John Searle, answered from the texts and cited to the page.
The concept is this: a status function is a function that an entity performs not in virtue of its physical structure but in virtue of the collective acceptance or recognition that the entity has a certain status, and that status carries the function with it.1 Let me make the contrast sharp. A knife cuts because of its physical structure — the blade, the edge, the hardness of the steel.
But a dollar bill performs its monetary function for an entirely different reason. The physical structure of the paper is more or less irrelevant, provided only that it meets certain general conditions such as being easy to recognize, easy to transport, and hard to counterfeit.2 What makes it money is that we collectively accept it as money.
Strip away that collective acceptance and you have a piece of paper. Nothing more. The parable I find most useful here is the wall.3 A community builds a wall around its dwellings; the wall performs a boundary function in virtue of its physical structure — it actually stops you. The wall decays until only a line of stones remains. But if the community continues to recognize that line as a boundary, continues to accept that one is not supposed to cross it, then the line of stones performs the same function the wall once performed.
Not because of its physical structure, but because of collective acceptance of its status. That is the decisive move: from the physical to the institutional, from what a thing can do by itself to what a thing can do only because we collectively treat it as having a certain standing. Functions in general are intentionality-relative — they are causes that serve purposes, and purposes come from us, not from mind-independent nature.4
When we say the function of the heart is to pump blood, we are not reading a purpose off nature raw; we are applying our values about life and survival to a biological cause. Status functions are a special class within this broader category. They require collective intentionality both for their initial creation and for their continued existence, and they attach to entities in virtue of an imposed status rather than physical capacity.5
The logical form of the assignment becomes a constitutive rule of the form X counts as Y in context C.6 Such and such a piece of paper counts as a twenty-dollar bill in our society. George W. Bush counts as president of the United States. A particular move counts as a legal knight move in chess. The counts-as formula is what distinguishes institutional reality from social reality in general, and it is the mechanism by which the whole fabric of human civilization — money, marriage, government, property, criminal conviction — gets built.
One clarification I made explicit in Making the Social World (2010) is worth stating here: collective recognition does not mean collective approval.7 Hatred, apathy, even despair are all consistent with recognizing an institution. A citizen who despises the tax system still recognizes it; a prisoner who resents his sentence still recognizes the court's authority.
The recognition that sustains status functions runs all the way from enthusiastic endorsement to grudging acknowledgment that one is simply helpless to do otherwise.
Human beings have the capacity to impose functions on objects, which, unlike sticks, levers, boxes and salt water, cannot perform the function solely in virtue of their physical structure, but only in virtue of a certain form of the collective acceptance of the objects as having a certain sort of status.Freedom and Neurobiology, pp. 86–87
The piece of paper in my hand, unlike the knife in my pocket, does indeed perform a function, but it performs the function not in virtue of its physical structure but in virtue of collective attitudes. The knife has a physical structure that enables it to cut and perform other knife-like functions, but money has no such physical structure. The physical structure is more or less irrelevant, provided only that it meets certain general conditions (such as being easy to recognize as money, easy to transport, hard to counterfeit and so on).Philosophy in a New Century, p. 33
Suppose a community builds a wall around its dwellings. The wall now has a collectively assigned function, which function it can perform in virtue of its structure. But suppose the wall gradually decays until the only thing that is left is a line of stones. But suppose that the people continue to recognize the line of stones as a boundary, they continue to accept that they are not supposed to cross. The line now performs the function that the wall once performed, but it performs the function not in virtue of its physical structure but in virtue of the collective acceptance that the line of stones now has a certain status.Philosophy in a New Century, p. 33
To put the point succinctly, if perhaps too crudely, a function is a cause that serves a purpose. And the purposes have to come from somewhere; in this case, they come from human beings. In this sense, functions are intentionality-relative and therefore mind dependent.Making the Social World, pp. 71–72
Unlike many other functions, they have two special features. First, in the important cases they require our collective intentionality, both for their initial creation and for their continued existence. And second, they are functions that a person or other entity has, not in virtue of physical structure, or at any rate not solely in virtue of physical structure, but in virtue of collective imposition and recognition of a status.Making the Social World, pp. 71–72
I have tried to state the logical form of the assignment of a status function when it becomes regular, and thus a matter of a rule, as that of the constitutive rule of the form, X counts as Y, or more commonly, X counts as Y in context C.Philosophy in a New Century, p. 33
Acceptance, as I construe it, goes all the way from enthusiastic endorsement to grudging acknowledgment, even the acknowledgment that one is simply helpless to do anything about, or reject, the institutions in which one finds oneself... 'recognition' does not imply 'approval.' Hatred, apathy, and even despair are consistent with the recognition of that which one hates, is apathetic toward, and despairs of changing.Making the Social World, p. 20