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

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 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.

In this book, Dalio presents his model of the rise and fall of "empires". The closer it gets to the present day the more interesting the book is. The last three chapters of the book which deal with the rise of China, the current tensions between China and the US, the United States's alleged decline and Dalio's conjectures regarding the future are five stars. The build up to the final three chapters is decent, although only occasionally riveting: The book is only three stars before the strong close. It is hard to evaluate the merits of Dalio's historical model given that he is only presenting it at moderate depths so as to introduce it all in one volume. The model says that empires rise and fall, no surprise, and talks about the interplay of economic, internal, and external factors that take an empire through the cycle. Dalio also mentions that inside the Big Cycle there are other cycles, and inside those cycles other cycles. He does not, however, go into much detail regarding the sub-cycles. This sounds reminiscent of Robert Prechter's Elliot Waves or perhaps, even, pre-Copernican astrology. Is this a model so loose, like Elliot Waves, that it can be found to fit anything that could happen? Is it falsifiable? Along the way was the validity tested by approaching an empire that there was little prior knowledge of to make "forward predictions" regarding what would happen? Has Dalio merely cherry picked the three examples which best seem to demonstrate the soundness of the model while omitting more problematic cases? There is not enough in this book to do a rigorous analysis. The United States Civil War is a good example of something I had trouble thinking about in terms of the model. According to the model the final stage in an empire's breakdown is civil war or revolution. In the case of the United States, however, the Civil War occurred while the United States was still ascendant: in stage 2 out of 6 with stage 3 being the peak. Certainly there was no debt crisis which caused the Civil War and the United States had little going on in terms of external conflict at the time. So perhaps that could have been taken as a "prediction" that the United States would almost certainly have survived the Civil War in tact? The truth, however, is that the South came very close to winning the Civil War, in the sense of being recognized as independent, according to McPherson's Battle Cry of Freedom. Another thing that I am not sure how to evaluate using the model is the United States after the Civil War and after the Revolution. Although these were periods of rebuilding they do not seem to fit well into Dalio's model. After victory in these conflicts Americans were very magnanimous (as it was later after World War II). Far from being purged those who were on the wrong side of history ended up facing rather little in the way of consequences. So how does this fit into the model? Obviously, there will be some "rebuilding" after a Revolution or Civil War so is the model just saying there will be something which could not not happen? Indeed although the United States was vibrant after the Revolution, the period after the Civil War as described in Richard White's The Republic for Which it Standards seems in decline compared to the Antebellum period. According to Dalio's model, however, the United States was stage 2 rising into stage 3 during this period. Regardless of the merits of the model, which would probably require many in depth books to evaluate fully, there is definitely some good high level overviews of Chinese, European, and American history. There are many interesting charts and statistics thrown in. As mentioned, the close of the book is far and away the best part of it. Dalio describes the cultural differences between Americans and Chinese people and their different outlooks toward governing. Dalio does not seem to be pushing any political agenda, at least not too hard, but rather what he has carefully measured to be objectively true. Although clearly an admirer of much about China, he is also willing to criticize some aspects of China. At the same time, his criticism omits its surveillance state. Looking forward Dalio presents some very interesting charts and statistics regarding America's growing internal conflicts. He even has a graph to show how bad it is now compared to early points in history. Dalio is willing to stick his neck out and quantify what his model is predicting as the probability of civil war in the United States and the probability of military war with China in the next decade. Although very thought provoking overall, one particularly persistent problem throughout the book is that many of the charts are very hard to read. There are graphs with eight different lines with some of the colors very hard to distinguish between. The book also almost never references its sources. Indeed, given how much history Dalio has obviously studied, a bibliography, or at least a list of recommendations, would be very nice. Dalio is very repetitive regarding the inevitable death of fiat currencies through money printing. At the same time he also does provide concrete advise of how to prepare. He gives some definite timelines and the dates are very close. To qualify this, somewhat, however, his company Bridgewater Associates has basically had a "lost decade" using his models to generate any kinds of returns since his departure around 2012. Nevertheless it is interesting to think about whether or the US is on the verge of multiple simultaneous crises.

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.

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.

This is one of the best works on the declining economy and US, associated possible revolution/civil war and later major power war, that is presented in a clear, convincing and replicable way. Kudos to Dalio!! More importantly, the contents of the book can be used to predict upcoming events rather than just perceiving the world on fire with several likely upcoming breakouts (e.g., war with China over Taiwan, the likely loss of our reserve currency, the unsustainable and uncontrollable burgeoning national debt which grows by a trillion USD every 100 days). The author makes a valid case that significant events are moving very rapidly and, for the rest of the 2020s, things are going to get a whole lot worse for the non-elites in our society. Of note, the book was actually written in 2020, published the next year, which then allows the readership now in 2025 to verify the accuracy the observations and predictions. Right on target!

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!

I took Jeffrey Sachs's Globalization class on EDX Academy and somehow stumbled upon this book in between class and finding books around the subject. I watched his youtube video that generalizes the book and was blown away by how my current class I was taking aligned with it. This book is an easy read, and especially for those who aren't well-versed about world history and world economics. I will admit that I do love history, and am learning economics, so this book was a beautiful way merge all these timelines together. The book breaks down and summarizes key points in world history and economics to make points to get the message across each chapter. Font size is great! Might even be considered larger compared to other books. The only thing I wish this book provided was thicker paper in the physical book itself, especially for the hardcover version. If Ray Dahlio ever comes out with a special edition of this with a higher quality paper, I would gladly purchase it for my collection.

Interesting, learned quite a bit. But the repetitions are incredibly annoying- the whole book could have told in less than halve the pages. In addition the book is also a lot about Ray (I do this, I did that), which could be left out. Remarks like: you may want to read previous section again, slowly. Effing patronizing!

For everybody who would like to learn in which circular structure empires and stock markets rise and fail, this book is the best decision to buy. Honestly. The immense focus on detail offers a guideline with which you can easily work to challenge your own investing ideas. No book has shaped my thinking about financial crises and central banks more than this book! This should be standard literature for every student! Part I is the best part one can wish for. It's about how the machine works. Part II concentrates on the history of the past empires - how they rose, what they experienced on the top and which reasons made them fail Part III is a forecast for future development of the biggest key countries.

One of the best books ever written. It details the historical circumstances surrounding the fall of a reserve currency. The conventional view is that once the US Dollar's hegemony ends so too will the world. Yet, the fall of currencies is something that has occurred hundreds of times in the past. If you're interested in this specific question "What comes after the US Dollar? "- you will enjoy this book.

Es una excelente obra porque con un lenguaje fácil y práctico. Ray Dalio transmite su visión sobre cómo funciona la economía y la geopolítica. Esta es la visión de uno de los hombres con más poder real en este momento y obviamente que se sustenta sobre un sólido estudio, análisis e inteligencia que le ha permitido ser uno de los inversores con más éxito del mundo.

Ray Dalio n'est plus a présenter dans le monde de l'Economie. Et ce livre est encore une fois un plaisir à lire. Des recherches approfondies et une analyse (même plusieurs) très poussée permettent de comprendre les différents cycles économiques à travers le temps et donnent les clefs pour comprendre le monde actuel. Beaucoup de graphiques et d'illustrations permettent de visualiser les cycles et les principales crises économiques et financières. Construit en 3 parties bien distinctes, chacune d'elle est expliquée et décortiquée dans un langage clair et compréhensible.