The Capitalist's Imagination

The German sociologist Jens Beckert argues that literary theory can help explain what economics fails to.

De geldwisselaar en Zijn Vrouw (The Money Changer and His Wife) by Marinus van Reymerswaele, 1541 (Wikimedia)

Anyone who has bought a house, started a business, purchased a stock, or spent a few dollars on a lottery ticket has fantasized about how their future might change based on those decisions. Each of those economic acts was also a flight of imagination, combining expectations with calculations of gain. Of course, it's not just individuals who do this, but institutions, such as the banks that make loans to the home buyers or entrepreneurs, or the firms that provide earnings projections for their stocks. While some part of those projections are based on seemingly rational calculations, the uncertainty of the future is unavoidable, and that is where fiction and fantasy come in. The act of imagining the future in finance goes by other names—"vision" and "invention" are among the more respectable euphemisms—in order to disguise the presence of the non-rational in financial activity. But rarely do scholars explore the role of imagination in economic life systematically. In a realm dominated by economic and financial scholarship that aspires to be "scientific," fantasy and creativity in envisioning the future are often ignored; they don't fit well into a model of research whose aim is to reduce unknowns and to eliminate surprises as much as possible.

German sociologist Jens Beckert tackles this problem head-on, making imagination the focus of an extended meditation on the role of the unpredictable future in creating modern capitalism. His new book, Imagined Futures: Fictional Expectations and Capitalist Dynamics, makes a thorough, exhaustively documented argument in support of what many have suspected about capitalism: It's a castle in the air, built on fantasy shading into fraud. He makes a compelling case that no corner of the market is untouched by the process of generating imagined futures. The novelty of his work lies in offering a way to understand that process as a social system in which everyone, from individuals to institutions, is implicated.

Among the most daring and distinctive aspects of this book is Beckert's argument that literary theory can be used to analyze phenomena that economics has been unable to explain or predict. In essence, Beckert asserts that if readers are willing to accept that fiction plays a large role in capitalism, then they need to follow that insight to its logical conclusion by applying to markets the analytical tools developed for studying works of literature. While this may come as a shock to readers more accustomed to the dominance of economic theory in analyzing markets, it is an opportune moment to reconsider those orthodoxies, for two reasons. First, memory of the abject failure of economic models in the 2008 global financial crisis is still fresh. Second, post-mortems in the form of popular films like The Big Short and Inside Job keep cropping up as vivid reminders of just how much fiction was pumped into the markets and the media before the crash. Beckert's book, while far more scholarly and conceptual in approach, complements those popular works by offering a big picture view of the social processes that make such catastrophes happen.

In this sense, Beckert does for modern denizens of capitalism what Toto did for Dorothy and her companions in The Wizard of Oz: He pulls back the curtain on the great spectacle that has long enchanted, bewildered, and frightened so many. Watching as Beckert exposes the pulleys, levers, and other mechanisms generating market fantasies may elicit mixed feelings for readers. On the one hand, there is the emotional thrill of transgression (flouting the command to "Pay no attention to the man behind the curtain!") and the intellectual excitement of demystifying a complex process that has become increasing important in contemporary life. On the other hand, there is the dismal recognition that future-oriented economic fantasies—even at their moments of peak excitement, such as the bull markets when dreams of getting rich and enjoying unlimited potential seem tantalizingly close to realization—often turn out to be the creations of shabby little men manipulating the hopes and dreams of others.

To be sure, there are true innovators and creative geniuses, such as Thomas Edison or Steve Jobs, who have played their own, largely constructive roles in imagining the future. Beckert acknowledges these quasi-heroic figures and the ways in which they have harnessed the capacity for fantasy to make positive contributions to the world; they succeeded not just because they could imagine new and better worlds, but because they could convince others to share and support those visions until they became reality. But for every Edison or Jobs, there seem to be many more individuals who simply exploit the human propensity to project their fantasies into the future, without delivering anything of value.

Beckert also acknowledges these shysters and flim-flam men—notably through figures of recent ill-repute such as Bernard Madoff—but addresses their implications only in passing. If there is anything to criticize in Imagined Futures, it is that the book makes so little of the workings of manipulation and fraud in the capitalist imaginary. The flip side of confidence, a crucial underpinning of markets to which Beckert devotes considerable attention, is the confidence trick. A robust body of scholarly and popular literature argues that fakery and fraud have been built into global capitalism from its inception; but surprisingly Beckert does not engage with this work or its implications.

This is particularly unfortunate because under the heading of popular writing, so many famous works of fiction delve into the subject in ways that would offer useful illustrations of and support for Beckert's own arguments. Examples include Herman Melville's 1857 novel The Confidence Man and Thomas Mann's Confessions of Felix Krull, published about a century later. Both novels share Beckert's ambition to expose the ways that imagination and fantasy—albeit in corrupted forms—dominate the workings of market organization and exchange. But the task will be left to some other author to deliver on these possibilities of fully realizing the connection Beckert imagines between the worlds of fiction and finance.