Review — Principles for Dealing with a D ...

Review — Principles for Dealing with a Disappointing Ray Dalio and his “Changing World Ord

Apr 11, 2022

I read Ray Dalio’s “Changing World Order.” I mean, a billionaire with an amazing research team must have insights right?

His insights are good, I mean, his financial knowledge is super good, and I’m not in position to fault him. It’s just… he clearly wants to say something about the society/the West he’s in.

I find that after a while, people tend to moralise that they can learn from Big History, and it’s that usually countries and empires need to work harder and be more competitive in terms of lowering their wages so that they can become more attractive to investors and companies. In the end it sounds a lot like a pro-corporate spiel, a kind of excuse for corporate power to have more control over workers for the sake of “competitiveness.” There’s also often a romance for industrialism and manufacturing.

Of course, the United States and the West could do with some re-industrialising, but they can’t re-industrialise in the old “big industrial” way because of the global market place. It requires governments to invest in education at all levels and then to create manufacturing that is relevant for their knowledge set — for advanced countries it means doing more advanced manufacturing, research-intensive activities. They are not going to beat China or Bangladesh for labour-intensive activities.

As for the financing aspects, I mean, he is the world’s biggest hedge fund manager and being reasonably successful. But there are arguments in other directions that suggest that the debt that’s held by Japan and the West and the United States are less dangerous than they look, and it does look like everyone will eventually raise taxes for more investment post-COVID recovery.

CWO also ignores the effects of climate change. That’s understandable, given that environmental history is really a lot more recent, and the area of attribution has really only gotten more established in recent years. It is turning out that some of the turning points in history, such as the French Revolutions, and even the crowd favourite — the decline of the Western Roman Empire have at least some climate-related signal related to it. I’ve written about the climate gap in socio-political histories/discourses here. If there’s one more point, it would be that the climate signal will become more significant, and that models of the past will be less and less helpful as climatic deviations will become larger. We’ve gone past the thresholds of historical models that they should now be seen as conservative models of what could happen, rather than the standard. Larger deviations, ie., so-called “extreme events”, should be treated as the norm, not “extremes”. CWO has almost no reference on climate change.

The biggest shortcoming of Dalio is that he focuses on the weakness of the West and not on China, but focuses on the strengths of China and not on the West. I find this double-standards in poor taste. I can understand why he might do so — he has a lot of business hanging on access to China’s financial markets, and to talk of China’s weakness could make Bridgewater persona non grata there — so I can see that, but I wished that he had stated there somewhere.

China’s weaknesses are well-documented by other scholars. Ang Yuen Yuen at the University of Michigan had written about “China’s Gilded Age” and the governance-corporate nexus that results in vast amounts of access corruption. Michael Beckley has written extensively about China’s military capabilities. They might be adding several amphibious ships in their navy, but to do a multi-service joint operations in Taiwan assumes that Taiwanese, American, Japanese, and even ROK’s intelligence services are incompetent.

China’s weaknesses are much more pedestrian. An increasing ageing population requires reforms in pension schemes, and with the hukou urban/rural distinction. It requires a dramatic upgrade of the public medical system. It requires a rejuvenation of the urban middle class and the correction of property markets — a lot of things that strike at the heart of China’s political economy and what allows middle-layer bureaucrats in local governments to be promoted.

China’s technoscience endeavours are definitely improving. In quantum, nuclear, AI, the more mundane but just as important everyday-industrial manufacturing, they are at the cutting edge. If the folks at Zhongnanhai don’t do anything disastrous, China will be a leading power, co-equal to US and Europe combined. But their weaknesses are just as serious, and China’s governance is often set on a knife-edge, difficult to balance — sometimes they control too much, and sometimes they do too little.

It is not a given at all that China will be in a position for global hegemony — it’s also too much work given China’s declining potential. In the US and Europe, there was always an acknowledgement of the world in their societies; Europe attracted migrants — though not always in the friendliest sense. China would have to promote itself to her own people as a global power, attracting foreigners, including people who look very different from themselves.

So yeah, I have mixed feelings about Changing World Order. On one hand, a good book, on the other hand, brings together pedestrian intuitions about rise and fall of countries, and more seriously damaging, the lack of objectivity on China and on US/Europe. Disappointing.

Meanwhile, there is a long list of books describing political-economic trajectories.

Michael Beckley’s works are here: and Ang Yuen Yuen’s works are here:

An essay going through 40+ books on the diversity of big history concepts released on 1 January 2022 10am SGT can be found here. Happy 2022!

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