Paul Ormerod’s Butterfly Economics (1998) represents one of the more accessible and provocative attempts to challenge the orthodoxies of mainstream economics. Drawing inspiration from complexity theory and the natural sciences, Ormerod argues that economies should not be understood as mechanical systems tending towards equilibrium, but rather as complex adaptive systems in which small changes can have disproportionately large effects. The title refers to the “butterfly effect” in chaos theory, where the flap of a butterfly’s wings might set off a chain of events culminating in a hurricane. In economic terms, this metaphor captures the idea that minor, seemingly insignificant decisions by individuals or firms can cascade into large-scale, systemic outcomes.
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