• Bounded rationality in which financial actors lack the necessary information to calculate the optimal investment choices or lack the cognitive/computational capabilities to do so. • Behavioural economics that attempts to systematically understand the different types of cognitive biases in decision-making processes. In this context, he suggested that financial expectations about uncertain future events must be ‘fictions,’ where these ‘fictions’ provide heuristic parameters for decision-making and, thereby, provide orientation despite the uncertainty inherent in the situation. In common with the adjacent possible research note above, these fictions serve to create a space for an analysis based on imagining an alternative ‘reality’ which differs from current conceptions of the ‘real’. From this perspective, Beckert proposed that, under conditions of uncertainty in which future states of the world cannot be fully calculated, fictions, created by the actors in the field, substitute for the unachievable calculation-based anticipation of future states and of future events. Fictional expectations, thus, allow actors to create a representation of future events, making them capable of acting purposefully with reference to this pretended future, even though this future is indeed unknown and therefore unpredictable. Moreover, imagined futures and creative solutions often go beyond what can be rationally deduced from today’s facts and hypotheses.
Table 5 sets out the critical theory framing of the three limitations of, and solutions for, the NPV.
Limitation
Solution
Critical Theory
Static Discount Rates
Dynamic Discount Rates
Reflects Beckert’s call for imagined futures as a critique of relative positivism. Reflects Beckert and Bronck’s ‘radical uncertainty’ and ‘uncertain’ futures and the need for a wider range of investment materialities to be considered. Reflects Kaufman’s futurology and adjacent possibles model of different paths from the present to the future.
Monological Discounting
Pluralistic Discounting
Intertemporal Myopia
Intergenerational Equity
Table 5: Critical Theory Framing of the NPV Limitations and ONPV Solutions
In each case, theory suggest that calculative processes around long-term future is, by definition, subjective, interpretive, socially constructed, stakeholder - relevant and intertemporally contingent.
In summary, Beckert and Brock ’s (2011) work frames our ambitions with this report and the ONPV model within it in terms of broader critiques of calculative rationality, as they put it:
More generally, economists and policymakers need to interpret the contingent and diverse ways in which economic actors visualise and imagine uncertain futures 109 .
109 Beckert and Bronck 2011, Uncertain Futures Imaginaries, Narratives, and Calculative Technologies , MPIFG, p. 6
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