Principles for Dealing with the Changing World Order

[Michael_00005]

Has anyone watched the YouTube video by Ray Dalio called "Principles for Dealing with the Changing World Order"?
https://www.youtube.com/watch?v=xguam0TKMw8

Seems like a very interesting topic, and it would be interesting to hear what other's think of it, or even if anyone plans for the coming changes. But I suppose planning for change really depends on where you think the global economies fall in the cycle.

The video is based on the premises, that history repeat itself, and in studying history common patterns or cycles repeat. This is in regards to past and present world powers and in looking at current events it's possible to see where we are at in the current cycle. For those interested in history it's likely we see patterns repeat in all walks of life. For example with new rising growth companies who become market leaders, and eventually cycle through different stages and eventually become bloated and overly bureaucratic.

The video runs along the same line of a post I made last year:
viewtopic.php?p=248830#p248830

[bostonimproper]

Dalio seems to be suggesting that China will be the next dominant superpower. I think that’s certainly plausible. Two big omissions that would counter the narrative though:

• Debt: he focuses on national debt as a sign of a falling dominant power, and China’s total debt to GDP is about as bad as the US and Europe. And while their economy is growing faster, so is their debt ratio. Maybe we get another Bretton Woods. Then the question is what gets the Yuan adoption over the USD/Euro (building out more wealthy middle class, more dominant on the international relations scene, etc).
• Demographics: There are as many 55-59 year olds in China as there are 0-4 year olds. China lacks the robust pension system of the west, which means that a lot of taking care of older relatives who can no longer work will fall within (small) families, which drags on both discretionary consumption and number of children people have moving forward. So bad now and likely to persist.

[jennypenny]

Dalio has been pushing China's Common Prosperity idea for a while now and Bridgewater is heavily invested in China. I'm not saying Dalio is wrong (or right), but the sooner the transition occurs, the more money he stands to make. Convenient.

[Sclass]

I enjoyed the video. Though I wonder if China will get kneecapped. I can remember as a kid how Japan was poised to take over. Many of my classmates took Japanese in school. Now the kids are learning mandarin.

I think anything can happen. 20/20 hindsight in the video.

[Humanofearth]

China already is the strongest nation-state in terms of magnitude of force employable. India going to eclipse Europe and US soon, think its growth is overlooked. But the internet is larger than any nation-state and growing faster than any will. It may make them more obsolete than is fathomable. As the printer did to the church via printing information, it’s doing to the state via printing too much garbage as people get a life raft.

[zbigi]

China already is the strongest nation-state in terms of magnitude of force employable. India going to eclipse Europe and US soon, think its growth is overlooked. But the internet is larger than any nation-state and growing faster than any will. It may make them more obsolete than is fathomable. As the printer did to the church via printing information, it’s doing to the state via printing too much garbage as people get a life raft.

How can Internet make nation states obsolete? How would the post-nation-state world look like?

[Ego]

How can Internet make nation states obsolete? How would the post-nation-state world look like?

Longform answer. https://www.youtube.com/watch?v=KiLUPvUsdXg

[Campitor]

Peter Zeihan has an interesting take on China's economy and how their aging population and 1 child policy will be affecting it. It's worth the listen.

https://www.youtube.com/watch?v=tIFly9M8K80

[jacob]

How can Internet make nation states obsolete? How would the post-nation-state world look like?

The reach of nation states (like demanding taxes) and services provided would be taken over by its replacement (the internet?!?) in the same way the nation states replaced the power of the church. They would not go away as much as simply occupy a much smaller (more ceremonial?) role. Note how the Inquisition or crusades are no longer a thing or how the church no longer force tax collection (tithing).

A good example is how pensions, health care, and even quite comprehensive benefits (child care, laundry service, ...) for many people have been taken over by corporations. Indeed some corporations have revenues that are larger than the GDP of some nation states. Some corporations are also transnational and so the ability to move around in the world is more conditioned on being an employee of such a company than a citizen elsewhere. With visas readily provided, nationality is no longer as relevant as long as one remains an employee. Some corporations also field private armies or provide their own security (e.g. gated communities). Indeed some corporations pay off enough politicians[' election campaigns] to essentially set the policy of their nominal governments.

Depending on which nation state you look at this power is shared somewhere between 30/70 and 50/50.

In some corners [of the internet] it is believed that internet tools will be able to displace corporations in the same way, e.g. using crypto, micro-trust networks, citizen journalism, and the likes. To see how close we are to such a situation, I'd say "follow the calories" to see how they're currently produced.

[white belt]

Peter Zeihan has an interesting take on China's economy and how their aging population and 1 child policy will be affecting it. It's worth the listen.

https://www.youtube.com/watch?v=tIFly9M8K80

My initial impression after watching is that Zeihan is using outdated frameworks to project into the future.

Demography does still matter, but I think in the near future we will see a decoupling of population size from economic output because things like energy supply/security and technical capability will matter much more. China will undoubtedly have energy security issues, but they are also working furiously to secure energy supply. Also keep in mind that the USA has only "solved" its demography problems because it still accepts a lot of immigrants and there is nothing stopping China from doing the same (apart from the xenophobia of the CCP, but they've proven extremely pragmatic over the last 40 or so years). The entire developed world is facing the exact same demographic issues.

Aircraft carriers as a measure of naval capability is also outdated. Every US aircraft carrier can be destroyed anywhere in the world with a hypersonic missile (China has those). Securing trade routes does matter, but massive WWII era ships designed to overcome aircraft fuel limitations do not play anything other than a symbolic role in the 21st century.

[jacob]

... destroyed anywhere in the world with a hypersonic missile ...

Side question. I understand the technological differences, but otherwise why does it matter (strategically or tactically) whether a missile is hypersonic or ballistic? Conventions? Treaties? Potential misunderstandings?

[white belt]

Side question. I understand the technological differences, but otherwise why does it matter (strategically or tactically) whether a missile is hypersonic or ballistic? Conventions? Treaties? Potential misunderstandings?

https://missiledefenseadvocacy.org/miss ... -missiles/

The advantage of hypersonics is that they are virtually impossible to stop with existing missile defense systems. Hypersonics travel quickly, but the key advantage is that they can change direction in flight. Since most missile defenses are built on projecting where a missile will be and attempting to intercept it, the ability of a projectile to change direction in-flight renders them ineffective. Hypersonics can be fitted with pretty much any payload, to include nuclear.

Ballistic missiles don't travel as quickly and can't change direction in flight, which makes it easier to track and defend against them.

Asymmetric systems are useful to pay attention to in 21st century warfare. A hypersonic is asymmetric because it can destroy targets that have a much greater strategic/financial/tactical value than it costs to produce the missile. Other asymmetric examples are MANPADs, IEDs, space capabilities, and cyber capabilities. I can shoot a $50k round to destroy your multi-million dollar aircraft. I can pay a team of hackers $100k to cause millions of dollars in damage. This is why it's a such a big deal that Ukraine is still getting Javelins and Stinger missiles.

[Campitor]

Side question. I understand the technological differences, but otherwise why does it matter (strategically or tactically) whether a missile is hypersonic or ballistic? Conventions? Treaties? Potential misunderstandings?

Since the hypersonic missile is faster, the abort signal to recall/destroy it is a much tighter window. It's basically a "no going back" scenario depending on the distance involved. Supposedly the US has been working on countermeasures and also developing their own hypersonic missile.

PS - A Scientific American perspective on hypersonic weapons: https://www.scientificamerican.com/arti ... c-weapons/

[Kriegsspiel]

Our old buddy, John Michael Greer, wrote an superb (fiction) book that involved missiles and US supercarriers, Twilight's Last Gleaming. It was the precursor to Retrotopia, if that's enough foreshadowing for you

But in reading all of Zeihan's books, his whole spiel with China is that if we (the US) simply stop protecting trade routes (mainly for oil from the Middle East), then China won't be able to get energy and food and they'll starve. Because they don't have enough of a navy to defend the route along all their enemies, and they can't do it with missiles. The concept seems solid enough.

[white belt]

But in reading all of Zeihan's books, his whole spiel with China is that if we (the US) simply stop protecting trade routes (mainly for oil from the Middle East), then China won't be able to get energy and food and they'll starve. Because they don't have enough of a navy to defend the route along all their enemies, and they can't do it with missiles. The concept seems solid enough.

The USA benefits immensely from Chinese imports, so I'm very confused when people casually throw out ideas like that without considering the nth order effects. Such a move would cause a collapse in global trade, although eventually it might cause in increase in regional trade. Such a move would also cause a collapse of both Chinese and American societies as we know them. The USA and China are economically intertwined for better or for worse (e.g. 97% of US antibiotics come from China).

[Kriegsspiel]

Zeihan's stance is that the US is the least-dependant country WRT global economics. He cites the very low levels of imports and exports as a % of GDP in, I believe, The Accidental Superpower. That was written in 2014, but a quick check on wikipedia shows that the US still has one of the lowest exports/GDP ratios. We're also at the bottom in imports/GDP. He goes into more detail in his books about why he thinks certain countries (the USA, Argentina, etc) would come out ok in this (currently) hypothetical situation, and why other countries are destined to be not ok.

[prudentelo]

Be nimble. Most people aren't so the 'outs' are often obvious but most people cannot use them or prefer to pretend nothing is happening to avoid justifying large personal costs and disruptions.

Bear in mind that the things that most people thought would end the world/kill them/reshape the political order ten years ago are mostly forgotten now and basically didn't happen.

[Mister Imperceptible]

Some corporations are also transnational and so the ability to move around in the world is more conditioned on being an employee of such a company than a citizen elsewhere. With visas readily provided, nationality is no longer as relevant as long as one remains an employee. Some corporations also field private armies or provide their own security (e.g. gated communities). Indeed some corporations pay off enough politicians[' election campaigns] to essentially set the policy of their nominal governments.

IOW, “the American East India Company.” To buy a share of the SP500 is to become an AEIC shareholder.

The USA benefits immensely from Chinese imports, so I'm very confused when people casually throw out ideas like that without considering the nth order effects. Such a move would cause a collapse in global trade, although eventually it might cause in increase in regional trade. Such a move would also cause a collapse of both Chinese and American societies as we know them. The USA and China are economically intertwined for better or for worse (e.g. 97% of US antibiotics come from China).

A collapse of the American East India Company. Which while causing tremendous short term pain for Americans, would obliterate the AEIC. America would recover. What confuses Americans is that when the AEIC goes to the doorstep of Russia or China and demands tribute, they do so under the same flag Americans call their own.

Where folks in the West stand on foreign policy really boils down to whether they are first a major shareholder in the American East India Company, or if they are first a laborer competing with the global pool of laborers under the dominion of the AEIC.

[jacob]

Bear in mind that the things that most people thought would end the world/kill them/reshape the political order ten years ago are mostly forgotten now and basically didn't happen.

There's a fairly off-putting human tendency to only focus on bad things when it happens to people who look like themselves while ignoring the exact same bad things when they happen to people they don't identify with, e.g. poor brown people on the other side of the world. People are better at creating ethno- or sociocentric narratives ("If it can happen to someone who looks like me, it could happen to me.") than understanding a statistical baseline or caring about the world situation or people suffering in general. For example, there are now 2-3 million Ukranian refugees. However, this is relative to 6-7 million refugees from the Syrian war and 27 million total refugees in the world due to all conflicts. That's the statistical baseline. The different standard of global caring or interest generated is obvious.

To apply the principles, embodying the statistical trend is more useful than embodying the sociocentric narrative. However, turning formal thinking into concrete behavior seems quite rare. Worse, it's very hard to communicate the conclusions of such thinking until people see a concrete example they find personally relatable.

[prudentelo]

Maybe you mean it differently, but I don't believe what is happening to Ukraine can happen to me. No comment on whether I am brown or what part of the world I am living in.

That is because I live in an armed country with inoffensive neighbors rather than I ignore examples of people who look different to me (clowns, for example).

The comment was in context for this forum and the internet generally. I dont know what this forum thought decade ago but the internet doomsphere has certain (quite specific) themes that change gradually with time and the ones of ten years ago mostly didnt happen in sense of touching those doom-speculators personally or at all.

Historically doom is real but often unexpected in form.

Again I may misunderstood your comment. I agree that we should look at data and try to get objective trends, rather than looking at narratives (including those of groups we trust)