The Future of Futures
Show Less

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.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 6: Financial Markets

Elena Esposito


One can invest in and/or speculate on markets. Investments are generally assumed to generate concrete wealth, while speculations are only concerned with the internal movements of the economy, which are exploited for short-term earnings. Everyone must speculate, because everyone always has to deal with uncertain forecasts and what others do. All transactions that occur in financial markets have a speculative side (section 1). Finance is becoming increasingly important in the economy as a whole. This importance is worrisome because finance is often seen as a kingdom of gambling and unreasonableness that cannot be controlled or even understood (section 2). More and more sophisticated financial techniques have been developed. These techniques do not make markets more efficient, but, on the contrary, produce new forms of irrationality. It seems that the most rational behaviour runs counter to the current idea of rationality and orients itself to what others think and do, thereby exploiting trends for one’s own benefit. The movements of markets always produce new uncertainty and new risks, to which one reacts by trying to protect oneself. Markets distribute risks, but this makes them even more dangerous given that no one feels responsible for them and one often loses sight of them. Hedging is observed and exploited by others, thereby producing new risks for both the single operator and for the market as a whole (section 3). In the dynamics of financial markets, computers are essential. They accelerate processes to create a condition of virtual contemporaneity where effects are produced simultaneously...

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

or login to access all content.