IMAGINED FUTURES IMAGINED IMAGINED FUTURES FUTURES Fictional Expectations Fictional Expectations and Capitalist Dynamics and Capitalist Dynamics JENS BECKERT harvard university press Cambridge, Massachusetts London, England 2016 To Annelies and Jasper and the happiness they have brought Copyright © 2016 by the President and Fellows of Harvard College All rights reserved Printed in the United States of Amer i ca First printing Library of Congress Cataloging- in- Publication Data Names: Beckert, Jens, 1967– author. Title: Imagined futures : fi ctional expectations and cap i tal ist dynamics / Jens Beckert. Description: Cambridge, Massachusetts : Harvard University Press, 2016. | Includes bibliographical references and index. Identifi ers: LCCN 2015040447 | ISBN 9780674088825 (alk. paper) Subjects: LCSH: Capitalism. | Economics. | Time and economic reactions. | Economic forecasting. | Decision making— Economic aspects. Classifi cation: LCC HB501 .B37384 2016 | DDC 330.12/2— dc23 LC rec ord available at http:// lccn . loc . gov / 2015040447 CONTENTS Acknowl edgments . .vii 1. Introduction. 1 I. Decision- Making in an Uncertain World 2. The Temporal Order of Capitalism . 21 3. Expectations and Uncertainty. 35 4. Fictional Expectations. 61 II. Building Blocks of Capitalism 5. Money and Credit: The Promise of Future Value . 97 6. Investments: Imaginaries of Profi t . .131 7. Innovation: Imaginaries of Technological Futures . 169 8. Consumption: Value from Meaning . 188 III. Instruments of Imagination 9. Forecasting: Creating the Pres ent . 217 10. Economic Theory: The Crystal Ball of Calculative Devices . .245 11. Conclusion: The Enchanted World of Capitalism . 269 Notes . 287 References . .315 Index . 357 ACKNOWL EDGMENTS MORE THAN thirty years ago Benedict Anderson introduced the term “ imagined communities” to argue that national identities are based on so- cial imaginaries. In this book, I claim that the dynamism of the cap i tal ist economy is in no lesser way based on imaginaries. But this book differs from Anderson’s because it explores imaginaries of the future rather than imaginaries of the pres ent and the past. Furthermore, I focus on the develop- ment of the modern cap i tal ist economy rather than on pro cesses of nation building. Given the complexity of economic relations and the uncertainty of future developments, actors making decisions on investments, innova- tions, credits, or consumption develop imaginaries on how the future will look and how the decisions they make will infl uence outcomes. I call these imaginaries “fi ctional expectations,” and argue that they are a fundamental force fueling the dynamism of modern cap i tal ist economies. I should like to begin by expressing my gratitude to the Institut d’études avancées (IEA) in Paris, where I was a fellow during the 2012–13 academic year. Without the opportunity to focus for almost a whole year on writing this book, I would never even have begun. Many thanks to Gretty Mirdal and Patrice Duran and to the formidable staff at the IEA, in par tic u lar to Marie- Thérèse Cerf, its administrative head. I would also like to thank the other fellows of the IEA, with whom I spent the year in Paris, for sharing their thoughts about my proj ect in both informal conversations and during a seminar. Paris was crucial to this proj ect in many other ways as well. It was in Paris in 2010, in Olivier Favereau’s Economix seminar in Nanterre that I vii viii • Acknowl edgments fi rst presented the ideas from which this book grew. During the writing pro cess, I presented parts of the book in seminars at Sciences Po, the Ecole Normale Superieur, the Ecole des Hautes Etudes en Sciences Sociales, and at the Université Sorbonne Nouvelle Paris 3. I also presented the proj ect on many other occasions beyond Paris: at meetings of the American So cio log- i cal Association in Las Vegas and Denver, the SASE meetings in Madrid and Milan, and at seminars at the Instituto Juan March in Madrid, the University of Leicester, University College Dublin, and Oxford University, to name just a few. I gained vital insights from all of these seminars. The support I received at my home institution, the Max Planck Institute for the Study of Socie ties in Cologne, was equally crucial to the project. Wolfgang Streeck, with whom I co- directed the Max Planck Institute for close to ten years, was a critical source of inspiration. Without his insistence on developing an economic sociology that moves closer to the concerns ad- dressed in po liti cal economy, this book would have looked very differ ent. I also discussed parts of this proj ect in seminars at the institute, in meetings of my research group, and with guest researchers in Cologne. My thanks to all the colleagues and students who, with their comments and questions, helped my thinking during the writing pro cess. Jenny Andersson, Robert Boyer, Benjamin Braun, Richard Bronk, John Campbell, Bruce Carruthers, Christoph Deutschmann, Frank Dobbin, Nigel Dodd, Heiner Ganssmann, Ariane Leendertz, Renate Mayntz, Alfred Reck- endrees, Werner Reichmann, Lyn Spillman, Wolfgang Streeck, Jakob Tanner, Christine Trampusch, and two anonymous reviewers have read the whole manuscript or chapters from it and provided me with invaluable suggestions for revisions. I also benefi ted greatly from conversations with Nina Bandelj, Henri Bergeron, Francesco Boldizioni, Gérald Bronner, Timur Ergen, Ted Fischer, Neil Fligstein, Marion Fourcade, Brooke Harrington, Kieran Healy, Martin Hellwig, Peter Katzenstein, Wolfgang Knöbl, Karin Knorr Cetina, Sebastian Kohl, Patrick LeGalès, Mark Lutter, Fabian Muniesa, Chris- tine Musselin, Claus Offe, Birger Priddat, Werner Rammert, Akos Rona- Tas, Fritz Scharpf, Charles Smith, David Stark, Philipp Steiner, Richard Swedberg, Laurent Thévenot, Cornelia Woll, and Martha Zuber. Many thanks to all of them. Despite many rounds of revision encouraged by the im mensely helpful comments, what Paul Valéry once said about poems rings very true to me: an academic book is never fi nished, only abandoned. Writing a book is not just an intellectual task; it is also an orga nizational undertaking. I am indebted to the many people at the Max Planck Insti- Acknowl edgments • ix tute who helped to make this book pos si ble through their practical and orga nizational support. First of all I would like to thank Christine Claus, who has supported me in all orga nizational matters since I arrived at the institute. She added the endnote references to the chapters of this book, meticulous work that demands attention to detail and mastery of the soft- ware, and patience with its many pitfalls. Heide Haas researched and ed- ited most of the fi gures in the book. I also want to thank the librarians at the Max Planck Institute: Susanne Hilbring and her staff have done a for- midable job obtaining the lit er a ture I needed. My gratitude also extends to the publications department of the Max Planck Institute, in par ticu lar to Ian Edwards, Astrid Dünkelmann, Cynthia Lehmann, and Thomas Pott, who accompanied the manuscript on its journey from my desk to the staff of Har- vard University Press and eventually to the printer. Parts of the fi ndings presented in this book grew out of earlier discus- sions and studies that appeared in an edited volume (Beckert 2011) and in the journals Politics and Society (Beckert 2013a) and Theory and Society (Beckert 2013b). If this book reads well, it is to the merit of Miranda Richmond Mouillot, who did a fantastic job editing the chapters. Ian Malcolm, my editor at Har- vard University Press, has supported the proj ect from the time he heard me mention it in a conversation in Paris in 2012. I would like to thank him for many years of trustful collaboration. Imagined Futures is now the third book proj ect we have worked on together. Paris has not only been impor tant to me as a source of intellectual stim- ulus in recent years; it was also the city where I met Annelies. For me, our relationship and our son, Jasper, embody more than anything else what this book is about: Imagined Futures. This book is dedicated to them. It is certain that a very large part of what we experience in life depends not on the actual circumstances of the moment so much as on the anticipation of future events. — william stanley jevons, The Theory of Po liti cal Economy ONE INTRODUCTION THROUGHOUT MOST of history, the level of economic wealth has changed very little. Only with the onset of the industrial revolution did it begin to ac- celerate, leading to unprece dented levels of economic production and affl u- ence (Figure 1.1). This shift began in a few Eu ro pean countries and in North Amer i ca, but ultimately, over the course of the twentieth century, it spread to almost all regions of the world; today economic and social development across the globe is shaped by the dynamics of capitalism, in the form of growth as well as recurrent economic crises. What explains the extraordi- nary momentum of the cap i tal ist economy? Scholars of capitalism trace the dramatic creation of wealth that began in the late eigh teenth century to a plethora of factors: among them are tech- nological advances, institutional changes, the division of labor, the expansion of trade, commodifi cation pro cesses, competition, exploitation, the increase in production factors, and cultural developments.1 The deep crises capitalism has witnessed again and again are attributed to overaccumulation, regula- tory failure, lack of investment and consumption, psychological factors, and miscalculations of risk.2 As comprehensive as these explanations are, they pay only limited attention to another, no less essential aspect of cap i tal ist dynamics: its temporal order. Changes in temporal orientations of actors and the enlargement of time horizons into an unknown economic future are crucial components of the genesis of the cap i talist order, and of its dynamics.