Pearl has extended SEM from linear to nonparametric models, and proposed causal and counterfactual interpretations of the equations. For example, excluding a variable Z from the arguments of an equation asserts that the dependent variable is independent of interventions on the excluded variable, once we hold constant the remaining arguments. Nonparametric SEMs permit the estimation of total, direct and indirect effects without making any commitment to the form of the equations or to the distributions of the error terms. This extends mediation analysis to systems involving categorical variables in the presence of nonlinear interactions. Bollen and Pearl survey the history of the causal interpretation of SEM and why it has become a source of confusions and controversies.