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 7: Paper Finance and the Relationship to the World

Elena Esposito


What has changed in finance over the last decades? Do technological innovation and the launch of the ‘new economy’, with all their promises and threats, really mark a transition to a completely different financial world? Or are they only further developments of speculation and credit as we have known them for centuries? Perhaps this question is difficult to answer because we do not really understand what is happening. It might be useful to use time as a reference. In financial markets, the future is produced using expectations about the future, in a circularity where one loses sight of the difference between reality and illusion (section 1). Finance seems to deal only with abstractions and flimsy entities, neglecting the concrete reality of goods, production and wealth consumption. As in other areas of society, however, with respect to the economy, one should abandon the idea that observation and reality are separate, and consider how the descriptions of the world change the world described. This breakthrough, which goes under the name of constructivism in science and performativity here, starts from observers observing the world and each other, and tries to describe the resulting reality (a reality made up of objects and observations, which observe objects and are sometimes themselves observed, observe others and the way others observe them) (section 2). This flexible and non-univocal reality is related to the structure of contemporary society, which refers to an image of reality that corresponds to the categories and criteria of the area at stake in...

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