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Cover of Thinking in Systems by Donella Meadows

Thinking in Systems

Donella Meadows · 2008

The most accessible introduction to systems thinking: feedback loops, stocks and flows, delays, nonlinear dynamics, and emergent behavior. Markets ARE complex adaptive systems, and seeing them that way is a paradigm shift most professional investors never achieve. Meadows' insight that rational individual actions can produce collectively irrational outcomes explains half of what's puzzling about financial markets.

The case against

Meadows died before finishing it, and the seams show: the manuscript dates from 1993, so the examples (fisheries, the Cold War arms race) arrive from a time capsule. Worse, it teaches you to see feedback loops everywhere without teaching you to model a single one. You finish convinced of complexity and exactly as unequipped as you started.

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