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In 2021 the hedge fund manager Ray Dalio wrote a book called "Principles for Dealing with the Changing World Order". The book is accompanied by two video summaries on YouTube, one in 5 minutes, one in 40. Got interested through these videos, now I'm reading the book, and it's really insightful!
The tldr is that in his methodology, historical global empires (the Dutch, the British, the Americans...) have a quantifiable rising – maintaining – falling trajectory of about 250 years. The general theme is that we are currently living in the period where the US is starting to fall behind on his key economical and social metrics, is divided internally, and another world power is rising to the challenge. Typically the "passing of the torch" was accompanied by a local conflict.
Dalio makes a lot of interesting points about understanding one's place in history – for example that we rarely anticipate events that have always been happening historically (pandemics, wars, economic crises), because they happened to different generations, and that this incapability to anticipate such events is a recurring theme in humankind also. These historical cycles are typically longer than one single human life, hence this constant running in circles.
He developed his research to deliver better results to his stakeholders, so economy, monetary policy and reserve currencies are an important topic to his understanding of these empires. I haven't yet encountered him discuss bitcoin in the book, but if we are to believe his narrative, China's becoming a global dominant may become a very good reason even for ordinary people to get into bitcoin and privacy, given China's current stance on cryptocurrency and surveillance policing.
Have you read the book and have something to add, or correct? If not, check these videos out and let's talk about it, I'm curious to hear what you think.
He's done a great service to bring the topic of the demise of the West and to open people's eyes to this volatile world we now live in. Doing so in an easy to understand format, with great illustrative work.
That said, what I believe he misses, is that it is likely to be the growth of the Internet and its native currency, not China, that will surpass the US dollar in influence.
The cybereconomy, rather than China, could well be the greatest economic phenomenon of the next thirty years.
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Yes, the rising empire is not an empire but sovereign and free peoples
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I couldn't finish The Sovereign Individual. It's so detached from reality. World is built with physical resources and somebody is gonna fight for it and one individual will never win an army. Cybereconomy is a real thing but it's not the whole economy.
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I started it once, and couldn't get past the first couple chapters. Then when I kept on hearing people talk about it, I gave it another try. I ended up very impressed, couldn't stop reading. People who can predict the future to a certain extent, like the authors of The Sovereign Individual, are well worth listening to.
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Good reminder. It really starts to get going around Page 200 if memory serves. Too much detailed history in early chapters.
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It isn't perfect. It makes clear that the majority (billions) cannot benefit, at least not initially. Only be the most able and well-informed.
“Tens of billions, then ultimately hundreds of billions of dollars will be controlled by hundreds of thousands, then millions of Sovereign Individuals. These new stewards of the world’s wealth are likely to prove far abler than politicians in utilizing resources and deploying investment. For the first time in history, megapolitical conditions will allow the ablest investors and entrepreneurs rather than specialists in violence ultimate control over capital.”
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Reminds me of Timothy May's various essays. powerful.
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They do, actually. The book actually does cover some of these aspects, without being overly doom & gloom. I haven't read the authors' other books around that time - The Great Reckoning & Blood In the Streets, but I assume that detail is saved for those.
The Sovereign Individual says that nation states won't have enough / any income to be able to pay for these services & infrastructure. That places that did not participate in the Industrial Revolution will be in an advantaged position, of being able to offer far more competitive and friendly jurisdictions for business and for the individual. To be able to build-out more efficient infrastructure.
“Were the streets of London to be lighted and paved at the expense of the national treasury, is there any probability that they would be so well lighted and paved as they are at present, or even at so small an expense?”
They authors mentioned that there will be a vacuum from the erosion of infrastructure no longer being able to be maintained, and that this will lead to intense volatility & spiteful behaviour in society & in particular in cities. Starting with a 'fiscal crisis', continuing with infighting and leading to organised crime filling the void that Governments leave behind.
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Good point, he is really mostly working within the framework of nation-state power relations. That said, the "internet" also isn't only a decentralized network – state actors exert huge influence over it and exploit it to advance their goals. The sort of naive Y2K view of the internet as a tool for freedom has been intensively questioned by its use by authoritarian regimes, not unlike to how bitcoin's price is still swayed by whales.
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Absolutely. But tools will continue to exist for those that need them. Plus it's a far more attractive proposition than letting China and its regime run riot over the world 😄
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Dalio did tons of research on China and it is well documented. I do agree that China is not to be ignored but a full empire? Not sure about that. They did burn their fleet of ships back in the day and wanted nothing to do with us, I kinda respect that. I value his input but I will make up my own mind, and so should everyone else IMHO. This is an interesting educational series for sure. Thanks for bringing it up.
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I liked it. You can tell he's been thinking a lot about this problem for many years.
I might disagree with his views on China. He generally thinks they will be the next superpower. I'm not so sure
Also, his understanding of Bitcoin seems quite limited. He has some "just in case" but I think its only 1% or less
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I don't think we will hear a lot of Bitcoin talk coming from him (Dalio). He lives and dies with fiat and he probably doesn't care. That's OK. We will win this war by attrition, people who read these words (you and me here) will live in a hybrid world of fiat and bitcoin. Our kids and our kid's kids will have better alternatives. SO teach your kids about Bitcoin :-) That's all we can do for now.
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250 sats \ 1 reply \ @gmd 30 Oct 2023
I'm not a fan, but only because it scares me how plausible it all seems...
It's wannebe-smart. It's the kind of thing to say that sound smart to simple-minded people.
And I think Ray Dalio does this on purpose. He knows.
Edit: basically the same strategy like the book "Guns Germs and Steel"
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He's clearly done the leg-work and studied a lot of history. Although it may be considered a simplification, given he doesn't share his calculations and full analysis, the work is a definite net positive.
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He found a few interesting parallels in history and spins a narrative around it. It's a compelling story, I'll give you that. But a few pi-hacked correlations aren't causations. That's not what evidence is.
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I don't think that's necessarily to the detriment of the argument. This is how knowledge is created in fields which are difficult to quantify, but I appreciate your critical outlook on his method. Either way, his writing is very clear, founded on historical data, and aims to offer a practical understanding of the complex contemporary world. My qualm would be that the view that human history is bound to keep repeating is somewhat cliché, as I'd like to believe we can learn from it. Naive, yeah, but maybe books like these are the means to just that. Doubt US policy makers read it.
I would also argue he does go as far as he can to present his "data" in a systematic manner to infer some tangible knowledge. In an era when we're so used to most science being based on mathematics, the only evidence / repeatability of an experiment / theory / hypothesis (which is what his model is) lies precisely in how much you believe his method, and it's not an easy text to argue with given his conciseness.
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lol did you read the book?
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2/3 done. slow at first but the empire cycle, comparisons and historical background is very useful and interesting to learn about. also reminds you that there are so many factors playing through out society and the world. especially the growing wealth gap that's kinda built in the system and needs to be delt at some point.
Ray writes that basically the only way for an empire to keep the relative power longer is to be more productive and not get complacent and decadent. fair point. but i think it's a pretty crazy proposition to think that you always have to work harder and smarter to deal with the money printing.
bitcoin seems a more balanced system. still prob won't solve global competition for wealth and power.
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I haven't read it yet, but it is on the list since I saw the video when it was released.
Perhaps this will be the post that makes it jump to the top of the list.
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He doesn't mention Bitcoin at all. I searched the books text. But overall it is a decent book.
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I’ve watched the video a couple times. Some of the theory seems to fall in line with the fourth turning thesis by Neil Howe and Bill Strauss
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What do you care what fiat assholes want to tell you? Maybe start there
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It's a well-funded book on history. I don't find your attitude particularly constructive, maybe try the 5-minute video first?
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Wouldn't waste your breathe on this troll. Contributes nothing at all to any conversation
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Lol, keep "conversing" -- your words are likely no different than the "voices" of those who "believe" in voting. Keep simping and dignifying a culture of weakness and subservience to fiat authorities paid to manipulate and brainwash you.
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If I were to meet you from where you're coming from, I'd keep in mind that Bitcoin wasn't created from nothing – it is part of history, and it was created for a purpose. Understanding Bitcoin involves understanding what preceded it, and why it exists. The content I shared gives great insight into both, in a digestible format, and doesn't really argue for anything that you are going against here. We're in the same boat, know your enemy etc.
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Ray Dalio is basically pro-CCP. He's a fiat piece of shit who commands attention in people's minds only due to fiat -- he is not smart enough to be a historian philosopher, and under capitalism, would probably not have accomplished enough to gain any notoriety. I don't care to engage in any dialogue that begins with "Ray mentions...", even though he will inevitably touch on things that could merit discussion from time to time.
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