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1. What Makes an Imagined Future Credible?

Author:
Jens Beckert
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Narratives of the future are a crucial source of the dynamics of capitalism (Beckert 2016). Since there are no future facts, assessments of the future necessarily need to rely on accounts that cannot be limited to the presentation of facts. This means they cannot be true or false, but they can be credible or non-credible. To trigger decisions, the narrative must convince actors that it is at least sufficiently probable that events will indeed play out as portrayed. But where does this credibility come from? I propose a simple model which consists of three elements. I distinguish first the "story-maker" or "persuader", the person (or institution) that creates specific imagined futures and often wants to convince other actors of the accuracy of the narrative. Second, the "story-taker" or agent who ultimately makes the decisions through which resources are put at risk and who needs to become convinced of the credibility of the imagined future. The third element in the model is social context, the features of the social and material environment that position the agent in a social network and influence assessments of credibility.
Topic:
Capitalism, Power, Narrative, Future, Credibility, Uncertainty, Imagined Futures, Persuasion, Social Context, and Story
Political Geography:
Global Focus

2. The Greek Tragedy: Narratives and Imagined Futures in the Greek Sovereign Debt Crisis

Author:
Jens Beckert and Hans Lukas Richard Arndt
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Between 2009 and 2015 Greece underwent a profound sovereign debt crisis that led to a serious political crisis in Europe and the restructuring of Greek debt. We argue that the prevalence of negative narratives about the future contributed to the changes in spreads of Greek bonds during the crisis. We support our argument by presenting results from text mining a corpus of 9,435 articles from the Financial Times and the Wall Street Journal. Based on sentiments and a machine learning model predicting future reference, we identify newspaper articles which generate negative and uncertain outlooks for the future in the expert discourse. We provide evidence from time series regression analysis showing that these negative imagined futures have explanatory power in models estimating spread development of Greek vs. German sovereign bonds. We suggest that these findings provide good evidence for the relevance of “imagined futures” for investors’ behavior, and give directions for an innovative contribution of sociology to understanding the microfoundations of financial crises.
Topic:
Debt, Financial Crisis, Financial Markets, Future, Sovereign Debt, Economic Sociology, Sentiment Analysis, and Valuation
Political Geography:
Europe and Greece