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 9: The Production of the Future

Elena Esposito


If financial markets have become markets of the observation of observers and time, and derivatives are tools for buying and selling risk, how does finance change with the spread of derivatives? Derivatives make money work differently. They allow one to buy and sell assets without owning them. They are a new form of money independent of the property of the exchanged objects (section 1). Property reassures about the future because it warrants that one will enjoy a good, even if others might want that good. Money extends this assurance to different goods in the sense that to have money means to have future property. Derivatives let this safety about the future, which they sell and exchange, circulate, without linking it to the property of the goods (or any other property). They deal with safety and uncertainty. If one deals with future uncertainty, however, one actually deals with the future, and does so with very complex and formalized techniques that allow for a picture of the future and its possibilities to be negotiated in the present. However, when these forecasts are correct, the future comes about differently because it reacts to these very forecasts. The real future is different from the expected future and holds surprises, even, and especially, for those who have tried to prepare themselves for the various possibilities (section 2). What is the advantage of such trades? Derivatives increase the liquidity of markets – that is, the available future. The number of possibilities to be conceived and dealt with...

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