The Self Centred Logic of Financial Markets

Abstract

Today, in whichever direction the economist looks, whether to companies, households, technological innovation or economic policy, he sees the same hold exerted by financial realities. To propose a clear analysis of this financial logic has become an absolute challenge for anyone who wants to understand how contemporary economies work. The central thesis developed in this text suggests that financial evaluation is the product of logic of opinion. One cannot imagine a point of view more opposed to that professed by academic thought. For the latter, stock exchange prices are objectively the expression of “real values”, in other words companies’ profitability. Opinion has nothing to do with it, just the most accurate calculation of companies’ long-term gains. For us, a contrario, organised financial markets are structures whose primary goal is to create consensus within the financial community and to allow for shared beliefs to emerge in a place where, without them, an infinite variety of idiosyncratic ways of deciphering the future would exists¹. With regard to this conception, finance is considered to be more an autonomous power of evaluation than the reflection of the real values, which exist before it.