The Butterfly Defect: How Globalization Creates Systemic Risks
Preface. I’m fascinated by system risks, so I’ve included this, though there’s no awareness at all of peak oil or limits to growth or that energy, not money, is the basis of civilization and foundation of every single widget made and transported. But since the next economic collapse may well be due to the financial system, and since money is how most people view the world, here are my Kindle notes. David Korowicz has the best articles about systemic risk, I review three of his publications here.
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Ian Goldin & Mike Mariathasan. 2015. The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do about It. Princeton University Press.
We are so accustomed to globalization that we take for granted the products and services we consume from around the world.
Our information technology (IT) services may run on Israeli software provided from Mumbai as we consume entertainment from Los Angeles filmed in South Africa on computers manufactured in China or Taiwan assembled from parts from more than 20 countries.
Individual and local choices have global impacts and vice versa: what happens outside our borders has direct daily consequences for each of us, every day. These connections are complex, frequently opaque, and often beyond our control. Yet together they are shaping how the world develops. As we will see, there is a growing likelihood that events in one place will have cascading effects in other areas, jumping across national borders and sectors
Globalization can generally be understood as the process driven by and resulting in increased cross-border flows of goods, services, money, people, information, technology, and culture. 2 These flows are multi-dimensional, and the number of connections between them is unprecedentedly large and growing exponentially. It is becoming deeper in that these connections penetrate a growing range of human activities. Increasingly not only people but also things are being connected—cars, phones, merchandise, and a rapidly widening range of inanimate objects and sensors.
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