Finished “Butterfly Economics” tonight. This book was like going back to school, only more intense. Part calculus, part linear algebra, part business management, and part economics, it’s central tenet is that conventional economics (the ecnonomics you and I were taught in school) is wrong in viewing “… the economy and society as a machine, whose behaviour, no matter how complicated, is ultimately predictable and controllable.”

What random things will I take away from reading this book?

Model building: Academic economists spend their large portions of their careers building models to explain or prove theories. Turns out there are multiple ways of building models to solve problems: multi-variate and uni-variate, which I’ll have to remember sometime to research. The guts of the book hinge on a model that describes the movements of ants (very little mention of butterflies for you Lepidopterists out there) between two equally distant and equally attractive (as far as ants are concerned) food piles.

Empirical Data: Much of the research in this book wasn’t possible until the early 1980’s which brought cheap computer power to the masses. Many economic theorems just couldn’t be tested empircally because they were too large for computers or the human mind to calculate.

Interacting Agents: “Once we admit the possibility that individual tastes and behaviour can be influenced directly by those of others, gaining a lead on rivals can create a virtuous circle in which the market position of a company or brand becomes stronger simply because it is already seen to be popular.”

Great book!