The Changing World Order

I believe that the times ahead will be radically different from the times we have experienced so far in our lifetimes, though similar to many other times in history.

Ray Dalio – The Changing World Order

The cycles of history tell an interesting story. That story was told brilliantly in a book titled The Fourth Turning. The authors equate the cycles of our history with the length of a long human life. What intrigued me as a Futurist is the claim by the books authors that our past can indeed predict our future – it’s a compelling argument when viewed through the lens of these historical cycles. That brings me to the quote above. Ray Dalio is the Co-Chief Investment Officer & Co-Chairman of Bridgewater Associates. In a LinkedIn Post from 2020, he describes the importance of understanding history and the cycles that repeat throughout it. Each cycle had swings between happy and prosperous times, and miserable periods that followed. He mentions the most recent analogous time was the period from 1930 to 1945, he follows that with: “This was very concerning to me.”

We increasingly see this use of Applied History – applying insights grounded in the study of the past to the challenges of the present. The lens of this application of history focuses on the study of previous empires and dynasties, like the rise and fall of the British and Dutch empires. These studies provide an understanding of what is currently happening and what is likely to happen. A recent book takes a detailed look at the major empires of the past, the length of their reign, and their eventual undoing. In The Return of Great Power Rivalry, author Matthew Kroenig draws on an extraordinary range of historical evidence and combines it with cutting-edge social science research to explore possible futures. Ray Dalio does the same in a book due to be released this summer titled The Changing World Order. a preview of the topic can be found in his LinkedIn post referenced above. In the power rivalry book, Mr. Kroenig looks at history through the lens of democracy versus autocracy. In his analysis, democracies throughout history have always prevailed when confronted by autocratic empires.

In Ray Dalio’s book (which you can pre-order), he tells a story of the world’s evolution via the events that led the Dutch empire to rise and decline into the British empire, the British empire to rise and decline into the US empire, and the US empire to rise and enter its early decline into the rise of the Chinese empire. That last point would seem to conflict with the conclusions of Mr. Kroenig. An emerging power has threatened a reigning power throughout history. The notion of a changing world order would imply that the world order established post-world war two is phasing out, and a new (perhaps China-led) order is established. It is interesting to note that the major empires, Athens, Rome, Venice, Dutch, Great Britain, and the United States, were all republics. A republic is a form of government in which power is held by the people and their elected representatives. These republics were threatened by autocratic regimes, but always came out on top.

Is China different? Has their study of the failings of these prior regimes informed them to the point where they avoid the same mistakes? More importantly, how does the application of history inform us as to what may happen in the future? Mr. Dalio explores the long-term money and debt cycles, the domestic wealth and power cycle, and the International power and wealth cycle. What foresight can we glean from this? Our decisions will shape our future, and although Mr. Dalio believes the times ahead will be radically different from the times we have experienced so far in our lifetimes, he also says that they are similar to many other times in history. What can we learn from the past? Can we apply those learnings to shape a constructive future? It remans to be seen, in the meantime, I have added Matthew Kroenig’s book to my Book Library. I will add Mr. Dalio’s as soon as I have the pleasure of reading it.

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