Confidence is conventionally not thought of as an emotion. Indeed, the cognitive dimension of it is widely held to be much higher than the feeling dimension. But all action, it is argued in this chapter, is based upon that confidence which apprehends a possible future. This is where the conventions become unstuck. Futures, as states of affairs which have not yet occurred, cannot be known. The cognitive dimension of confidence is therefore best understood not in terms of what the actor is directed toward, but in terms of the actor's “self-knowledge.” But, as William James reminds us, persons know themselves through the emotions self-examination or self-awareness arouse or provoke ([1890a] 1931, p. 305). Confidence is one such emotion: its cognitive aspects encompass information of self-understanding; without this, action could not occur.

After an account is given of confidence as an emotion, and of its object, future time, this chapter moves to a discussion of the significance of confidence for the theory of action. In this exposition the contribution of Keynes's account of investment confidence is highlighted. This is an appropriate point of departure for a treatment of the case of business confidence. This latter is engaged in the chapter to demonstrate further possibilities to be drawn from a focus on the emotional nature of confidence. There are a number of formal and empirical problems associated with the phenomenon of business confidence, which, it is shown, can be overcome when its emotional aspects are foregrounded.