Leaving it to the Future: National Wealth, Repayment Capacity, and Regimes of Credibility, 1890-1914

How did expectations about a country’s productive capacity and future wealth shape investors’ expectations about sovereign debt repayment? This paper traces a fundamental shift in the discursive and calculative techniques that were employed by financial actors as part of regimes of sovereign credibility in the first two decades of the twentieth century in London and New York. It argues that the Baring Crisis in 1890 and the slow emergence of New York as an international capital market in the early twentieth century created the conditions for a systematic consolidation of expectations of the future into the languages of financial information as part of the strategies to construe and assess narratives of sovereign credibility. Although the future had been an important part of discourses on sovereign credibility during the nineteenth century, statistical, theoretical, and graphic innovations on how to calculate and visualize (national) wealth, capital and income on both sides of the Atlantic introduced a way of distinguishing between repayment capacity and willingness to repay through strategies of discounting the future—and, therefore, added a new temporal dimension to narratives of credibility by qualifying sovereign reputation (a product of the past) through a focus on a country’s productive capacity (a feature of the future which could manifestly be identified and calculated in the present). The paper also shows how this shift was tied to a transformation of the very material possibilities of production of financial information, to the emergence of theories of portfolio diversification, to a discussion of the comparability of international statistics and country performance, and to the consolidation of financial writers (journalists, market analysts, stock brokers) as the main producers of expectations of the future as decision-making tools to be consumed by the investing public in an incipient attention economy.