Team of Teams: New Rules of Engagement for a Complex World

by Stanley McChrystal

Likewise, economic systems—the products of complex knots of human factors—confound linear attempts at prediction and control. It is because of this complexity that economist and philosopher Friedrich Hayek argued against state-run economic planning. In his landmark essay “The Theory of Complex Phenomena,” he drew a distinction between “the degree of complexity characteristic of a peculiar kind of phenomenon” and “the degree of complexity to which, by a combination of elements, any kind of phenomena can be built up.” In other words, some systems are essentially complex (like the human brain, or society), whereas other systems (like a big machine, or a factory) might appear complex because they have a lot of moving parts, but are essentially complicated. He argued that national economies, unlike industrial production, could never be transformed into mechanical systems with reductionist solutions: their behavior results from the decision making of millions of people, and all these decisions influence one another, making it impossible to forecast how markets will move—as in a game of chess, there are just too many possibilities for a prescriptive instruction card. Butterfly effects in the economy, triggered by tiny initial disturbances, are common.