Reviews and endorsements:
“A vital and timely book, The Butterfly Defect is the first to show why systemic risk threatens us all and how it can be managed. It is a must-read for anyone concerned about our rapidly integrating peoples and businesses, and the future of our hyperconnected world.” — Pascal Lamy, former director-general of the WTO
“The Butterfly Defect is remarkable. Never has globalization, in its dramatically increased interconnectedness, been looked at so completely and clearly. For policymakers in particular, the book’s analysis of the systemic fragility associated with globalized interconnectedness and the need for systemic resilience are of utmost interest.” — Jean-Claude Trichet, former president of the European Central Bank and current chairman and CEO of the Group of Thirty
“Globalization is the girl with the curl: when it is good, it is very, very good, but when it is bad it is awful. It generates a world at the same time both robust yet fragile – economically, financially, environmentally, and socially. The Butterfly Defect explains why this opportunity-cum-threat calls for a radical new approach to the setting of public policy–an approach which to be successful needs to be every bit as hyperconnected as the world it is operating in.” –Andy Haldane, Bank of England
“This fascinating and useful book provides interesting examples and connections across a range of fields and areas of study.” — Danny Quah, London School of Economics and Political Science
“This interdisciplinary and far-reaching book brings together diverse research to highlight the increase in systemic risk that accompanies the interconnectedness associated with globalization. No other book has summarized these issues for the general public, and The Butterfly Defect will benefit a broad audience.” –David Colander, Middlebury College
“Filled with striking examples, this ambitious book offers a new perspective on globalization – in particular, the need for policy responses that recognize the challenges presented by the globalization of many domains, from health to finance. The message about the need for coordination to overcome systemic problems will strike a chord with readers.” –Diane Coyle, author of The Soulful Science: What Economists Really Do and Why It Matters
In a Q&A for the Princeton University Press blog, Professor Goldin explains his motivations for writing The Butterfly Defect and why the book is an essential read for anyone concerned about the future of our planet.
Why did you write The Butterfly Defect?
I wrote The Butterfly Defect, together with Mike Mariathasan, as I believe that globalisation, by which I mean the growing openness and integration of societies, is a force for immense good. But, it also causes great harm. Unless we are able to mitigate the negative factors and harvest the positive elements more effectively, it will lead to growing instability and disastrous outcomes.
This is the last of my series of four books on globalisation. The previous three identified the factors that could lead to better management and policies (Globalization for Development: Meeting New Challenges;Exceptional People: How migration shaped our world and will define our future; and Divided Nations: Why global governance is failing, and what we can do about it. The Butterfly Defect focuses on the systemic risks being generated by globalisation. These threaten to unravel the progress made to date and lead to the rejection of integration and globalisation. Rising protectionism, zenophobia, nationalism and other symptoms of the desire to reduce interdependence are manifestations of the concerns that citizens and politicians have that globalisation is not working and that the risks associated with integration outweigh the benefits. The book identifies ways to manage and mitigate the risks.
What was the most interesting thing you learned from writing this book?
The financial crisis represents a watershed in history. It is the first of a new type of systemic crisis which will characterise the 21st century. The four key failures which gave rise to the crisis are present in many other areas. Unless we can manage the new forms of systemic risk more effectively it will lead to growing global instability. Although the rising threat posed by pandemics, cyber attacks, widening inequality and political fracturing, environmental collapse and climate change, infrastructure weaknesses and supply chain disruptions and other systemic risks appear unrelated, they have the same underlying causes and solutions. These are: accelerating integration and interdependency as a result of economic and political opening and new technological platforms; growing complexity and an inability to discern cause and effect in the blizzard of big data; technological revolutions leaping ahead of evolutionary institutional reforms; and, the growing gap between local management by divided nations of global and regional processes and systems.
What do you think is the book’s most important contribution?
The book is the first to identify systemic risks as being an endemic feature of globalisation. It stresses that globalisation has been the most powerful force for improvements in living standards around the world, but the engine of progress has also unleashed dangerous and potentially destabilising forces which could not only arrest the progress made, but lead to instability and reversals. The book provides perspectives on how we can manage growing integration and complexity. It is unique in the breadth and depth of its analysis. It builds a bridge between the cutting edge of academic knowledge and the worlds of business and policy.
Who is the audience?
The book has been written for the widest possible audience. It is rooted in scholarly research and provides a great deal of evidence and analysis of the theory. However, the language is accessible and I have worked hard to reduce jargon and to avoid equations and writing that cannot be widely understood. My aim has been to write a book that will be read by students, business people, policy makers and anyone concerned with a sustainable future for our planet.
How did you come up with the title, The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do about It?
The title arose in a discussion with a student at Oxford who was engaged as a research assistant for the book. It is a play on the concept of the butterfly effect, which is well known in complexity theory and physics, with the replacement of ‘effect’ by ‘defect’ seeking to highlight the risks associated with a highly interconnected world. The subtitle tells readers what the book is about and highlights the fact that The Butterfly Defect goes beyond identifying the issues to provide practical lessons and tools to manage the systemic risks which globalization creates.
Press coverage and media reviews
- Risk and Complexity, Finance and Development, 1 September 2017
- Book Review: The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do about It, LSE Review of Books, 7 July 2015
- Oxford Professor paints bleak future in new book if we don’t manage globalization and systemic risk, World Risk and Insurance News, 21 May 2015
- Global Solutions for Globalization’s Problems, Project Syndicate, 27 November 2014
- The butterfly defect: How to manage systemic risk, Vox, 21 November 2014
- Ebola outbreak is latest example of globalization’s risks, PBS NewsHour, 13 November 2014
- Globalisation has created substantial benefits, but global governance must evolve to meet the challenges posed by new systemic risks, LSE European Politics and Policy Blog, 1 September 2014
- The promise and the perils of globalisation: a conversation with Ian Goldin, Prospect Magazine, 14 August 2014
- A qualified defence of economic complexity, Financial Times, 20 July 2014
- Getting Globalization Right, Project Syndicate, 16 July 2014
- Globalization and systemic risk, European Financial Review, 19 June 2014
- To preserve the benefits from globalization, global connectivity requires global coordination, LSE American Politics and Policy Blog (USAPP), 27 June 2014
- Asia’s Week: India and Others Can Overcome Animosities, Forbes, 16 May 2014
- Looking forward to the Hay Festival, OUP blog, 14 May 2014
- The ‘Butterfly Defect’ at the heart of globalization, Financial Times, 14 March 2014