Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

by Ray Dalio

Values Gaps. While wealth matters, it is not the only thing that people fight over. Values (e.g., in religions and ideologies) matter a lot too. 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. This dynamic is driven by the fact that people tend to coalesce into tribes that are bound together (often informally) by the magnetism of their members’ commonalities. Naturally, such tribes operate with each other in ways that are consistent with their shared values. When under stress, people with greater values gaps also prove to have greater conflict. They frequently demonize members of other tribes rather than recognizing that those other tribes, like themselves, are simply doing what is in their self-interest in the best ways they know how.