The function of concepts is to condense our vast wealth of knowledge about the real world into manageable units, based on common characteristics. When we say that "X is a human," we implicitly bring to bear upon X an enormous store of information. Concepts such as "human" are therefore indispensable tools for organizing our vast and complex knowledge. If our concepts are to serve this function effectively, enabling us to understand reality objectively, they must be based on something deriving from the nature of reality: they cannot be mere arbitrary invented groupings of units.

One of the most important issues of philosophy—one with which thinkers have struggled for over 2000 years—is the "problem of universals." How can we form concepts of entities that do not seem to be identical in any given attribute? For example, how can we form the concept "human," when there seems to be no characteristic of "human-ness" that is identical from one human to the next, yet absent from non-humans? Even if we say (following Aristotle) that "a human is a rational animal," humans vary considerably from one another in IQ, short- and long-range memory capacity, creativity, and any other measurement that one could apply to rationality—so it would seem that we have still not identified a clear, specific commonality.