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

by Ray Dalio

US? As I explained in Chapter 11, our measures suggest that it is very roughly 70 percent through its big cycle. Can it slow or reverse its relative decline? History shows us that reversing a decline is very difficult because it requires undoing so many things that have already been done. For example, if one’s spending is greater than one’s earnings and one’s liabilities are greater than one’s assets, those circumstances can only be reversed by working harder or consuming less. The question is whether we Americans can face our challenges honestly and adapt and change to meet them. For example, while the capitalist profit-making system allocates resources relatively efficiently, Americans now need to ask themselves: “Who is it optimizing these efficiencies for?” “What should be done if the benefits are not broad-based?” “Will we modify capitalism so that it both increases the size of the pie (by increasing productivity) and divides it well?” These questions are especially important to answer in an era when, thanks to new technologies, employing people will increasingly become unprofitable, inefficient, and uncompetitive. “Should we, or should we not, invest in people to make them productive, even when it’s uneconomic to do so?” “What if our international competitors choose robots over people?” These and so many more important, difficult questions come to mind. But while we can’t know for certain whether the splits and conflicts in the US will increase or reverse, we do know...