How Small Events Trigger Large Events in Politics & Economics

The following video illustrates the power of small events to trigger large events. The Great Depression of 1929-33  was triggered, for example, by the default of a small bank in Austria called Creditanstalt. It declared bankruptcy on 11 May 1931 and was one of the first major bank failures that initiated the Great Depression at a global level.

Domino Chain Reaction

 As Henry Hazlitt explains:

“the bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of the proposed course; the good economist looks also at the longer and indirect consequences.”  

Nowhere is the power of small events more apparent than in politics and economics. The recent UK General Election has unleashed a bevy of unintended consequences some of which will not be realized for decades to come.