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There is a third option of course: the third option being that possibility here refers to physical possibility with not all of the initial conditions fixed. If we wanted to get super rigorous about it, we would have to take a contextualist approach where the exact context of the utterance would determine the modal scope of “can”. But even on a contextualist understanding, the initial conditions of the universe prior to the statement are never meant to be held fixed, because of course they are unknowable.

At best, the argument shows that the determinist can’t interpret the “should implies can” maxim to mean the option 2 understanding for “can”. But there is no reason to assume that they are using the phrase in that manner or even that anyone is (because like I said, no one knows the exact initial conditions of the universe prior to the sentence utterance).

The third option I outlined above is also compatible with the notion of “can used in the sense that is relevant to free will” as Michael uses it.

Since premise 3 is false on the third option, the argument doesn’t go through.

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