This chapter examines the role of imagination in enabling economic actors to make sense of the world and decide how to act and the part played by metaphorical thinking and analytical imagination within the discipline of economics. It starts from the assumption that modern capitalism is a quintessentially creative and imaginative system, characterized by constant novelty and radical uncertainty. The authors argue that economic behavior is therefore necessarily guided by working fictions and, in particular, by fictional expectations that combine individual imaginaries and social narratives with calculation. Building on insights from literary theory, the chapter examines the structuring and performative role of narratives and models and concludes that market power rests with those able to make their narratives and imaginaries count. Championing a new form of narrative economics, the authors propose that economists should employ discourse analysis to read the contingent interpretations that economic actors use to navigate uncertain futures.

Financial value, as I use the term in this book, is the monetary value of a financial asset: a belief or claim about what it is worth. Academic understandings of financial value are dominated by the marginalist tradition of mainstream economics, and so this chapter begins by explaining the profound inadequacy of this approach to financial value. It goes on to outline a theory of financial value based on more recent contributions from the literature, notably André Orléan’s work on financial valuation conventions, Pierre Bourdieu’s work on symbolic value, and Jens Beckert’s work on fictional expectations. It then engages a little more critically with recent work on the idea that economics plays a performative role in the finance sector. This chapter and the previous two provide a constructively critical review of the literature on value and financial value, but they also piece together what is in effect the book’s theoretical hypothesis, which is supplemented with an ontological hypothesis in the next chapter and then tested by applying it to empirical cases in the later chapters of the book.