World-System (1950-2025) Edge of Chaos in Swirtzerland.

 

Nov 14, 2025 The New York Times reports (here) that "The United States and Switzerland said on Friday that they had reached an agreement to lower a punishing 39 percent tariff on Swiss goods to 15 percent..."

The agreement with the US was particularly important because: (1)  Switzerland has an unstable, cyclical relationship with the US and (2) There are no stable Geopolitical Alignments for Switzerland (even the BAU model, see the Notes below, requires stabilizing the Export-Employment controller).

This post looks specifically at the US and Germany (DE) economies and their impacts on the Swiss Economy.

Deterministic Chaos in socio-technical systems is a situation where a model of the system is deterministic but the future path of the system cannot be predicted because it is chaotic. I have always assumed that Chaos in social systems is so dysfunctional that it could not persist over time. Indeed, the "best" models (using the AIC), I have found, in macro social systems are often unstable but not chaotic. Here is an example for Switzerland.

Two of Switzerland's biggest trading partners are the US and Germany (DE). However, the CH_LM model driven by outputs from the USL20 and DE_LM models are on the Edge of Chaos (see the graphic above).  Here are the System Matrices for the two models:

and the Germany (DE) model:

One thing to notice is the large coefficient values. Values over 1.0 on the diagonal of the System Matrix indicate instability. Large values > 1.0 on the off-diagonal elements of the System Matrix indicate potential chaos.

I have pointed out in an earlier post (here) how the Trump II Administration is tinkering with a World Trading System it does not understand. The tinkering might involve pushing trading partners to the Edge of Chaos.

You can experiment with the CH_LM BAU model here.

Notes

ChatGPT

CH_LM Model

The CH_LM Measurement Matrix (see the Boiler Plate) has three components that explain 100% of the variance in the indicators: (1) the Overall Growth Component (93% of the variation), (2) The Export-Employment Controller (0.687 X - 0.618 HOURS, 7% of the variation), (3) The Urbanization Controller (0.547 U + 0.275 N - 0.566 HOURS - 0.446 X, >0% of the variation).

CH_LM System Matrix

The CH_LM System Matrix (see the Boiler Plate) shows that the system is unstable cyclical and the main source of instability is the Export-Employment Controller (F[2,2] = 1.02993562).

You can experiment with the CH_LM BAU model here.