Business Book Review: The Changing World Order by Ray Dalio

Instead of being like ants preoccupied with their job of carrying crumbs in our lifetime, Dalio reminds us to take a broader perspective - and notice world changes.

My Rating: ★★★★

Length: 576 pages
Publisher: Avid Reader Press / Simon & Schuster
Released: 2020

Key Takeaways for Personal Branding

Ray Dalio is the founder of the world’s largest hedge fund and author of the #1 New York Times best-seller, Principles. The Changing World Order draws on his half a century of experience examining markets. The book examines centuries of data on economic and political conditions. Explaining when and how power and wealth have shifted through history among the world’s greatest power players.

Dalio assesses the turbulent conditions of history, in most cases, well before our lifetimes, to predict future trends our generation has never experienced. He believes the world is now seeing a shift that will affect everyone in all countries - and questions whether you’re paying attention to it.

The Bigger Picture

Perhaps the most stark takeaway of Dalio’s profoundly thorough technical assessments is to remember to observe the big picture in which you operate:

“I believe that the reason people typically miss the big moments of evolution coming at them in life is because they experience only tiny pieces of what’s happening. We are like ants preoccupied with our jobs of carrying crumbs in our very brief lifetimes instead of having a broader perspective of the big-picture patterns and cycles, the important interrelated things driving them, where we are within the cycles, and what’s likely to transpire.”

Determinants and Dynamics

Dalio believes that determinants and dynamics that drive events fall into two types:

Inherited Determinants: A country’s geography, geology, acts of nature, weather and disease.

Human Capital Determinants: The way people interact with themselves and others. Driven by human nature and culture.

Human nature determinants include, but are not limited to:

• Self-interest

• The drive to gain and keep wealth and power

• The ability to learn from history

• The Big Multigenerational Psychological Cycle

• Short-term gratification over long-term well-being

• Humanity’s inventiveness

• Culture

• Leadership

Additionally, Dalio identifies wealth gaps and class struggles as determinants. He highlights that values gaps can also matter as much. Much of his data supports why you can’t ignore the impact of 'culture wars’ and rising tensions based on value conflicts:

“History shows us that widening values gaps, especially during periods of economic stress, have tended to lead to periods of greater conflict, while shrinking values gaps tend to lead to periods of greater harmony.”

Quantum Leaps

Even in 2020, Dalio was predicting AI would lead to unprecedented shifts in wealth and power:

“Perhaps most importantly, advances in and the wider use of quantum computing with AI will lead to unimaginable advances in rates of learning, and I believe they will add up to the greatest shift in wealth and power that the world has ever seen.”

While others have made similar claims, as Dalio has assessed centuries of market trends across the world, it’s a noteworthy prediction from the investment legend.

Favourite Quotes

“The times ahead will be radically different from those we’ve experienced in our lifetimes, though similar to many times in history. How do I know that? Because they always have been.”

“Evolution is the biggest and only permanent force in the universe, yet we struggle to notice it.”

“Most people worry about whether their assets are going up or down they rarely pay much attention to the value of their currency.”

The Changing World Order is perhaps one of the most thorough assessments of political and economic conditions you’ll read. The painstaking effort of Dalio and his research team is undeniable. And Dalio bravely dares to have the political conversations others won’t have.

When one does all the hard work of assessing the biggest events, trends and shifts in history for you, the book is worth exploring.

The Changing World Order by Ray Dalio: Available on Amazon.