In a capitalist system, consumers, investors, and corporations orient their activities toward a future that contains opportunities and risks. How actors assess uncertainty is a problem that economists have tried to solve through general equilibrium and rational expectations theory. Powerful as these analytical tools are, they underestimate the future’s unknowability by assuming that markets, in the aggregate, correctly forecast what is to come.

Jens Beckert adds a new chapter to the theory of capitalism by demonstrating how fictional expectations drive modern economies—or throw them into crisis when the imagined futures fail to materialize. Collectively held images of how the future will unfold are critical because they free economic actors from paralyzing doubt, enabling them to commit resources and coordinate decisions even if those expectations prove inaccurate. Beckert distinguishes fictional expectations from performativity theory, which holds that predictions tend to become self-fulfilling prophecies. Economic forecasts are important not because they produce the futures they envision but because they create the expectations that generate economic activity in the first place. Actors pursue money, investments, innovations, and consumption only if they believe the objects obtained through market exchanges will retain value. We accept money because we believe in its future purchasing power. We accept the risk of capital investments and innovation because we expect profit. And we purchase consumer goods based on dreams of satisfaction.

As Imagined Futures shows, those who ignore the role of real uncertainty and fictional expectations in market dynamics misunderstand the nature of capitalism.

This monumental study is an account of the world economy from the eighteenth century to the twentieth, an analysis and prescription for the future, and a challenge to the neo-Keynesian theories of income determination and growth. It is based on some forty years of research and teaching.

Originally published in 1978, the volume looks back over the nineteenth and twentieth centuries. It includes an analysis of how the world's population expanded from about 1 billion in 1800 to 4 billion in 1976, with some 6.5 billion in sight for the year 2000; an account of the expansion and distribution of industrial production and trade during this period; and an analysis of price and relative price movements since the eighteenth century. Rostow gives a detailed description of the Kondratieff long cycles in the relative scarcity and abundance of food and raw materials and reasons that the world economy entered the fifth Kondratieff upswing at the close of 1972. He also examines the changing pattern of business cycles over the whole sweep of modern economic growth and the failure of the post-1945 world economy to control inflation. The volume also includes short economic histories of twenty national economies responsible for 80 percent of the world's production, based on a collection of computerized aggregate and sectoral data.

Each historical section leads naturally into one or more of the major problems dealt with in the final portion of the book, which looks to the future of the world economy: food, population, energy, raw materials, the environment, and the tasks of national and international policy. Rostow argued, counter to the Limits to Growth doctrine, that the critical period for industrial civilization lay in the last twenty-five years of the twentieth century, rather than in the twenty-first century, and that what we did or failed to do in that generation would determine the shape of the longer future.

No other economic history of this depth and breadth exists. It is a reference for economists, economic historians, and other social scientists as well as the informed lay reader.