Futurity, Pro-cyclicality and Financial Crises

Ronen Palan

New Political Economy, 2015, vol. 20, issue 3, 367-385

Abstract: Nearly a century ago, one of the leading forefathers of the school of evolutionary economics, John R. Commons, coined the term 'futurity' to describe an epochal change in the late nineteenth-century advanced economies. Futurity refers to the reorientation of economies towards the future, and specifically to the fledgling practice of treating businesses as 'going concerns' and measuring its value in terms of their anticipated future profits. Curiously, the implication of such epochal changes on the performance of the financial system had rarely been discussed, let alone addressed. This article presents a theoretical argument that suggests that futurity encourages pro-cyclical dynamics that are pulling the financial systems in ever more violent and disastrous swings.

Date: 2015
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DOI: 10.1080/13563467.2014.951427

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