such, it is implicit in a sense of self as an individual able to recognize that she is not reduced to any given role within and through an institution. At the same time, it is a recognition that identity is in some sense shaped by that institution. The very nature of inter-subjectivity is thus highlighted and brought into question. What is my role in a nexus of inter-dependencies? This may seem to recreate the problematic of intra-subjectivity, but can more sympathetically be understood as the unstable dynamics inherent in the question: In what sense do specific processes seek to make me in terms of you, I and we?Footnote ³⁷

The point may seem rather abstruse. But the idea of codification or recodification is rather simple. Rule forms can express a distancing and as such invoke critical awareness in terms of inter-subjectivity. This can extend from highly generalized situations such as ‘be a consumer’ to highly specific ones such as ‘be Tiwari's tenant’. This kind of codification is one that sits beside the way habit links the inside and outside of institutions. The codification links the capacity of human agents to only tend to follow rules and the individual rule form ‘In circumstance x tend to do z ₁ . . . z_n’. It might be thought of as an expression or codification that implies a deliberative process that then perhaps begins the degrading of rules that were previously of the form ‘In circumstance x choose between doing z ₁ . . . z_n’.Footnote ³⁸ As such, we might designate ‘In circumstance x be y that does z’ as a mezzo rule. A mezzo rule is a rule form that operates through a particular kind of interpretive process that adds a ‘deliberative distance’ to other single rule forms. A mezzo rule is more than an expression of one or more of the constitutive elements of the rule system. Since it is a form of codification that facilitates fuller critical awareness of rule-following behaviour, it might be thought of as intrusive within the existing rule system at the same time as it is defining of some aspect of that rule system. It is here that the act of codification itself might intrude a kind of aporia into the rules on the basis that the terms of the rules are stated. This mezzo form encapsulates how the taxonomic range of individual rules can be recodified, creating in turn a taxonomic range of mezzo rules. For example the original form:

‘In circumstance x do not do y, do z because a does y’

becomes

‘In circumstance x do not do y, be c that does z because a does y’,

Here the interpretive process of codification links being and doing, whilst the explanatory and conditional nature of the rule form invites additional interpretation of the terms of ‘because’.Footnote ³⁹ Through such mezzo rules ‘tends’ becomes a potential aspect of the individual rule form as well as a capacity of the agent who otherwise follows rules. Choice begins to mutate into creative responses. As such, the problem of the fluidity of rules, of the practical dynamism of rule-following behaviour, and fluidity, perhaps aporia within and between rules, is potentially clarified and made more consistent with both the methodological framework of OIE and with Searle's underpinning approach to rules in relation to context, intentionality background, and so forth.Footnote ⁴⁰