The Future of Futures

The Future of Futures

The Time of Money in Financing and Society

Elena Esposito

This book reconstructs the dynamics of economics, beginning explicitly with the role and the relevance of time: money uses the future in order to generate present wealth. Financial markets sell and buy risk, thereby binding the future. Elena Esposito explains that complex risk management techniques of structured finance produce new and uncontrolled risks because they use a simplified idea of the future, failing to account for how the future reacts to attempts at controlling it. During the recent financial crisis, the future had already been used (through securitizations, derivatives and other tools) to the extent that we had many futures, but no open future available.

Chapter 13: The Crisis – Regulation

Elena Esposito

Subjects: economics and finance, economic psychology, financial economics and regulation, social policy and sociology, sociology and sociological theory

Extract

The crisis developed as a financial crisis. It had very unclear links to the concrete availability of goods – that is, with the real economy. How and when does the loss of money become a loss of wealth (section 1)? The issue is far from easy. The fear of recession, affecting expectations before they had even become realized, spread quickly. The attempts to counter the crisis had to operate off of expectations, knowing that these would change as a consequence of their announced actions. The opacity of the techniques of structured finance makes the interventions on the crisis opaque. Aid should have come from the policy but, in its relationship to the economy, we find the same circularity. The two areas depend on each other and yet cannot determine each other. Political intervention cannot produce wealth, even if it has effects on markets. Markets cannot decide about the intervention, although they can react to it as they see fit. However, markets do require public regulation in order to have a reference from which to start (section 2). Can one still exercise control? Cybernetics uses a far more flexible conception of control, one that refers to unpredictable situations. It originated in the design of computers (section 3). Control, in this sense (one can speak of ‘steering’), does not mean achieving a purpose because one cannot know what will be needed tomorrow. However, it does refer to the ability to connect what happens to one’s behaviour and to decide differently on the basis...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information