by Alperen Arslan and Zac Endter

Liliana Doganova is Associate Professor at the Centre de sociologie de l’innovation, Mines Paris, PSL University, working at the intersection of economic sociology and Science and Technology Studies. Doganova spoke with Alperen Arslan and Zac Endter about her recent book, Discounting the Future: The Ascendancy of a Political Technology (Zone Books, 2024), which explores the links between valuation and temporality through a historical sociology of the technique of discounting the future.

Alperen Arslan and Zac Endter: Besides “discounting,” the word that seems to recur the most often in your book is some version of “crisis.” You present your book as a conscious political intervention in the present as well as a historical and theoretical one. This seems to be performed by your conceptualization of discounting as both a political theory of action and an economic theory of value. Given that this book consciously intervenes in a moment of urgency, could you share what brought you to this topic originally and how these crises or your understanding of them have evolved during your research?

Liliana Doganova: The book opens with a scene of crisis: the forest fires that devastated France in the summer of 2022. It introduces discounting through its implications in the broader climate crisis. Discounting is an economic technique that derives the value of things (including corporate investment projects, public policies, or even human life or nature) by projecting the flows of costs and benefits that they are likely to generate in the future; flows that occur at different points in time are made commensurate by being “discounted” to their so-called “present value”: the more distant a flow in the future, the less its value in the present. Because discounting devalues the future in comparison with the present, it has been accused of leading to climate inaction, hampering the implementation of ambitious environmental policies, depriving us from the capacity to act on the future, and hence to face the consequences of the climate and ecological crisis. I was intrigued to observe that propositions to reform discounting, in order to make the future weigh as much as the present and offer us the possibility to act on it, were countered by the argument that discounting is not something that we can collectively decide upon, i.e. that it is instead the expression of some kind of truth or law that the nature of the economy dictates to us and by which we should abide.The will to counter that argument was one of the reasons that led me to writing this book and to position it, as you say, as a political intervention as well as a historical and theoretical one. I was convinced that my academic discipline, Science and Technology Studies (STS), offered powerful resources to analyze techniques—and economic techniques like discounting in particular—and understand their political underpinnings and implications.

However, my initial interest in discounting was not related to the climate and ecological crisis. Before my PhD in STS, I studied business and economics. Corporate finance classes familiarized me with the technique of discounting, which I never thought to question. During my PhD, I examined the biotechnology market, trying to decipher the mechanisms through which science can become business. One of the issues here was a problem of valuation: how to ascribe an economic value to something which consists in knowledge in the present and may become, if the process of research and development is successful, a good to be sold on the market in the future? How did biotechnology start-ups, pharmaceutical companies, and venture capitalists—the main protagonists of this strange but booming market—agree on the price of future, yet nonexistent and unknown, goods? I was fascinated by the fact that discounting, as a valuation technique, provided an apparent answer to these questions but at the same time became the object of controversies among practitioners. Is it possible to bestow a value upon an innovation by predicting its uncertain future? Doesn’t discounting penalize the research and development projects that are most innovative because their effects in the future are more uncertain and more distant in time? It is this kind of tension between the widespread use of a technique that forms the basis of theories of valuation in business and finance, on the one hand, and the controversies it raises and difficulties its “users” face, on the other hand, that urged me to explore the history and the practice of discounting.

These two situations—climate change and biotechnological innovation—may seem distant and unrelated. This is precisely why it was so puzzling to discover that the same technique was at stake in both. I thought that this peculiar characteristic of discounting—its ability to intervene in all kinds of places and to value all kinds of things—was precisely the problem that my research should attempt to address. This observation explains the somewhat unusual design of the book, which is neither a proper history of discounting nor a proper sociological study of the practice of discounting. The book moves from one place and time to another, mimicking the movement of discounting. Discounting takes several slightly different forms, for instance, a forestry’s formula, economics’ Net Present Value formula, corporate finance’s Discounted Cash Flow formula, and public policy’s Cost Benefit Analysis calculation. Across all these forms, discounting raises three troubling questions: is the future worth less than the present? Is it the future that matters? Is discounting a general form?

This journey has led me to think about another crisis that we are now experiencing: the crisis of temporality. The Anthropocene appears to unsettle the modern regime of temporality, characterized by a linear continuum in which time flows from the past, which is left behind, through the present, and towards a future that remains open and guides action in the present. In the present temporal crisis, we are instead witnessing presentism and acceleration. The past reappears as we bump into the consequences of the unprecedented economic development that some parts of the world have been enjoying in the last few centuries; the future darkens and fills with the threat of pending environmental disasters. I believe that the sociohistorical analysis of discounting that this book proposes can help us make sense of this crisis of temporality by holding together the two distinct and apparently contradictory ways in which the future intervenes in the present today. One is the open, bright, and unchartered future of innovation, disruption, and technological progress embodied in the narratives and massive investments of “visionary” entrepreneurs and “impactful” investors. The other is the closed, dim, and increasingly ineluctable future of climate change, which seems to leave us with a repertoire of temporal dispositions limited to the urgency of saving the present and the preparedness for a future that we cannot act upon. These two futures need to be analyzed in relation to each other, bearing in mind the following question: has the open future become the exclusive province of capitalism? 

AA/ZE: While your book is, as you just indicated, within the lineage of STS, your repeated references to Peter Miller, as well as others publishing in the journal Accounting, Organizations and Society, would suggest that this book is also in close relation to the underappreciated field of Critical Accounting. Whereas critical academic literature based on other professions, such as medicine or law, readily broke through to the academic mainstream in the 1960s and 1970s, the golden age of critical accounting writing in the 1990s seems to have come and gone without making as much of a splash. Theodore Porter’s Trust in Numbers (1995/2020), which you use as a launching point for the methodological chapter of your book, was preceded by a short article lamenting the neglect of this critical accounting literature in STS, “Quantification and the Accounting Ideal in Science” (1992). You critique Porter for his emphasis on the quantitative rather than temporal translations involved in cost-benefit accounting (CBA)—that is to say, for emphasizing the scope rather than the technique of valuation—but position your book as squarely within the tradition of STS, and thus alongside Porter. STS continues to focus heavily on quantification and objectivity in Porter’s sense, for instance in the widely received, collaborative work How Reason Almost Lost Its Mind (2013). How do you understand the position of accounting as an object of study within STS today? How does placing literatures from critical accounting and STS side-by-side extend and/or challenge both traditions?

LD: Porter lamented the neglect of the critical accounting literature in STS mainly because this neglect deprived STS of an understanding of quantification. His work sought to develop this understanding through the analysis of objectivity as the adherence to explicit rules (“mechanical objectivity”) and of quantification as a means of standardization and an instrument of expanding and organizing relations between different actors (a “technology of distance,” in his terms). Porter approached accounting as a form of quantification and critical accounting as the social study of this form of quantification. Critical accounting thus shared a common theoretical background with the social studies of science and technology, as embodied in the work of authors like Michel Foucault and Bruno Latour. Porter’s argument that quantification is a technology of distance resonates strongly with both such approaches. Peter Miller and Nicholas Rose make the Foucauldian argument that apparently mundane calculative and management devices and procedures are important “technologies of government” (“Governing Economic Life,” Economy and Society 19[1], 1990). Likewise, the Latourian argument, as made by Peter Miller, is that discounting allows governments to “act at a distance” on firms’ decisions (“Accounting Innovation beyond the Enterprise,” Accounting, Organizations and Society, 16[8], 1991).

It should be noted, however, that accounting is a specific form of quantification. As the sociology of quantification (inspired by the work of authors like Alain Desrosieres on statistics or Wendy Espeland and Mitchell Stevens on commensuration) has shown, quantification practices span a variety of settings beyond the discipline of accounting. Accounting is specific for at least two reasons: it is a profession entailing the aspects related to rules and standardization that Porter emphasized, and it is a science that has been negotiating the boundaries of its expertise with other sciences that take the economy as their object: namely, economics, finance, and management. Porter was less interested in this latter aspect. Interestingly, in his study of the expansion of discounted cash flow (DCF) in the UK, Peter Miller recounts the initial hostility of accountants who saw in discounting and its future-orientation an assault by economists: as one of them put it, we should let the accountant “record the present that as it flows into the past and let him leave to others the risky business of tearing aside the veil which conceals the future” (Ronald Edwards, The Accountant, October 15, 1938, qtd. by Miller in “Accounting Innovation beyond the Enterprise,” Accounting, Organizations and Society, 16[8], 1991).

Literature from STS allows us to grasp the specificity of accounting as a form of quantification. STS urges us to attend to the way that expertise and the production of knowledge function as “politics by other means.” In my study of discounting as a “political technology,” early works in STS (in particular by Langdon Winner, Madeleine Akrich, and Yannick Barthe), which attempted to think of the “politics” of technical artifacts, have been extremely helpful. They have enabled me to broaden the analysis of the politics of discounting beyond its characterization as a technology of government and an instrument of action at a distance, brilliantly executed in Peter Miller’s study of the expansion of discounting in the UK. In my analysis, “governing” becomes one of four “political qualities” of discounting, and the very meaning of “governing” becomes more complex. “Opening the black box” of discounting—a classic STS gesture—in particular leads me to examine the meaning of the discount rate. Its redefinition as the “weighted average cost of capital” in DCF and as the “social opportunity cost of capital” in CBA, sketches a configuration in which one can no longer clearly distinguish one entity (such as government) governing other entities (such as firms). Rather, what emerges is a network of relationships in which managers act on behalf of investors, and government governs itself through an economic grid—a network marked by the imprint of broader processes that authors have described in terms of financialization and neoliberalism.

AA/ZE: Now that we have the definitions of discounting, let us interrogate what kind of “political technology” it is and how you use that term. You outline four political qualities of discounting: valuation, distribution, governmentality, and access to or prohibition from the future. At the same time, you carefully clarify that these are not enduring or natural features of ‘discounting’ and cannot be taken as permanent or automatic results of its implementation. As a “situated practice” and “flexible technology,” discounting can only function and be understood in a series of contexts, as you just indicated. From the standpoint of your discounting-focused analysis, other political technologies—human capital, as you note, is one of Foucault’s fixations—tend to serve as the ‘situation’ in which discounting of a particular type takes hold. Which other political technologies does discounting exist alongside and potentially in conflict with? How do these constellations of political technologies change over time, for instance, in the maturation of discounting in the United States in the 1950s, which you discuss in the third chapter of your book (“How did Discounting Conquer Firms’ Practices? The DCF Tool, The Investing Manager, and the Disappearance of the Future”)?

LD: I use political technology as an analytical term to convey the idea that discounting is a technique—stemming from economics and finance, materialized in equations and calculative tools—that “has politics.” It has existed in cooperation or conflict with other techniques whose political qualities are yet to be explored. In most situations I examine in the book, discounting intervenes as a substitute for other techniques that come to be criticized as insufficiently modern, objective, rational, truthful, and so on. At the same time, discounting remains powerless if not plugged into a narrative and metrological network that makes its valuations appear both legitimate and feasible. These techniques with which discounting conflicts and on which it relies for its operations can be said to constitute the “constellations” that you evoke in your question.

One such constellation is particularly visible in the maturation of discounting in the United States in the 1950s, where it evolved from a dispersed and sporadically used calculation into a standardized tool that gradually penetrated firm practices under the name of discounted cash flow (DCF). Here, discounting was promoted as a reform of managerial practices that were deemed excessively concerned with the accounting of past costs and the crafting of long-term strategies but insufficiently attentive to capital’s returns and the fight against subjectivity. The outgoing conception of decision-making involved a form of intuition guided by the definition of goals that were both broad in scope and specific to an organization. Discounting displaced this by conceiving decision-making as a process that could be standardized and rationalized. It offered the possibility to transform any decision about alternative courses of action into the comparison of higher or lower values and to represent any project via a single value: the “net present value” (NPV) of the flows of costs and benefits that it was likely to generate in the future.

This new calculative device was inseparable from discourses and theories about the purpose of the firm, such as shareholder value and the principle-agent model, which discounting’s early expansion nevertheless predated. Its efficacy cannot be explained without the work carried out by its promoters, like Joel Dean, who worked at the intersection of research, teaching, and consultancy. Its standardization followed the patterns of industry and marketing: discounting became the DCF analysis technique, packaged and sold by the consultancy company Joel Dean Associates. Today, DCF has evolved from an equation found in economics and finance textbooks into an automated tool, materialized in Excel spreadsheets and specialized valuation software. In turn, such firm-level tools plug into an infrastructure of industry databases, recording the past and translating it into averages and probabilities to produce projections of the future. Whether these different techniques that enable discounting to create statements about the value of things can be analyzed as political technologies remains to be seen. What my research can affirm is that they do indeed form a constellation, which helps explain why discounting has remained entrenched in firms’ practices despite the multiple lines of critique that have been addressed to it by academics and practitioners alike.

AA/ZE: Surely one of the most comprehensive “narrative and metrological networks”—to borrow your term—that legitimated politically charged quantification practices in European history was colonization. While the focus of contemporary historical literature on colonial governance has not fallen upon discounting specifically, it has touched upon several of your concerns in this book. For example, working explicitly on 17th- through 19th-century colonial administration, Richard Grove’s Green Imperialism (1995) initiated the historical study of sustainability and resource management as, in part, a technique of imperial government. Colonial and neocolonial administration repeatedly emerges on the fringes of your narrative before becoming more central later on. The first four chapters of your book focus on the elaboration of discounting within Western national boundaries, specifically those of nineteenth-century Germany and France and twentieth-century Britain and the United States. Chapter Five (“Discounting and the State-Investor Relationship”) and the Conclusion (“The Ministry for the Future”) open onto broader spatial vistas, namely, those of the Global South and communities marginal to or largely outside of the Western economic order. If, as your book emphasizes, discounting is a political technology in the temporal sense, how do technologies of spatial colonization and governance fit into that story? How does discounting operate in colonial regimes, and how does this compare to its operation in neoliberal or neocolonial governance, as perhaps in Pinochet’s Chile?

LD: One of the things that struck me in my research on discounting is the discrepancy between how it has expanded, to use the terms of your question, inside and outside of the Western economic order. Its progression in states like France, Germany, and the United States throughout the nineteenth and twentieth centuries has been gradual, often controversial, and somehow surreptitious. By contrast, discounting appeared suddenly, and in positions characterized by strong power asymmetries, in the African and South American settings that I have studied. In Chile, discounting was inscribed in the constitutional mining law of 1981, under the government of Pinochet, as the valuation method to be used to calculate the compensation for investors in the event of expropriation—a reaction to the valuation method used by the government of Allende ten years earlier, which resulted in compensation equal to zero for most of the nationalized copper mines. In Africa, discounting has been the object of economic experiments aiming to measure and decrease poor individuals’ discount rates, which were deemed too high and, hence, partly responsible for poverty. It was argued that improperly high discount rates impeded individuals’ ability to project themselves into the future, to perform investments, and to become entrepreneurs.

The decisiveness with which discounting was imposed and shaped outside the Western economic order contrasted with the hesitation to reform discounting within it. In the book, I mention the example of William Nordhaus’s and other economists’ criticism of the Stern Review of climate change’s economic dimensions. The Review proposed to decrease discount rates to almost zero so that the future could weigh as much as the present and hence recommend more aggressive climate policies than those to which traditional cost-benefit analyses usually led. The critique of the Stern Review’s proposition hinged on its prescriptive view of discount rates; critics advocated for a descriptive view of discount rates, in which discounting was claimed to be part of the nature of the economy, a sign to be read in the operations of markets, rather than a technology that could be geared to produce political effects or pursue political objectives.

I would also like to respond to another part of your question: How can a temporal technology such as discounting relate to technologies of spatial colonization? In the book, I sketch an argument that I have continued to pursue in my current work. Putting in perspective the temporalities of the two different valuation methods used by Allende’s and Pinochet’s governments to calculate the compensation paid to expropriated investors, I contrast the political effects of past-oriented and future-oriented valuation. I suggest that the turn to the future creates a form of “empty” time that is prone to appropriation, in contrast to valuation practices tied to a past saturated with agency and claims. I relate this future-oriented, empty time to the notion of terra nullius that was mobilized to justify colonial appropriations of land; in this new regime, the future appears as a tempus nullius that becomes the medium of a process to which I refer as temporal appropriation. Specifying the dynamics and instruments (such as discounting) of temporal appropriation can help to clarify the hypothesis of a “colonization of the future” that several authors since Anthony Giddens (Modernity and Self-Identity: Self and Society in the Late Modern Age, 1991) have put forward. My research resonates with the argument made by authors like Aleida Assmann (Is Time out of Joint?: On the Rise and Fall of the Modern Time Regime, 2020) and François Hartog (Chronos: The West Confronts Time, 2022), who diagnose a disruption of the modern regime of temporality which requires a radical rethinking of our societies’ relationship to the future.

AA/ZE: You argue that our society defines the present not by looking to the past but to the future. In this context, the future appears not as a temporal thing but as a political domain. Yet, scholars recently are also trying to reintegrate the traditional ways of knowing in policies, especially in the context of climate change and resource management. We are thinking here of Robyn d’Avignon’s convincing argument in A Ritual Geology (2022) and this point’s reiteration by Deborah Coen and Fredrik Albritton Jonsson in “Between History and Earth System Science” (2022). Indigenous societies traditionally govern and value their resources by utilizing their particular historically inherited knowledge systems. In these systems, a given parcel of resources can hold value according to valuation practices that center on their specificity, i.e. do not assume the infinitely plastic remolding of that resource in the future. Phrased more succinctly, the past imparts value to these societies’ environments alongside the future. Do such traditional ways of knowing and managing the climate—or other natural resources—have a part to play in the recuperation of political control described in your conclusion (“The Ministry for the Future: Sketch of a Program”), or does the dominant economic system only allow for responses in its own economic language? Is there a way to bring these different value systems, conflicting temporalities into conversation with each other?

LD: In the book, I discuss the issue of conflicting temporalities as part of the early formalization of discounting in nineteenth-century German scientific forestry. Discounting participated in a turn to the future as the pertinent temporality for valuing and managing forests. From this turn emerged the concept of sustainability and the conception of the state as the entity whose “unlimited existence” allowed it to embrace the “long time” of forests. This turn to the future was accompanied by a critique of other temporalities. One such temporality was market’s presentism. The market’s “principle of instantaneity,” as François Vatin described it in L’Espérance-monde (Albin Michel, 2012), translated the value of the forest into immediately observable price signals. The present of the local rural populations who valued the forest for what it readily offered them also came under critique. Theirs was the present of “necessity,” to borrow Richard Holzl’s term in his article “Historicizing Sustainability” (Science as Culture, 19[4], 2010), a present to which poverty confined actors who were deemed unable to project themselves into the future.

These three temporalities appeared to be mutually exclusive. The market demanded felling trees to release their value immediately, through the sale of timber and wood, instead of envisaging trees as the “bearers of future yields.” The present of the poor was excluded from the scientifically managed forest’s time through the criminalization of the collection of wood—as in the law famously denounced by Marx—and, more broadly, the dismantlement of a system of customary rights that had hitherto governed the use of communal land. In other words, keeping trees for the future in the name of sustainability and rationalization meant extracting them from the present-entrenched practices of their “users” and the broader past from which these practices were inherited.

Can these different temporalities be reconciled today? I observe that the accentuated concern with sustainability in the context of climate change has tended to deepen the conflict between past- and future-oriented temporalities, as well as the actors said to carry them. The inability of poor populations to project themselves into the future has been diagnosed not only as an impediment to economic development, hampering their transformation into investors and entrepreneurs, but also as conducive to environmental degradation. Solutions to climate change relying on forests continue to focus on their futures. Now, however, these futures expand beyond yields of wood and timber to include capturing carbon dioxide and providing ecosystem services, potentially translated into payments. The demand to realize forests’ recently intertwined economic and environmental values entails ensuring long-term control over forests as a condition that, paradoxically, reinforces the separation between their presents and their futures.

In the conclusion of the book, I reflect on what is to be done with the view of the “future-as-an-investment” that devices such as discounting propel. One alternative lies in cultivating temporalities found at the margins of capitalism, e.g. we might conceive of care for the present and care for the future as shared projects. Another alternative considers the possibility of subverting discounting. Following the proposition that Michel Feher makes in his book Rated Agency (Zone Books, 2018), we could embrace the investor’s perspective and harness its affordances in order to lay competing claims on the future.

Alperen Arslan is a Ph.D. student in History at New York University, specializing in the history of science and international history. His research lies at the intersection of human and environmental sciences and the histories of capitalism across the late nineteenth and twentieth centuries.

Zac Endter is a Ph.D. student in modern European and American history at New York University. He researches the conceptual foundations of human-computer interaction via the imbricated, transatlantic histories of social psychology, personality theory, and human factors engineering.

Edited by Artur Banaszewski

Featured Image: An accounting book. Øyvind Holmstad, CC BY-SA 4.0, via Wikimedia Commons.