RE: Ray Dalio's Principles For Dealing With The Changing World Order

I also think there always will be one entity that is more powerful than others, but I would say that it's actually rather rare, and maybe even unique – historically speaking – that you have a unipolar world, where one nation can dictate the world order at will (meaning there isn't really a counter balance to their reign).

During the bronze age, it swang between different civilizations being dominant in the Mesopotamian and Mediterranean area – such as Sumer, Egypt, Babylon and Assyria. However the weaker civilizations always ganged up on the stronger one, when they had to, and as such you always had a multipolar power balance. Not to mention all the horse tibes that rode in and wrecked havoc whenever they felt like it. I guess the Egyptians were sort of a sole power during the dark ages between the bronze age and iron age/early antiquity, but they were also super wrecked after the bronze age collapse, and didn't really have much surplus to spend on dominating others.

Even regionally, the Greek, Macedons and Romans had to deal with stuff like Carthage and the Persian Empire, and ofc the Indian and Chinese Empires were a thing back then as well (although no or very limited interaction occured between Rome and the Chinese). During the middle ages, you had the Byzantine Empire and Persians, but Charlemagne and the Franks challanged those, and later the Muslim Caliphates balanced out the fractioned European power base (for the best example of multipolarity, take a look at a map of the Holy Roman Empire 😁 ). That's until the Mongols briefly conquered most of the known world.

The Italian city states and later the Portuguese, Spaniards, Austrians (Habsburgers), Dutch, and briefly the French again, all had their time in the spot light – but they hardly dominated the world. The British Empire came close, but leading up to the first world war, the dominance far from ensured that the British would come out ahead against the up and coming Germans. Even with allies such as France and Russia they had to sacrifice their status as a global world leader to win, after the fine tuned treaties and complex alliances in Europe created by Bismarck broke down with his death.

Dalio consider the debt cycle to be the most important indicator in regards to where we are in these cycles of changing world orders. When you control the world reserve currency (Dutch guilder and British pound before the USD), the temptation to indiscimenatly print always wins – and with the enormous debt that the US has been able to accumulate, we're seeing typical symptoms like the 2008 crash, dramatically increasing wealth disparity, and living standards stagnating or even devolving for normal citizens etc.

One of Dalio's points is that during these transitions, when one entity is attempting to dethrone another, you enter a period with more uncertain and multipolar power dynamics – with highly increased risk of economic collapses, and both for internal and external conflicts.

It always seems counterintuitive to those living through it though, as we got a status quo bias towards thinking the future will always look like the presence, or like our past – and we have all just experienced a unipolar world with the US as the only dominant world power. I guess most of us aren't even old enough to remember much from the cold war, when the USSR made the world more bipolar. So to us, it's as hard to imagine a world without the US as a single world leader, as it was for people to imagine a world without the British Empire during the Victorian era. In reality though, a unipolar world has only occured for about 30 of the last 4000 years or so – we just happens to have been living through this historical abnormality.