The Future of Futures
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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.
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Chapter 2: Time Binding

Elena Esposito


In this chapter, we shall present the idea of time in sociological systems theory. This idea of time will guide our entire analysis of money and financial markets. The chapter is very abstract, refers to a very complex theory, and involves various issues that we cannot present within the limits of this work. However, it should serve to clarify both how, and why, time can be thought of in a different and unusual way, not only in everyday life, but also in many scientific works, and especially in economics. We begin with a fairly simple remark (presented in section 1): time in itself is never present in its entirety, because it concerns three dimensions (the past, the present and the future) that can never be directly experienced. The past is already gone, the future has not yet arrived, and the present goes by immediately. Nevertheless, time remains a key component of our relationship with the world. We live with expectations and memories, which we need in order to generate projects for the future and to rethink our past experiences. Because it does not exist and, therefore, does not resist our constructions, time gives us great freedom. We must then understand why we use time and what advantages it grants us (section 2). We need time in order to orient ourselves in our activities and in the world. We arrange these activities in an order that connects the past with the future. In this sense, we can see present happenings as...

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