Entities and Properties (BPC)

Notice that these two categories mutually condition one another. Each term appears in the definition of the other, so they are put side by side in the list at the same level of the hierarchy. The standard way to think about entity and property is that because all properties are properties of entities, entities should come first. That sounds pretty straightforward and true(of the former) —all properties are properties of entities, so entity does condition property. But what we validly designate as an entity is something which has particular properties, so property also conditions entity.

Let's think about a door. A door is an entity. This is to say that it is a distinctly propertied^[2] reality and acts as a unified whole [at the scale-relevant context of its causal efficaciousness]. However, the knob, which is just part of the door, is also an entity in its own right since it also has certain properties and rotates as a whole. The knob is a part of the door’s composition, but composition is not equivalent to identity—composition is not a subsumtive relation as traditionally assumed but is a reciprocal one. In fact, parts are incidental to the identity of the whole, and the whole, vice versa, is incidental to the identity of its parts. An entity's identity is its properties—not its components. (The reciprocity of parts and wholes is of a categorically distinct kind than the reciprocity of entities and their properties; but they are nonetheless both closely linked).

Entities, in this framework, are concieved of as "nested natural units". A door is an entity not because of its hinges or planks or knob but because of its structural-functional reciprocity with other nested natural units—viz., as interpenetrating systems.^[3]

The apt question to entertain the identity-as-composition view is this: Is a house just what's inside the house? At first glance, it seems intuitive to consider a house as merely the sum of its enclosed spaces—the rooms, furniture, walls, floors, and ceilings. But such a view quickly unravels when we realize that the house depends on far more than these internal features to function as a house. Take, for instance, the wall spaces themselves. Are they "inside" the house? Between the drywall and exterior siding, there exist pipes, wires, insulation, and conduits that enable vital functions like water flow, heating, cooling, and electrical power. These components are integral to the house's function as a controlled habitat, yet they are not directly part of the "living space" that one might initially imagine when defining a house’s "inside." Further complicating this picture, these pipes and wires do not stop neatly at the house's exterior. They connect to external systems like municipal water mains, electrical grids, and communication networks. The house’s functional identity depends on these external networks as much as on its internal components. Without them, the house ceases to act as a modern shelter—it cannot light a room, flush a toilet, or maintain a livable temperature.

The idea of limiting the house’s identity to its "inside" fails because what happens "inside" is inherently dependent on what is "outside." Even more troubling, the notion of "inside" becomes ambiguous. Does it include crawl spaces, attics, and basements? Are these part of the house’s "internal" composition? What about the foundation of the house—is it part of the house? A house does not float in the air; its foundation anchors it to the earth, distributing its weight and stabilizing it against winds or earthquakes. But a foundation cannot function without the soil, rock, or other geological structures it rests upon. Do we include the ground beneath as part of the house? If so, where do we draw the line? Does the house extend into the layers of the Earth that bear its foundation? What about the air inside, which flows and exchanges with the external atmosphere? If the house’s interior depends on external systems for ventilation or pressure equilibrium, is the surrounding air also part of the house?

Crucially, we must ask, what "inside" refers to in this context? Does it include the garage, which often serves both as a functional part of the house and as a transitional space to the outside? Do we consider the driveway, which is essential for accessing the house? Or the yard, which is enclosed by fencing that delineates property boundaries but is not "inside" in any traditional sense? These questions illustrate that the idea of "inside" is itself a relational concept, dependent on context and perspective.

You can see different things as entities depending on your perspective (that is, at certain grains of analyses). You can see the entire house as an entity and the door as just part of it. You can see the Earth as an entity going around the sun and the house as only part of that. "So, can you just draw the lines anywhere you want and call anything an entity?" No. What distinguishes an entity is that its properties define how it acts as a whole in relation to other nested natural units. When you're talking about the door you can't exclude the knob as a part since it moves along with the rest of the door. On the other hand, you cannot designate the left side of the door and a layer of air one millimeter above the door as an entity because that set of stuff has no particular properties that would qualify it as an entity. Such a grouping does not act as a whole in relation to other entities. It fails to exhibit any coherent relationship with other nested natural units. The left side of the door and a layer of air do not form a structural whole, cannot move or function together, and do not play any unified role in the house-as-habitat system.

Properties are neither additive nor derivative. They are not something “added” to an entity’s identity, nor do they result from summing the characteristics or activities of its parts. Likewise they do not “emerge” as some novel phenomenon from the complexity of interactions within or between parts. Such phrasing implies an ontological gap between an entity and its properties—such a gap does not exist. They are not external attributes or supplementary characteristics. Instead, an entity's identity is its properties, nothing more, nothing less. Properties are the systematicity and relationality of the entity itself. An entity is defined by what it is, not by what it is made of. This distinction is critical to avoiding the error of reductionism, where parts are assumed to hold causal primacy. There is no "immutable core" or "ultimate units" that makes up reality. Any part itself has parts and when examined closely reveals further nested levels of relationships and complexity; any part is itself inherently complex and possesses some activity peculiar to it (law of causality). The dynamic invariance of a relationship or set of relationships and their reciprocal alignment with other entities(as nested natural units), all manifest as the entity’s properties. These properties persist as long as the relations persist, but they also adapt dynamically to changes (see: Permanency-Change Reciprocity) in the entity’s embedded context.^[4]

What we find in the history of science is that it's helpful to be creative about what you consider to be an entity:

Archimedes identifies a very special entity, which is "a piece of water that would have been there if a boat wasn't." He's treating this piece of water as a separate entity, and it is. It's an entity that ends up being pushed up by the waters below it with the same force that would have pushed up on the boat if the boat was there instead. Since this body of water has a particular property, that property is just somewhat complex—it's being pushed up by the same waters that would have pushed up on the boat—it is valid for Archimedes to identify it as an entity. This perspective allowed Archimedes to think about the force that the surrounding waters exerted on a boat, which caused it to float.

Using this framework to address a famous example given by Heraclitus while rejecting the law of identity (see: A River as an Entity) is fairly instructive. In summary of the foregoing: Heraclitus’s argument erroneously assumes that the identity of a river is derived from its parts, specifically its water. By focusing exclusively on the parts (water), Heraclitus fails to recognize the structural-functional reciprocity of the river with other nested natural units as the true designation of its identity. A river is an entity because its distinctly propertied nature conditions its actions in relation to other entities as a whole. It's flow properties are relational to its headwaters, tributaries, and downstream sedimentation patterns. A river exhibits (dynamic invariance) natural rhythms, such as seasonal flow variations, that persist regardless of the individual water molecules involved. The flow, sediment load, and ability to erode rock are not "attached" to the river; they are what the river is. Without these properties, the river would cease to be. Because properties are inseparable from entities, they do not have any independent existence. While parts are, for the most part, able to be seperated, replaced, and broken down further. An entity’s properties are what it is, not something external or supplementary. Entities (as nested natural units) are coherent at every scale without subsuming one scale under or into another.

To illustrate further why arbitrary designations fail: a car is an entity as it is distinctly propertied such as to enable mobility, energy conversion, and passenger transport, which depend on the structural-functional repricoity both among its parts and a mutually compatable driving-terrain. However, you cannot designate "the steering wheel and the left rear tire" as a separate entity because this grouping is not distinctly propertied such as to enable it to act as a whole. The steering wheel cannot direct movement without the rest of the car's systems, and the tire cannot move independently of the vehicle's integration in relation to the terrain.

For something to qualify as an entity, it must be distinctly propertied and act as a unified whole at the scale-relevant context of its causal efficaciousness. This means the designation of an entity (as a nested natural unit) depends on the appropriate degrees of freedom (DoF) necessary to describe the system’s behavior.

In the house system some of the relevant degrees of freedom include the division of rooms, access points (doors, windows), and thermal or acoustic insulation. The door is a key degree of freedom, as it regulates access and environmental separations—a door, as a whole, is distinctly propertied such as to enable resistance to environmental factors (like drafts or noise). Its functional role cannot be reduced to the parts of the door (e.g., hinges, knob) when considered at the level of the house system. The knob, while essential at finer grains of analyses, is not functionally relevant at this level of differentiation. The concept of DoFs becomes clearer when examining the nested nature of systems:

Zoom in and we can treat the door itself as a system with its own DoFs: rotation around hinges, alignment within the frame, locking mechanism engagement, deformation under pressure, etc. These parameters describe how the door operates. But zoom out to the level of the house system and the door is a structural-functional unit influencing higher order degrees of freedom, such as thermal exchange, regulating airflow, and access dynamics. At this scale, the course-grained functionality of the door as a unified entity is more relevant than its components. A knob's fine-grained functionality is relevant only when considering the door’s operation as a subsystem, not the house as a whole. The door and knob are nested components in the house’s structural-functional reciprocity. The knob’s properties are distinct from the door’s, but they reciprocally align to support the door’s role within the constraints of the house system. These entities are each, in turn, uniquely nested within the broader human ecosystem—where the house's properties such as insulation and sheltering capacity enable it to facilitate the distinctly human ways of life.

At no level do entities lose their distinctness. A door remains a door, even as it influences and aligns to the constraints of higher ordered system like the house. Similarly, a river remains a river, even as it flows into the ocean and participates in global hydrological cycles. The nested nature of these systems highlights the principle that: entities are defined by their structural-functional reciprocity with other nested natural units. Not by reductionist or arbitrary designation.

^[5]

Zooming further out to the level of the human ecosystem introduces additional degrees of freedom (DoFs) that illustrate the principles of reciprocity in economic systems. Some (not exhaustive of all) relevant degrees of freedom are (1) the arrangement of shelters, (2) flow of resources, (3) the structure of production, and (4) interpersonal relations. At this scale, the house itself is a structural-functional unit, supporting human activity through properties such as insulation, storage capacity, and accessibility. The house’s DoFs influence, and are constrained by higher order socio-environmental systems. A house is such a good example for the broader discussion at hand because it's literally designed to emphasize its embeddedness in higher order systems. A house is both a consumption and capital good. Its personally estimated value stems not merely from its immediate sheltering function but also from its role in supporting future productive activities, such as enabling workers to rest and produce effectively, balancing immediate needs against future production possibilities. The framework of austrian economics, rooted in a causal-realist approach, provides a powerful lens for understanding these dynamics.

(1) Shelters—houses, offices, factories—are not isolated entities but nested natural units of a broader system of human activity: their location, design, and connectivity to larger networks (e.g., transportation, utilities) directly constrain their function and systemic influence; the production of such structures is driven by individuals' preferences like proximity to resources, climatic conditions, community infrastructure—land-use patterns and property markets optimize spatial arrangements, balancing costs like rent and commuting time with benefits like access to economic hubs; a house's functionality relies on integrated networks like power grids and water supply systems, these networks themselves evolve based on entrepreneurial investment, resource allocation, and time-preference—habitation, commerce, and industry (as properties of the human ecosystem) both cause and result from the decentralized coordination of countless individual decisions.

(2) The human ecosystem relies on the efficient allocation of resources to sustain production-consumption: resources are transformed through stages of production, with higher-order goods (e.g., raw materials and capital equipment) ultimately yielding consumer goods over time; time preference conditions how resources are allocated across these stages, impacting the overall structure of production, e.g., lower time preferences lead to higher savings enabling investment in more complex, longer-term production structure, these structures sustain resource flows and enable the creation of goods like houses; prices serve as critical DoFs, signaling the relative scarcity of resources and guiding their allocation; entrepreneurs respond to profit opportunities by reallocating resources toward more valued uses​​; and, at the household level again, resource flows like electricity and water are integral to shelter functionality—these flows are part of larger networks that rely on market processes to coordinate supply-demand.

(3) The structure of production itself also illustrates fairly well how nested natural units across scales align dynamically: entrepreneurs orchestrate resources to satisfy consumer demand, acting as agents of coordination in this structure, e.g., a contractor managing the construction of a house navigates material, tool, and labor prices to adjust production processes accordingly, with adjustments driven dynamically by changes in consumer preferences and resource availability; savings enable capital investment, expanding the production structure and increasing its efficiency, e.g., vertical integration (where a single firm controls multiple production stages) can streamline operations but depends on accurate internal pricing, this exemplifies the point about entities maintaining distinct yet relational identities​​—factories, suppliers, and logistics networks form an integrated system where each entity shapes and is shaped by its structural-functional reciprocity with others, ensuring smooth production flows​. Rothbard’s analysis of stages of production shows how higher-order goods flow into lower-order goods, eventually resulting in consumer satisfaction. This framework illustrates structural-functional reciprocity, where each stage supports, constrains, and depends on others.

(4) The human interactions of the ecosystem exhibit DoFs (viz., a loss of a constraint) underpinned by property rights and voluntary exchange: the division of labor allows individuals to specialize and exchange their produced goods, this specialization increases productivity and aligns with each actor’s comparative advantage; each trade represents a resolution of competing preferences and scarce resources, fostering mutual benefit and wealth creation, even when one individual is more efficient across all tasks, trade benefits both parties if each specializes in their relative strengths; voluntary associations (e.g., insurance firms, trade organizations) operate to reduce transaction costs and provide stability in exchange relations—avoiding potential conflicts over scarce resources; each participant in the market system, by seeking his own interest, seeking to maximize his monetary income, inadvertently expands the productive potential of the entire system, he conditions a loss of constraints on the potential productivity of the all other agents of the system (this novel phrasing ties Economics to Homeokinetics—with the concept of reciprocity—aligning with Rothbard's view of the market as a harmonizing process); individual productivity creates ripple effects and—through accurate price signals—drives systemic efficiency.

The human ecosystem, though largely constructed by humans themselves, is no less a natural system: shelters depend on nature-given resources (e.g., timber, minerals) and must adapt to geographical and climatic constraints; the flow of goods across regions integrates regional systems into a global production network, this integration is facilitated by transcontinental markets and the monetary system, aligning resource allocation with global demand; innovations and philosophical shifts feed back into the system, reshaping DoFs, e.g., the development of renewable energy changes how homes connect to power grids and influences property markets. Likewise, philosophic ideas have profoundly influenced the historical development of human ecosystems: the ascendancy of Platonism, with its disdain for reality, and the subsequent entrenchment of Christianity in the early Middle Ages, led to intellectual stagnation and widespread suffering. In contrast, the reintroduction of Aristotelian thought through Aquinas reinvigorated the West’s philosophical foundations, catalyzing the aesthetic flourishing and scientific inquiry that defined the Renaissance, thereby realigning the human ecosystem’s structure and dynamic potential.