Fictional expectations

11 Nov, 2019 at 17:41 | Posted in Economics | 4 Comments

blFundamental uncertainty due to unknown and unknowable future events prevents rational calculations from accurately anticipating the future. This implies that the expectations that intentionally rational actors hold are not of the kind assumed by rational expectations theory. The proposition developed in the paper states instead that expectations are fictional in the sense that they are based on pretensions of future states of the world.

Understanding decision processes based on the concept of fictionality points to a non-teleological theory of action that brings the creativity of actors and the contingency of the future into the foreground. The goal is not to develop a more accurate theory of prediction but rather a theory of the unpredictability of the world and of how intentionality unfolds despite this unpredictability of outcomes. The fiction-ability of humans allows for the imaginative representation of future states of the world in the mind and the imagining of decisions of other actors … It brings to the fore the role of images of the future for the understanding of the present and thereby departs from theories in the social sciences that see the present as being shaped through the past.

Jens Beckert

4 Comments

  1. Mark Blyth ” I had economic sociologists Richard Bronk and Jens Beckert over for a talk about their book Uncertain Futures. Here’s the video of the talk.”

    Dynamic capitalist economies are characterized by relentless innovation and novelty and hence exhibit an indeterminacy that cannot be reduced to measurable risk. How then do economic actors form expectations and decide how to act despite this uncertainty?

    This talk will focus on the role played by imaginaries and narratives as well as calculation, and argue that the market impact of shared calculation devices, social narratives, and contingent imaginaries underlines the rationale for a new form of ‘narrative economics’ and a theory of fictional (rather than rational) expectations.

    When expectations cannot be anchored in objective probability functions, the future belongs to those with the market, political, or rhetorical power to make their models or stories count.

    The discussion will also explore the dangers of analytical monocultures and discourses of best practice in conditions of uncertainty, and examine the link between uncertainty and some aspects of populism.

    Jens Beckert is director of the Max Planck Institute for the Study of Societies in Cologne, Germany. He is currently Theodor Heuß Visiting Professor at the New School for Social Research in New York. Beckert works in the field of economic sociology with a special interest in the investigation of markets. In recent years his research focused on the role of expectations and imaginaries in economic decision making. His book Imagined Futures. Fictional Expectations and Capitalist Dynamics was published in 2016 with Harvard University Press.

    Richard Bronk is a Visiting Senior Fellow at the European Institute of the London School of Economics (LSE). He is author of The Romantic Economist: Imagination in Economics, Cambridge University Press (2009). Educated at Merton College, Oxford, Bronk worked for seventeen years in the City of London – in the Bank of England and as an equity fund manager – before joining LSE in 2000 to teach European political economy. His approach to philosophy of economics is grounded in a history of ideas perspective and in his practical experience in markets and policy.

  2. Berkert’s paper is a very interesting read.
    .
    The notion of fictional expectations could become a powerful way of looking at economic decision making.
    .
    Uncertainty encourages the construction of imagined futures and the narrative surrounding these futures. If enough people believe these narratives then these imagined futures can become reality.
    .
    It would thus be fair to say that uncertainty can indirectly cause a future to arise which in turn gives rise to certainty – bordering on the paradoxical.
    .
    We can all remember Bill Gates in the mid 1990s speaking incessantly about the information superhighway to come. What he was talking was not patently clear or even believable. Yet his speaking (creating a narrative) created a future.

  3. Berkert’s paper is a very interesting read.
    .
    The notion of fictional expectations could become a powerful way of looking at economic decision making.
    .
    Uncertainty encourages the construction of imagined futures and the narrative surrounding these futures. If enough people believe these narratives then these imagined futures can become reality.
    .
    It would thus be fair to say that uncertainty can indirectly cause a future to arise which in turn gives rise to certainty – bordering on the paradoxical.
    .
    We can all remember Bill Gates in the mid 1990s speaking incessantly about the information superhighway to come. What he was talking was not patently clear or even believable. Yet his speaking (creating a narrative) created a future.

  4. Fictional expectations guide actual cooperative behavior and strategic committments. The latter construct not just imaginative dreams and frauds, but the actual concrete emerging future.
    .
    Treating uncertainty as the “unknown” misses the real implications of uncertainty, which is not undifferentiated ignorance awaiting surprise, but partial knowledge without the convenience of boundaries. And, people act. People act!
    .
    The capital fact of sunk-cost investments, which pervade and form economic structures, is a response to pervasive uncertainty. This ought to be obvious, but apparently is insufficiently appreciated.


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