Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

This is an extraordinary book. Although it’s written by an economist, it is anything but boring. The author does an outstanding job of examining multiple empires across hundreds of years. He analyzes the rise and fall of each empire by segmenting their respective histories into different cycles. He then identifies the various cycles that each empire goes through, from its initial rise to its eventually fall. Each cycle is sub divided into key indicators such as military strength, budget deficits, wealth gaps, education, etc. In the end, the author looks at the United States using this same cyclical methodology. Mr. Dalio’s arguments and analysis are sound and make good sense. His interpretation and description of various historical events, especially those pertaining to the British and Dutch empires, are right on target. Throughout the book, he is consistent in the application of his analytic model. This is noteworthy as I felt his analysis of China to be slightly flawed. The author appears to have omitted certain elements of modern-day China; most notably is the pending population time bomb caused by their previous one child policy. China’s population is now shrinking. In addition, and unlike America, the Chinese seem culturally incapable of using immigration to solve their problem. This opposing view of China, however, does not detract from the author’s overall analysis. He is consistent in his analysis and cites other data which support counter arguments. Bottom line, this book was far more interesting than I anticipated. Even though the author’s analysis is complex, the book is well written and easy to understand. The narrative is both captivating and entertaining. Overall, this is just a great book.

I’m grateful Ray Dalio has shared his world view and his access to leading thinkers and valuable sources of data, to make me more aware and better prepared for what’s coming. I am also friends with Ray, and I trust him. This book offers at least two major contributions. First, the synthesis and integration of economic, social, and geopolitical history that presents a holistic view of how countries rise and fall. Leveraging his relationships with leading thinkers and historians, Ray gives us a way to understand the major forces, cycles, and paradigm shifts that can dramatically change the world around us. You would have to read dozens of well-chosen books to gain such an understanding, and you still may not have a comprehensive theory. Second, the quantification of each major nation’s economic, cultural, and geopolitical health. With the support of Bridgewater’s multi-hundred-million-dollar research budget and team, Ray presents the key determinants of a country’s strengths and weaknesses through time, and relative to other countries. Seeing the most important long-term trends in charts provide useful perspectives that are unavailable elsewhere. Here are some of my biggest take-aways. Disorderly conflict is the pre-cursor to destructive conflict that is likely to be devastating for all of us. Both the winners and the losers of destructive actions are worse off relative to compromise, mutual understanding, and respect. As an American, I should not take for granted that I live in the most powerful country that has seen one of the longest periods of peace, economic growth, and innovation in global history. It’s not the norm, and if we aren’t careful, things could get a lot worse. Invest in innovation. Both as an investor and as a citizen, innovation has been a powerful force for improving lives and driving economic growth. We are likely in for a period of high inflation. The easiest way for the government to deal with high levels of debt is by printing money, using stimulus to spur economic growth, and keeping interest rates lower than nominal GDP growth. That is, to inflate their way out of debt. As an investor, he suggests avoiding long term holdings of cash and bonds. Instead, he recommends diversifying with assets that can do well in an inflationary environment, like highly dependable cash generating stocks, some gold (possibly a little cryptocurrency), and other scarce inflation-protected assets. This book is a major contribution. I strongly recommend reading or listening to it. If you don’t have the time, at least read the first few pages of the introduction, the first chapter “The Big Cycle in a Tiny Nutshell”, chapter 8 "The Last 500 Years in a Tiny Nutshell", and the final chapter called “The Future”. I hope you found this helpful.

This is an excellent and highly insightful book. Ray Dalio explains long-term cycles and national trends in a clear and compelling way, and many of the frameworks are very eye-opening. I only wish there were more guidance on how individuals can apply these principles in their own lives. Still, it’s a great read and well worth the time.

This book isn’t just about economics; it also takes a captivating look at history. Written in a style similar to his previous book, "Big Debt Crises," Ray presents history in cycles. To make things easier to grasp, he added some helpful features: passages are bolded for a quick read, and a red dot marks principles that are considered timeless and universal truths. I really appreciate the QUICK-READ option. It’s so easy to overlook key points in a long book, but the bolded sections help me focus. For example, one universal truth is, "Throughout time, the formula for success has been a system in which well-educated people operating civilly with each other, come up with innovations, receive funding through capital markets, and own the means by which their innovation..." The book is divided into three parts: How the world works, How it has worked over the last 500 years, and the Future. The first part explores the rise and fall of empires. The second offers an in-depth look at the Dutch Empire, the British Empire, the United States, and China. The last part looks ahead at what’s to come. The appendix even includes a computer-generated power score for 11 world-leading countries. I haven’t finished the entire book yet, but after reading some chapters, I can say Ray did a fantastic job condensing 500 years of history into an accessible, engaging format. The graphs also help clarify his points. It answered many questions I had, like how pandemics have impacted the world. Instead of flipping through multiple books to find answers, I can find everything I need here. What I also really appreciate is Ray’s honesty. He doesn’t shy away from tough issues. If he's not an expert on something, he clearly states where he learned it from. He’s straightforward, sincere, and speaks his mind. Even if you do not believe that history will repeat itself, you will still enjoy reading this book.

A great read!

Dalio has a unique perspective on the topic of the changing world order. He is a successful businessman who has spent his career analyzing economic trends and patterns, and this book is a culmination of his findings. His writing is clear and concise, making complex economic concepts easy to understand. One of the best features of the book is its organization. The book is broken down into 14 chapters, each focusing on a different aspect of the changing world order. Dalio starts with the big picture, examining the major forces driving the changing world order, before delving into the specifics of each major empire, including the Dutch, British, American, Chinese, Soviet, and Japanese empires. Ultimately, he brings everything full circle by discussing the changing world order today and what the future may hold. Another great aspect of the book is the way that Dalio weaves history and economics together. He doesn't just present economic theories in a vacuum; he uses real-world examples to show how they have played out over time. For example, in Chapter 5, he discusses the Great Depression and how it shaped the changing world order in the 1930s and 1940s. He also uses the rise of populism in Chapter 7 to illustrate how economic inequality can lead to political instability. Overall, I would highly recommend "The Changing World Order" to any intelligent human interested in economics, history, or politics. This book is a must-read for anyone who wants to understand the forces shaping our world today and what the future may hold. As Dalio himself puts it, "understanding how the world works is essential if you want to accomplish your goals and live a fulfilling life." Here are some key takeaways from the book: The changing world order is driven by three major forces: the changing relative powers of countries, the changing relative productivity of countries, and the changing values of countries. The rise and fall of empires is a natural part of the changing world order. Each empire has its own unique characteristics, but they all follow a similar pattern of rise, peak, and decline. The post-World War II order was built on the idea of free trade and cooperation between nations. However, this order is now under threat due to rising nationalism and protectionism. China is currently on the rise and is likely to become the world's dominant economic power in the coming decades. However, although this rise is not guaranteed, and there are many challenges that China will need to overcome, the US needs to step up its game on several fronts to compete. The future of the world order is uncertain, but there are a few things we can say with some degree of certainty. For example, the rise of automation and artificial intelligence is a hot topic today likely to have a major impact on the global economy in the coming years. Overall, "The Changing World Order" is a well-written and informative book that is sure to appeal to a wide range of readers. Whether you're a history buff, an economics nerd, or just someone who wants to better understand the world we live in, this book is well worth your time. As Dalio himself says, "The more you know, the more you'll understand, and the more you'll be able to make informed decisions about your own life." Five stars from me, give it a read!

Great book. Dalio does a remarkable job seeing the bigger picture and providing confidence through historical events/ever repeating cycles that you can predict at a high level what is coming next for a given country or the world and plan accordingly. The corkscrew of evolution analogy is a perfect one, where the human race has up and down cycles but always trends up longer term thanks to technological innovation. My one criticism is he speaks out of both sides of his mouth in one instance, presumably because he doesn’t want to upset any high ranking politicians or leaders he may be friends with, which I found to be disappointing. On the one hand, he notes at the start of the book that no two democracies have waged war with each other, wars have only been fought between dictators/police states and democracies or just dictators/police states. Then later on when discussing China, he all but excuses and rationalizes their increasingly authoritarian state, as seen by Xi crowning himself leader until death and abolishing the precedent of 2 5 year term limits as of 2018. He blesses the Chinese approach of a few rulers knowing what’s best for all, as if those rulers are acting in the broader interest of Chinese people, and that’s an acceptable alternative to democratic rule. He cites the recent video game ban as having merit or at least being understandable, suggesting that he thinks the ends can justify the means. All the while there’s no mention of the atrocities of Mao under this authoritarian type of rule, no mention of the Muslim genocide going on now, the suppression of free speech and jailings and beating and murders of those that oppose the current regime, no mention of internet censorship, etc. To bring the criticism full circle, he doesn’t link his first point on wars and authoritarians always being involved in them, with the fact that China is an authoritarian state and therefore it’s rise threatens the free world and human progress. Ironically, he does correctly acknowledge China’s opening up to market and establishment of capitalist principles for rocketing them toward the US in terms of power, while refuses to critique the political system despite its history of failings, violence and pain. Russia invading Ukraine couldn’t drive this point (ie the civil or political system being as important as the economic system to the long term success of a country and world peace) home any harder.

I'll keep this relatively short although the book deserves a formal and thorough rebuttal/response. Sloppy Writing Dalio is a bad writer. He needs a better editor. Too many poorly constructed sentences, "I"s, and phrases like "perpetual motion machine" (which are cliché and serve as a tired metaphor for metaphysical reality). I suspect Dalio wanted to use these literary devices to come across as personable and as if he is deeply considering the inquiry he has engaged in. Instead, because his execution is poor, the writing comes across as if a snobbish oaf wrote it. This obviously isn't the case. Dalio is smart and his high level ideas are good, however, he is seriously lacking in his ability to verbally communicate them. Lack of Wisdom There are many instances throughout the book where Dalio fails to fully explain the phenomena of what he's talking about. He dances around the explanation for why things happen, explaining them at a high level, but then suddenly omits the root cause. This comes across as one of two things: 1) He doesn't actually understand root cause or 2) he knows root cause but won't explain it or say it out of fear of taking a side that may be controversial or offensive to some audiences. If the answer is 1) he shouldn't be writing this type of book. If the answer is 2) (and I think it is; again, he's a smart person) then he is a coward. Either scenario leads to a book that is devoid of real wisdom. No root cause analysis, no wisdom. Obsequious to Beijing This leads to the last point. Dalio's essential claim is that the US is past its prime and China will supersede it. This may be true, the US is in decline. What's disappointing in the book is that Dalio doesn't take responsibility for the US decline and celebrates its replacement by China. If you know that your own country is in decline and also claim to understand why, then DO SOMETHING ABOUT IT. Instead he brags about his relationship with corrupt Chinese oligarchs and high level communist party members. The upside to this book is that the historical analysis serves as a good primer on the topic. For books that provide a richer and more complete root causes analysis of the rise and fall of empires I would look at: The Decline and Fall of the Roman Empire -Edward Gibbon. The History of the Peloponnesian War -Thucydides. The Histories -Herodotus. The Dutch Overseas Empire, 1600–1800 -Pieter C. Emmer and Jos J.L. Gommans.