You can see in the pdf, N=3. For a lot of conclusions, there is nearly no evidence here.
That being said; money printing is an interesting economic tool in that it is an extreme stretch to say it has any positive impact in the real world. That the US is now resorting to it as a strategy for what seems to be every crisis is a very bad sign. Not because it is, in itself, a problem but because it suggests the leadership in several systemically important decision making offices are being challenged and are not capable of answering the challenge.
Nothing survives over a long enough time scale. So the US will fall from grace and fail too. The question really is, is that going to happen within our lifetimes and what effects will we see in the meantime?
Depending on how honest China's economic data is, in theory the interesting part has probably already happened. The Chinese economy is a behemoth. The era where the US was the unquestioned global leader is over and probably the era where they were the most industrially competent nation too. China's policies are probably more material to the global economy right now than the US's, although it won't be easy to tell without a few decades hindsight.
As far as I can tell, if the Russia-China-India axis agree on something there isn't going to be much the US can do about it. That suggests Asian issues are about to become globally significant in a way that they weren't back in the 2000s.
I’ve read the book and found it convincing upon first read. Upon some more research however, it’s not so much. The book looks like an artifact that was created to convince the reader than China will be the new superpower and soon. So conclusion first and data second. It looked like Dalio has cherrypicked data for his arguments. Also, if I remember correctly, there is no mention of geography (US has enemies behind an ocean, China not) and China’s poor demographics.
What is also in China’s way, I think, is that they are busy with getting rid of alternatives. Like any autocratic regime, it’s not about being a good government, it’s about there not being any alternatives. That’s why Jack Ma had to go. And that’s why great businesses get more and more locked-in. Golden tickets for CCP board members. CCP restricting growth like Tencent games. It leads to a very restrictive environment.
So I don’t have the strongest counterarguments anymore, but I do remember that I questioned Dalio’s incentives.
Curious whether other people here have better insights.
Well, the book came out in 2021, prior to recent AI developments - the cutting edge of which are almost entirely in the US. The location where chips are produced is a relevant discussion point to have here though.
In general these “trends indicate the future will be X” analyses aren’t a new thing (see for example Cliodynamics [1.]) and they often underestimate how history can hinge on a few specific decisions. A few different decisions throughout the 90s would have brought Russia into the EU and Western world and not in the direction it’s headed nowadays.
With Dalio specifically, I think it’s a mistake to focus on the nation state as the end-all in political organization. IMO it is better to look at global systems in terms of capital interconnectivity. Various attempts have been made to combat this throughout history by creating closed systems (Napoleon’s continental system or the USSR as prime examples) and they don't work. The states that are open and fluid seem to outcompete ones that aren’t.
Were China attempting to be a USA of Asia, I think they would absolutely become the economic center of the world. But they seem to be headed in the exact opposite direction - they aren’t culturally and economically absorbing nearby states like the USA is, they’re becoming increasingly hostile.
> A few different decisions throughout the 90s would have brought Russia into the EU and Western world and not in the direction it’s headed nowadays.
That's quite a claim. What evidence do you have that a few simple decisions could have reversed the last several hundred years of Russian geopolitics being focused on westward expansion?
Well I didn’t say “simple”, I said a few decisions.
I think if America had acted differently, and if the transition to capitalism had gone differently, it’s not a stretch that Russia would be more aligned with Western Europe. Here’s an interesting answer about how capitalism was implemented in Poland vs. Russia, that is relevant.
Overall it’s a long answer and would also include things like the established bureaucracy in Washington being comprised of Cold Warriors, the US bombing of Serbia (a long time Russian ally) during the Yugoslav wars, and a number of other geopolitical decisions.
And while you’re right that Russian imperial ambitions were their dominant foreign policy, don’t forget that they also looked West for cultural leadership - many of the Romanovs spoke French as a first language, and the existence of Petersburg is entirely a Westernization project. I think it’s more accurate to describe Russian history as a battle between Westernizers and non-Westernizers, and it could have gone the other way very plausibly.
But your own solution brings up the very same problem. You talk about the bombing of Serbia as something that caused this. But the alternative is to not intervene in Serbia because we recognize a Russian sphere of influence there.
That is entirely the root of the problem. Russia wants a sphere of influence in Eastern Europe and that is not acceptable to any of the countries there or NATO allies in Western Europe. The only ways to ally with Russia and Western Europe simultaneously are to either get Western Europe to agree to a Russian sphere to their east (impossible after the USSR fell), or to get Russia to accept that it is no longer a great power and rather simply the equal of France or Germany and therefore not entitled to its sphere of influence as the US is. None of the things you bring up address this fundamental conflict.
Sure I agree that the geopolitics would still be complicated. But I think had a few decisions been made differently, the US could have maneuvered Russia into being an ally against China, in a kind of reverse situation from the Cold War.
> like an artifact that was created to convince the reader than China will be the new superpower and soon
From the interview between Larry Summers and Ray Dalio, March 2022:
> Summers: I think the great American gift, Ray, is the capacity for self-denying prophecy of doom. That if you look at American history, whether it’s what people thought the Cold War was over and Japan had won, whether it’s the missile gap, whether it’s the worries about our democracy during the McCarthyist period, whether it’s the people who say Franklin Roosevelt should have become a dictator at the beginning of the Depression because that was the only way we’d get out of the Depression, whether it was Patrick Henry who said in 1792 that the spirit of the Revolution had been lost. We have these jeremiads of doom and fear, and that is what is the catalyst to change and repair that makes us resilient. And the moment I will worry most for our future is when we become complacent and serene. And as long as there are people like you, Ray, who signal the need for alarm, as long as we have that capacity to become alarmed, I think we will make our way through. But it will not be easy, and we are financially, in terms of polarization and in terms of the international order, in a very challenging place right now. // Dalio: We agree completely. If we have it in us, we’ll be fine.
You're right in my opinion that the book was pretty one-sided and didn't talk about some huge natural advantages the US has as well as some serious liabilities China has no solution for.
He's not the first guy to talk about this long cycle, great powers wax and wane. He's also right that the US is looking weak by certain metrics, chiefly at the rate US debt is accumulating you have to wonder how much longer the dollar can remain the world's reserve currency. But what he didn't talk about in the book and is now being forced to admit is that China's problems are at least as big as America's (if you believe that demography is destiny, China is going to lose in the long game for sure). It's entirely possible for countries to challenge even a weakened hegemon and lose, happens all the time, we may be seeing it happen now.
Russia is good friends with China. USA research and universities are saturated with China Chinese. Good luck with keeping secrets. Russia and China alread able to shoot down F35. Have more nukes. Have hypersonic missiles. Ablr to take out American satelites. Supply chains and raw materials absolutely trounce USA with even NATO support. Saudi now doing non petrodollar. USA 400K troops decimated in Afghan. Dedolarisation is happening making USA dominant in 75% world teansaction now drop below 50% (according to official world numbers and below 40% in unofficial like India/Russia/China trades that not registered in the west). USA couldnt even make phones and TVs properly. Every single American wunderwaffen destroyed by Russian. That is entire Nato against 1 Russia (ok maybe supported by NK Iran and China?). USA natural adavantage? Like isolated? That works against her as well. Just go down to Mexico and have a look. Dominate by Chinese firms all the way to Peru and Brazil. I can pick any Chinese citizens that can speak 2 to 3 languages. It is extremely hard to so to pick Americans like that. In fact depend on locations, you get tons of non-English speakers inside USA. USA couldnt even get enough military recruits since many years. Official military troops are so weak, they have to outsource to security contractors. What about drone game changer? American globalhawks just pissed by SU and crashed. DJI able to outproduce entire NATO drones production by several folds. Military you will find it hard anyone to acknowledge USA now is number 1. Industrially, China is several magnitude of USA. Even so mamy F35 components can be traced back to Russia and China. The titanium and aluminium air frame? And how about gold reserve? Have anyone really believe any gold in Fort Knox? Hint, if you have friends working in Fed, might want to check why so many physical gold being shipped out of USA to Shanghai every month. Even Olympics, you see so many Americans on asthma meds and still lost to Chinese.
It's a matter of timing: China demography is a tenable issue for now, they lack women for some generations, some still sexually active some not anymore, but they survive it, they'll probably hardly survive the aging population after 2035-2050 because automation evolve fast, but definitively not fast enough and they probably fall a bit later due to degradation of schools.
USA have a significant natural margin: they can grow, they can feed citizens, but the scholar decline and the overall technological decline it's hardly reversible, not only Western Europe is in a worse state FOR NOW, but an hypothetical UE+EAEU would solve most UE and EAEU issues, politically, socially, is very unlikely but technically is very possible, and while the EU education is demolished most of world high tech it's still there. So in the very probable III world war it's not so unlikely the EU under the pressure of deep social unrest leaves NATO/the anglosphere, to reunite continental Europeans till the Urals, so opening the gate of Central Asia, the part of the world ALL current superpower look for.
This is very black and white. There are definitely some great schools and universities in Europe.
> So in the very probable III world war
Although we should we alert, let's not consider world war III a done deal. That kind of thinking is exactly how you would start world war III. As a counterargument, there were a lot of proxy wars in the cold war too, but luckily none escalated into an all out war.
> it's not so unlikely the EU under the pressure of deep social unrest leaves NATO/the anglosphere
It is extremely unlikely. Although the US is being quite unreliable (but when have they not? The US also joined the first and second world war late), the NATO block became closer since the invasion of Ukraine. Why would Sweden join NATO in 2024 if they want to leave the NATO?
I think one should look at this as a nudge to think and re-examine our intuitions. The world and its 'order' has changed many times in the past. The leading empires rise and fall every couple of centuries, pandemics and wars devastate the world periodically. That's the pattern. Can we safely assume this time's the exception?
As a fun example, my understanding was that gold has always been the preferred standard for currency. Turns out silver was the far more prevalent standard for almost 5000 years. The switch to gold seems to largely have been caused by Isaac Newton's (yes, that one's) mistake in setting the exchange rate when he was the head of Britain's treasury. How many people don't know this yet exclaim how gold has always been the greatest form of currency?
For this pattern to continue uninterrupted, it seems to me that you’d need to discount the entire technological revolution that’s happened since the early 19th century. That means the internet, nuclear weapons, automobiles, airplanes, international travel, etc. have had no significant effect on the underlying political structure of human society.
That seems like a hugely unlikely thing to me, and it’s probably more likely that we’ll see something very different and unexpected, not a continuation of the pattern.
For one, I would bet more on regions merging into a single loosely connected political entity than on continued divided states battling it out.
Great point. I think that might be in line with the idea if we take it to its full conclusion. Any way it goes, expect change. The meta mistake is assuming the patterns we've seen in the last 10/50/100/1000 years/etc. will continue.
If one looks at the last 10 years, they assume the market only goes up.
If one looks only at the last 50 years, one assumes the US will continue to dominate.
I guess then, what is the mistake if we look only at the last 1000 or 10000 years? Maybe assuming the continued dominance of humans?
HN getting afraid the downtrend will continue after two big red days. If you're wondering about it, just quit, those vesting stock options are probably going to be underwater.
Ray Dalio is a case study of how authoritarianism lures capital and you get billionaire Chinese propagandists.
Around 2020 Dalio was all about China. China is now on par with the U.S. in advanced technologies and will take the lead in the next five years. He downplayed and denied Chinese human rights violations. He called the Chinese government a "strict parent". Dalio was invested heavily in China.
Then Xi starts to violate property rights and becomes a "strict parent" to billionaires who disappear. Dalio is trapped. He talks Chinese propaganda, because his assets can be taken away if he angers Chinese leaders.
Dalio says he still invests in China, but in reality, that's not the case. A significant chunk of his assets is trapped there and he can't move away as he pleases without massive losses.
If you read his LinkedIn essays and know this, it's easy to see how he is just rationalizing his situation.
31 comments
[ 5.3 ms ] story [ 81.4 ms ] threadThat being said; money printing is an interesting economic tool in that it is an extreme stretch to say it has any positive impact in the real world. That the US is now resorting to it as a strategy for what seems to be every crisis is a very bad sign. Not because it is, in itself, a problem but because it suggests the leadership in several systemically important decision making offices are being challenged and are not capable of answering the challenge.
As far as I can tell, if the Russia-China-India axis agree on something there isn't going to be much the US can do about it. That suggests Asian issues are about to become globally significant in a way that they weren't back in the 2000s.
What is also in China’s way, I think, is that they are busy with getting rid of alternatives. Like any autocratic regime, it’s not about being a good government, it’s about there not being any alternatives. That’s why Jack Ma had to go. And that’s why great businesses get more and more locked-in. Golden tickets for CCP board members. CCP restricting growth like Tencent games. It leads to a very restrictive environment.
So I don’t have the strongest counterarguments anymore, but I do remember that I questioned Dalio’s incentives.
Curious whether other people here have better insights.
In general these “trends indicate the future will be X” analyses aren’t a new thing (see for example Cliodynamics [1.]) and they often underestimate how history can hinge on a few specific decisions. A few different decisions throughout the 90s would have brought Russia into the EU and Western world and not in the direction it’s headed nowadays.
With Dalio specifically, I think it’s a mistake to focus on the nation state as the end-all in political organization. IMO it is better to look at global systems in terms of capital interconnectivity. Various attempts have been made to combat this throughout history by creating closed systems (Napoleon’s continental system or the USSR as prime examples) and they don't work. The states that are open and fluid seem to outcompete ones that aren’t.
Were China attempting to be a USA of Asia, I think they would absolutely become the economic center of the world. But they seem to be headed in the exact opposite direction - they aren’t culturally and economically absorbing nearby states like the USA is, they’re becoming increasingly hostile.
1. https://en.wikipedia.org/wiki/Cliodynamics
https://chinai.substack.com/
That's quite a claim. What evidence do you have that a few simple decisions could have reversed the last several hundred years of Russian geopolitics being focused on westward expansion?
I think if America had acted differently, and if the transition to capitalism had gone differently, it’s not a stretch that Russia would be more aligned with Western Europe. Here’s an interesting answer about how capitalism was implemented in Poland vs. Russia, that is relevant.
https://www.reddit.com/r/AskHistorians/comments/ayjz4d/why_w...
Clinton himself also expressed regrets at the way the relationship progressed.
https://www.rferl.org/a/declassified-clinton-memo-russian-re...
Overall it’s a long answer and would also include things like the established bureaucracy in Washington being comprised of Cold Warriors, the US bombing of Serbia (a long time Russian ally) during the Yugoslav wars, and a number of other geopolitical decisions.
And while you’re right that Russian imperial ambitions were their dominant foreign policy, don’t forget that they also looked West for cultural leadership - many of the Romanovs spoke French as a first language, and the existence of Petersburg is entirely a Westernization project. I think it’s more accurate to describe Russian history as a battle between Westernizers and non-Westernizers, and it could have gone the other way very plausibly.
That is entirely the root of the problem. Russia wants a sphere of influence in Eastern Europe and that is not acceptable to any of the countries there or NATO allies in Western Europe. The only ways to ally with Russia and Western Europe simultaneously are to either get Western Europe to agree to a Russian sphere to their east (impossible after the USSR fell), or to get Russia to accept that it is no longer a great power and rather simply the equal of France or Germany and therefore not entitled to its sphere of influence as the US is. None of the things you bring up address this fundamental conflict.
From the interview between Larry Summers and Ray Dalio, March 2022:
> Summers: I think the great American gift, Ray, is the capacity for self-denying prophecy of doom. That if you look at American history, whether it’s what people thought the Cold War was over and Japan had won, whether it’s the missile gap, whether it’s the worries about our democracy during the McCarthyist period, whether it’s the people who say Franklin Roosevelt should have become a dictator at the beginning of the Depression because that was the only way we’d get out of the Depression, whether it was Patrick Henry who said in 1792 that the spirit of the Revolution had been lost. We have these jeremiads of doom and fear, and that is what is the catalyst to change and repair that makes us resilient. And the moment I will worry most for our future is when we become complacent and serene. And as long as there are people like you, Ray, who signal the need for alarm, as long as we have that capacity to become alarmed, I think we will make our way through. But it will not be easy, and we are financially, in terms of polarization and in terms of the international order, in a very challenging place right now. // Dalio: We agree completely. If we have it in us, we’ll be fine.
https://www.politico.com/news/magazine/2022/03/14/larry-summ...
People buy and read the book because they want to know what Ray Dalio's conclusion is. The book answers that question.
If you don't care what Ray Dalio thinks, you should probably read a different book.
Dalio's long-term views still seem to revolve around his big cycle theory but more recently he's admitted that China has some big problems to deal with, including the demographics issue: https://www.linkedin.com/pulse/china-100-year-storm-horizon-...
He's not the first guy to talk about this long cycle, great powers wax and wane. He's also right that the US is looking weak by certain metrics, chiefly at the rate US debt is accumulating you have to wonder how much longer the dollar can remain the world's reserve currency. But what he didn't talk about in the book and is now being forced to admit is that China's problems are at least as big as America's (if you believe that demography is destiny, China is going to lose in the long game for sure). It's entirely possible for countries to challenge even a weakened hegemon and lose, happens all the time, we may be seeing it happen now.
USA have a significant natural margin: they can grow, they can feed citizens, but the scholar decline and the overall technological decline it's hardly reversible, not only Western Europe is in a worse state FOR NOW, but an hypothetical UE+EAEU would solve most UE and EAEU issues, politically, socially, is very unlikely but technically is very possible, and while the EU education is demolished most of world high tech it's still there. So in the very probable III world war it's not so unlikely the EU under the pressure of deep social unrest leaves NATO/the anglosphere, to reunite continental Europeans till the Urals, so opening the gate of Central Asia, the part of the world ALL current superpower look for.
This is very black and white. There are definitely some great schools and universities in Europe.
> So in the very probable III world war
Although we should we alert, let's not consider world war III a done deal. That kind of thinking is exactly how you would start world war III. As a counterargument, there were a lot of proxy wars in the cold war too, but luckily none escalated into an all out war.
> it's not so unlikely the EU under the pressure of deep social unrest leaves NATO/the anglosphere
It is extremely unlikely. Although the US is being quite unreliable (but when have they not? The US also joined the first and second world war late), the NATO block became closer since the invasion of Ukraine. Why would Sweden join NATO in 2024 if they want to leave the NATO?
As a fun example, my understanding was that gold has always been the preferred standard for currency. Turns out silver was the far more prevalent standard for almost 5000 years. The switch to gold seems to largely have been caused by Isaac Newton's (yes, that one's) mistake in setting the exchange rate when he was the head of Britain's treasury. How many people don't know this yet exclaim how gold has always been the greatest form of currency?
That seems like a hugely unlikely thing to me, and it’s probably more likely that we’ll see something very different and unexpected, not a continuation of the pattern.
For one, I would bet more on regions merging into a single loosely connected political entity than on continued divided states battling it out.
If one looks at the last 10 years, they assume the market only goes up. If one looks only at the last 50 years, one assumes the US will continue to dominate.
I guess then, what is the mistake if we look only at the last 1000 or 10000 years? Maybe assuming the continued dominance of humans?
Ray Dalio is a case study of how authoritarianism lures capital and you get billionaire Chinese propagandists.
Around 2020 Dalio was all about China. China is now on par with the U.S. in advanced technologies and will take the lead in the next five years. He downplayed and denied Chinese human rights violations. He called the Chinese government a "strict parent". Dalio was invested heavily in China.
Then Xi starts to violate property rights and becomes a "strict parent" to billionaires who disappear. Dalio is trapped. He talks Chinese propaganda, because his assets can be taken away if he angers Chinese leaders.
Dalio says he still invests in China, but in reality, that's not the case. A significant chunk of his assets is trapped there and he can't move away as he pleases without massive losses.
If you read his LinkedIn essays and know this, it's easy to see how he is just rationalizing his situation.
Ray Dalio convinced everyone to rush into china with investment at the same time as he was exiting rapidly.
The idea that china would be the new world order is ridiculous. China is knees deep in a collapse that will be rather bloody.