The time that money requires: Use of the future and critique of the present in financial valuation

Abstract

The future is persistently considered in the sociology of finance from two divergent, problematic angles. The first approach consists in supplementing financial reasoning with an acknowledgement of the expectations that are needed in order to cope with an uncertain future and justify the viability of investment decisions. The second approach, often labelled critical, sees on the contrary in the logic of finance a negation of the future and an exacerbation of the valuation of the present. This is an impasse the response to which resides, we suggest, in considering the language of future value, which is indeed inherent to a financial view on things, as a political technology. We develop this argument through an examination of significant episodes in the history of financial reasoning on future value. We explore a main philosophical implication which consists in suggesting that the medium of temporality, understood in the dominant sense of a temporal progression inside which projects and expectations unfold, is not a condition for but rather a consequence of the idea of financial valuation.

Reflexive expectations in innovation financing: An analysis of venture capital as a mode of valuation

“…As Muniesa and Doganova (2020, p. 100) point out, this analytical centering of the future in the present ends up cementing a notion of fundamental value derived from calculative practices and devices like discounting (also Doganova, 2018;Muniesa et al, 2017); it reinforces the very financial thinking that it is meant to challenge. Muniesa and Doganova (2020) go on to argue that when valuation is theorized as an anticipation of future yield it justifies and legitimates the value assigned to investment, in particular, and does not do enough to unpack how 'the craft of monetary value-making is responsible for producing a certain idea of time' (p. 108). Consequently, it is worthwhile to consider how VC financiers who make investments understand, reflexively, the 'exit' point in this process.…”

“…My approach is to draw on the existing analytical perspectives in this literature – characterized by an appreciation of the performative nature of such stories – and to draw on emerging research on reflexivity in social studies of finance (e.g. Muniesa & Doganova, 2020 ; Tellmann, 2020 ). The empirical information in this article is derived from a long-running project on the implications of the 2007-2008 global financial crisis for innovation financing, specifically in the life sciences sector.…”

Strategy’s futures

“…Such an analysis would be not only too simplistic but empirically erroneous. Take finance for example (Muniesa & Doganova, 2020). It is often viewed as the practice of speculation, trapped into monitoring and profiting from the day-to-day, if not high-frequency and real-time, variation of prices in financial markets.…”

From Value to Valuation: Pragmatist and Hermeneutic Orientations for Assessing Science on the International Space Station

“…As Muniesa and Doganova have shown, the language of future value is inherent to the financial view on things. While this is an insightful opening of new conversations about time in studies of valuation, the authors are critical of sociologists reinforcing “financial reasoning” by treating the forward-looking concept of value uncritically ( 2020 , 109).…”