principles for dealing with a changing world order

Revolution often follows when (inherited) wealth gap is too wide in decline.

Aristotle said “the poor and the rich quarrel with one another, and whichever side gets the better, instead of establishing a juster popular government, regards political supremacy as the prize victory”.

network effect from rich families), workforce gets decadent and everyone takes on more debt assuming good times will keep roaring

The rise, the top and the fall of empires: at the top, wealth gap widens (ie.

My own thought: How much does the “American empire” include other countries that follow our culture, our military and involved in our economy?.

His eight determinants of wealth and power: education, competitiveness, innovation and technology, economic output, share of world trade, military strength, financial center strength and reserve currency status (Graph from photos).

Still, by using his own determinants and data, he paints a stark picture of unassailable patterns over the last 500 years up until today that looks like this:īelow I share my notes from reading the book for my future reference. In short, the book’s biggest flaws may be that he pulls his punches against China. I’ve been disappointed that much of his coverage has not challenged him on what seems a very big conflict of interest: Dalio is heavily invested in China, an authoritarian country that does not protect criticism, and he has been careful to avoid criticizing the party. Most pressingly, he argues we’re at the late stage of the American empire, when the United States will continue to decline from its role as the world’s global hegemony and cede that position to China. He intends to look at the longest historical period possible to find patterns that can inform what happens next. It’s part of the “principles” series that includes extensive independent research that Dalio’s team maintains here.

That’s among the biggest themes from the high profile 2020 book from Ray Dalio, the founder of one of the world’s largest hedge funds: Principles For Dealing With The Changing World Order Why Nations Succeed And Fail. Elsewhere the current leading power grows decadent with rising wealth inequality, in-fighting and fading investments until the emerging power confronts it – and wins. Empires rise and fall in predictable ways that follow long-established patterns.Īn emerging power invests heavily in education, infrastructure and trade to create wealth, which it protects by strengthening its military.

Principles for dealing with a changing world order