Empires rise and fall in predictable ways that follow long-established patterns.
An emerging power invests heavily in education, infrastructure and trade to create wealth, which it protects by strengthening its military. Elsewhere the current leading power grows decadent with rising wealth inequality, in-fighting and fading investments until the emerging power confronts it – and wins. War and revolution start the cycle anew.
That’s among the biggest themes from the high profile 2020 book from Ray Dalio, the founder of one of the world’s largest hedge funds: Principles For Dealing With The Changing World Order Why Nations Succeed And Fail. It’s part of the “principles” series that includes extensive independent research that Dalio’s team maintains here. He intends to look at the longest historical period possible to find patterns that can inform what happens next.
Most pressingly, he argues we’re at the late stage of the American empire, when the United States will continue to decline from its role as the world’s global hegemony and cede that position to China. I’ve been disappointed that much of his coverage has not challenged him on what seems a very big conflict of interest: Dalio is heavily invested in China, an authoritarian country that does not protect criticism, and he has been careful to avoid criticizing the party. In short, the book’s biggest flaws may be that he pulls his punches against China. Still, by using his own determinants and data, he paints a stark picture of unassailable patterns over the last 500 years up until today that looks like this:

Below I share my notes from reading the book for my future reference.
Continue reading The Changing World Order: Why Nations Succeed or Fail