Compound Interest Corrected
The Imaginative Mathematics of the Financial Future in Early Modern England
Bibliographic Data
| ID | 3924504 |
|---|---|
| Authors | William Deringer (Osiris Therapeutics (United States), corresponding author) |
| Year | 2018 |
| Volume | 33 |
| Issue | 1 |
| Pages | 109-129 |
| Publication date | 2018-10-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Osiris (JOURNAL) |
| Journal identifiers | ISSN: 0369-7827 • E-ISSN: 1933-8287 |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/699236 |
| OpenAlex | W2898183914 |
| Language | EN |
| Citations received | 4 |
| References cited | 31 |
What is money in the future worth today? In the seventeenth century, questions about the “present value” of future wealth became matters of practical concern, as businesspeople and governments deployed future-oriented financial technologies like mortgages, bonds, and annuities. Those questions also attracted the attention of mathematicians. This essay examines the excursions two English mathematicians, the indefatigable mathematical gossip John Collins (1625–83) and the lesser-known Thomas Watkins (fl. 1710s–20s), made into the mathematics of financial time. In capitalist practice today, present-value problems are invariably dealt with using a single technique, compound-interest discounting, which has become deeply embedded in commercial, governmental, and legal infrastructures. Yet, for early modern thinkers, the question of how best to calculate the financial future was an open question. Both Collins and Watkins explored imaginative alternatives to what would become the compound-interest orthodoxy. With help from his network of correspondents, Collins explored simple-interest discounting, which provoked thorny mathematical questions about harmonic series and hyperbolic curves; Watkins crafted multiple mathematical techniques for “correcting” the compound-interest approach to the financial future. Though both projects proved abortive, examining those forgone futures enables us to examine the development of a key element of capitalistic rationality before it became “black-boxed.”
Discounting · Economics · Futures contract · Mathematical proof · Orthodoxy · Economic Theory and Policy · Historical Economic and Social Studies · History · Mathematics · Political Economy and Marxism · Finance
Science in action
The Correspondence of Isaac Newton
Casualties of Credit
An Engine, Not a Camera
Dreamscapes of Modernity
Containing the Atom
Thomas Manley and the Rate-of-Interest Debate, 1668–1673
Interest Rate Restrictions in a Natural Experiment
The origins of English financial markets
Imagined Futures
Fear & loathing of the imagination in science
Décompter le futur
Small Skills, Big Networks
Closed Circles or Open Networks
Forward-Looking Statements
Calculating credibility
The Long-Term Rate of Interest and the Price of Land in the Seventeenth Century
Introduction
Introduction
Enlightenment Calculations
Performativity, Economics and Politics
| Unique citing works | 4 |
|---|---|
| Citations per year | 0,57 |
| Citation span | 2019 - 2025 (7) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 4 |