Debates about economics are competing fictions: political actors create imaginary narratives to shape the future. Utopian imaginaries like the 1AC insert counter-narratives that challenge the alienation, exploitation, and oppression of “free market” politics

The act of naming the expectations of economic actors “fictional” draws attention to their literary features and implies that lessons can be learned from literary theory about the nature and function of the imaginaries involved. In particular, fictional expectations generally adopt a narrative form that helps make sense of the world and generates the required conviction and social legitimacy for action. Such narratives combine due-diligence assessments of known constraints and causal mechanisms with imaginaries of how the future might look that go well beyond observable facts. They may take the form of “new era” stories, promised fortunes, or dystopias that must be avoided. They may be influential in their own right or become embedded in the assumptions of algorithms or other calculative technologies. As Harro van Lente and Arie Rip demonstrate in empirical studies of innovation processes, narratives assign roles to economic actors and technological objects and develop a “plot” – a storyline of how an imagined future may unfold. Such stories motivate by delineating an emotionally charged vision of the future. They provide a road map that helps counter anxiety in the face of uncertainty by simulating possible outcomes and making them feel tangible. In short, narratives provide a logic of action and populate the present with imagined futures that seem worth investing in. Aptly, David Tuckett speaks of “conviction narratives.”

One of the main reasons that fictional expectations adopt a narrative form is to ensure that an imagined future can be conveyed to others. In so doing, they ape literary texts by following social conventions of language and narrative structure but also by occasionally departing from these conventions in original and enlightening ways, thereby casting a new and unexpected light on current reality and economic possibilities. For example, the fictional expectations of economic actors may use surprising metaphors to illuminate novel possibilities or express abstract ideas, and they often experiment with different counterfactual images of reality. Whenever fictional expectations are promulgated to others, their originators – like the authors of literary texts – also rely on various rhetorical devices such as plot consistency and verisimilitude to render their imaginaries credible and secure the authority needed to convince their audience.

In a further parallel with the concerns of literary theory, there is often a significant gap between the meaning of an economic story intended by its author and that read into it by other actors. The fictions created by (and motivating) any one actor become – in the act of being told to others – open to reinterpretation according to what the literary theorist Jonathan Culler calls the “horizon of expectations” of the reader. This essential process of reading and interpreting the narratives and expectations of others (the better to know how to act) is partly a creative amct of imaginative empathy – and, as such, is itself a source of indeterminacy in the economy. Social and linguistic context play an important but not necessarily deterministic role in structuring interpretations.

The fictional expectations motivating individual behavior are, of course, themselves partially dependent on social narratives and the social context of institutions, networks, and power structures. The stories we tell and the expectations we have are influenced by key opinion formers, as well as the grand narratives and shared calculative devices that structure the field of expectations. The formation of expectations in the economy is – like the writing of literature – a combination of individual creative thinking and social construction. It is impossible to understand the expectations of particular economic actors or the credibility of their narratives without considering the conceptual and linguistic context in which they are formed, and without being alive to their resonance with the dominant social narratives and economic structures of the day. So, for example, the fictional expectations of most of those operating in derivative markets ahead of the financial crisis of  were inextricably bound up with what Michael Power has called the “grand narrative of risk management” and a series of related risk practices, models, and manuals that ensured a widespread and ultimately fatal confusion between radical uncertainty and forms of risk amenable to objective probabilities. As Elena Esposito argues, these financial models were – like all fictions – “extremely controlled constructions”; but since they were not accurate representations of future reality, they ended up “reproducing” the very uncertainty they claimed to control.

Fictional expectations and the stories, mathematical models, and calculative devices embedded in them matter to economic outcomes (and to the discipline of economics) because they structure beliefs and help actors decide how to act despite the uncertainty they face. When widely shared, economic stories and models help coordinate the actions of multiple actors. Indeed, expectations can be said to have the sort of “performative” effects in markets that Donald MacKenzie noted in relation to the models derived from finance theory. They tend to structure the future at least partially in their own image or – in the case of dystopias – in sharp reaction against the vision implied. And, since economic narratives and theories (like finance models) tend – if internalized by sufficient numbers – to influence outcomes, they inevitably become instruments of political or market power. The future is shaped by political battles to establish the dominance of particular narratives.

A straightforward economic example of these battles is the use by central banks of “forward guidance” to cajole expectations in the desired direction. As Douglas Holmes puts it, communication has become for central banks the “decisive means to achieve” the goals of policy; or, in the words of Ben Bernanke, the former chair of the US Federal Reserve, “monetary policy is 98 percent talk and only two percent action.” The direction of capitalist economies is increasingly the outcome of a struggle between different state and market actors to establish their narratives and visions of the future as the most credible.

One performative effect of economic narratives and models is more indirect than this simple notion of steering the expectations of others implies, namely that they influence how other actors frame evidence, construct data, and define their own interests. As Michel Foucault argued in his analysis of the relationship between knowledge and power, power depends on the “production of truth,” and knowledge is partly a product of contingent power relations. Indeed, power – together with the discourses and related practices associated with it – “produces reality; it produces domains of objects and rituals of truth.” 

Jenny Andersson gives a topical example of this point in an analysis of the Arctic as a political and economic realm. Rival claims over the region are partly established with the help of predictive technologies that, through a “highly selective sorting of available images of the future,” seek to establish a dominant narrative about the future that suits particular interests. Yet crucially, since “future opportunities do not by definition yet exist,” the interests that the different actors pursue are partly defined by a “repertoire of future-making,” ranging from quantitative forecasts to “highly narrative genres of nation branding” and images of pristine wilderness or natural resources under threat. Political and economic power belongs to those who make their narratives, imaginaries, and models count as those that will frame evidence, define interests, and structure behavior.