In his new (yeah, so new it is still work-in-progress) book “The Changing World Order”, Ray Dalio explains how the lifecycles of empires have played out historically and predicts the re-rise (“The great rejuvenation“) of China as charted below:
But why?
Can “Why Nations Fail” (by D. Acemoglu and J. A. Robinson) answer that question?
Yes and no. The book offers original insights and rich historical knowledge to elaborate a fairly consistent theory, the theory of successful institutions having to be inclusive (vs. extractive). But to me, it also suffers quite a bit of overfitting and backpropagation, — borrowed the terms from machine learning. Because of such short-comings and lack of predictive power, it is hard to reconcile with what’s being looked forward to in books like “The Changing World Order”.
However, it’s interesting to note: “Why Nations Fail” alludes the genesis of the modern “inclusive institutions” of Britain with the Black Death as the “critical juncture” — the most devastating pandemic of the past millennium that activated the decisive transformation of Britain, from a “serfdom” or extractive society to an inclusive one.
As right now, we are undergoing another unprecedented and perhaps THE critical juncture of this new millennium, could COVID19 be the catalyst of the new world order, predicted by Ray Dalio?
The support of this idea can be seen as an extension of the theory of inclusiveness, or rather the terminology from software engineering: open-source systems vs. closed-source systems.
Are open-source systems necessarily superior?
Think of the case of Apple’s iOS vs. Google’s Android in mobile OS, Matlab vs. Python in programming language or Bloomberg vs. Microsoft Excel in financial analyses.
Obviously, I can’t claim to hold the answer but please allow me to end this train of little random thoughts with a verse from Ecclesiastes:
“For everything there is a season, and a time for every matter under heaven.”
