I am not much of a science wiz, but the scientific concept known as the butterfly effect has always fascinated me. There is something whimsical about this concept; it is both terrifying and beautiful.
In 1961, the meteorologist, Edward Lorenz, suggested that when a butterfly flapped its wings in Brazil, it might create tiny changes in the atmosphere that may ultimately lead to a tornado in Texas. This reminds one of the famous quote by philosopher Johann Fichte from the 1800s; “you could not remove a single grain of sand from its place without thereby … changing something throughout all parts of the immeasurable whole”.
Experts have since disputed the fact that a tiny butterfly is likely to cause a hurricane, but it is still imperative to understand the most underlying truth of the butterfly effect: even a tiny action can have colossal effects.
By now you are probably wondering what this has to do with South Africa and more particularly why we are talking about this on a website about personal wealth. In order for each and every one of us to rise above poverty and financial stress, and to ultimately live a better life, we have to understand this concept in an economic context.
In recent months it has seemed like South Africans are more divided than ever. Not that a country should be measured by tweets and comments, but if online commentary is anything to go by, then it looks like South Africans are ready to rip each other’s hair out. Everyone seems to be blaming everyone for everything!
At Counting Coins we will never ever aim to influence anyone’s political or social views. That is not what this site is for. But if you care about your financial position, you need to care about the economy. We can debate economic views, systems and policies. We can disagree with each other about the correct path to take, and try to predict the outcome of various scenarios – but we have to care. Most importantly, you need to know that what happens in the economy will affect you in one way or another.
Whether you like it or not, it affects all of us.
We live in a complex world, and thus the effects caused by actions are mostly not equal, nor are they fair. One change in economic activity might impact one group of people directly, while only having indirect effects on others. It is, however, all connected.
Everything in our beautiful nation impacts our economy and in return influences the creation of jobs, working conditions, salaries and, ultimately, your ability to provide for yourself and your family.
If our basic education system fails, it means our children can’t become engineers, which means we can’t build better infrastructure, which means less jobs.
When we pollute streets and rivers with papers, bottles and plastic bags, it gives a bad impression to someone visiting from abroad, who then goes back home and tells tales of a dirty country. Their friends then don’t visit South Africa, which means they don’t spend their money at our spaza shops, which means we lose out on more jobs, and more money.
The butterfly effect forms part of the scientific theory known as the chaos theory. The chaos theory suggests that sometimes there are so many factors involved with something like the weather or the stock market, that it is nearly impossible to predict its behaviour.
The economy is very much the same in this regard: it is fragile and we cannot fully predict what the future might hold, and this is why it is so vitally important that we do the things that we know definitely have positive results and not do the things we know will have negative ripples. As a nation, we need to make sure that where it is humanly possible, we keep our economic butterflies in check.
If we want to be financially free, we need to strive for a country that is financially healthy. We cannot do this if we’ve got junk next to our credit rating, or junk lying in our streets.