The Changing World Order
Why Nations Succeed and Fail
by Ray Dalio
Pretty crazy to be reading this as Russia invades Ukraine in what I can only imagine is the last futile power grab of a disillusioned once-great empire.
Before I start, a bit about Ray Dalio. He is the founder of the world’s largest hedge fund, Bridgewater Associates. His attempts to quantify the world around him have given him the tools to make consistently good investments.
He writes about using human creativity alongside computer calculations to discover the hidden trends beneath what we perceive around us. He has been trying to share his methods of quantifying information and his curiosity in recent years. More information can be found in his book “Principles: Life and Work.”
The Changing World Order is very popular in the Crypto-verse and with investment influencers on Youtube. As I watch people line up outside of banks in both Russia and Ukraine to get their life savings out while they still can, I see why.
This is one of those singular idea books – the main thrust is delivered in the beginning and is supported by arguments, statistics, indexes, etc.
Ray Dalio’s thesis is that Empires rise and fall in cycles, but more than that, the cycle can be broken down into six rough stages. By examining empires in this way, one can get a rough sense of where the current world powers are on the arc of this repeating cycle.
He doesn’t have great news for those of us invested (emotionally above all else) in the future of the United States. But I don’t think his reflections are inaccurate.
He also points towards China as the up-and-coming world power. I just hope the transition is peaceful and orderly. And that America will then have the chance to pull itself together again to become more competitive in the educational, technological, and civil consciousness kinds of ways.
While I hope that some of Dalio’s predictions don’t come to pass. For example increased polarization in America, the potential for greater political disturbance and civil war, increasing inflation, and debasement of the dollar. I can still take what Dalio says and try to ‘hedge’ my bets in my personal life. Keeping in mind of course that real-life bets are interpersonal relationships, that they’re constructed over time, and with heart, and that it is not as easy to divide these things as a hedge fund manager might with a basket of currencies and stocks.
Dalio also gave me a new idea that I’m surprised I haven’t run into before. That there is a myriad of different kinds of wars: trade/economic, technological, geopolitical, capital, military, cultural, and internal.
When you specifically look for these conflicts in the world, you can see the rivalry between nations much clearer.
If you’d like to sample some of the ideas of the book please see this excellent summary on Youtube. It’s forty minutes long, but only if you play it at normal speed…
Are you considering buying Dalio’s book yourself? What do you think about his analysis? Is America in clear decline?