Madame Butterfly Flaps Her Wings
(11 November 1997)

Puccini’s beautiful opera thrills us with tearful scenes of Butterfly, spurned by Lt. Pinkerton in an unreconcilable clash of Western and Eastern values. Butterfly, after turning to her relatives, commits suicide in shame and despair. Pinkerton misses the love of his life but realizes it too late.

I wonder if Asia did not feel spurned by the West’s failure to understand the unique ways of the region and its necessary attraction to China. The United States continued to preach its interpretation of the value of human rights and business conduct. Asia, turning inward, may have committed suicide and, at the least, has caused America to lose a major market . . . and perhaps more.

Leaping from opera to science, we know by an understanding of complex adaptive systems the possible consequences of a seemingly small event—how the flutter of a butterfly’s wings can produce a tornado on the other side of the earth. And, maybe, CAS alerts us to pay attention to this cause and its potential ramifications. So we shall watch the intricate international system, beyond authoritarian control, adapt to the Asian butterfly.

Already we see the return of risk premium in emerging markets. And the New York markets, haven for international investments in the past few years, take their clues from Hong Kong, not vise versa.

Pundits claim all is well with the economy and they are right, today. But the sequence of events could just as well be: culture first, followed by finance, followed by trade and lastly the economy. If that series holds, and it usually does at major turning points, we may be in the adjustment of the second phase . . . finance. The economy has not yet felt the shock started by the butterfly, if there is a shock to be felt.

My claim is not to know what will happen. That is not possible when a complex system is rapidly adjusting to new conditions. But rather to describe, in a somewhat different way using insights from complexity, what might happen and, if it does, to caution that there should be no surprise.

So we might pay attention and be less dogmatic than normal.

Dean LeBaron
Weesen, Switzerland
November 11, 1997