{"id":3360,"date":"2020-02-15T02:34:13","date_gmt":"2020-02-15T02:34:13","guid":{"rendered":"https:\/\/www.asadkarim.co.uk\/?p=3360"},"modified":"2020-02-11T13:35:23","modified_gmt":"2020-02-11T13:35:23","slug":"the-system-is-broken-the-billionaire-investor-ray-dalio-who-fears-a-return-to-the-1930s","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=3360","title":{"rendered":"The system is broken\u2019: the billionaire investor Ray Dalio who fears a return to the 1930s."},"content":{"rendered":"\n

https:\/\/www.theguardian.com\/business\/2020\/feb\/09\/ray-dalio-billionaire-hedge-fund-capitalism<\/a><\/p>\n\n\n\n

Ray Dalio, who has a near $19bn fortune, is one of a handful of the 0.01% to go public with concerns about the system that created that wealth
\nRay Dalio, the billionaire investor, has just released his first children\u2019s book. It\u2019s a bedtime story he hopes will inspire a new generation of entrepreneurs and leaders. There are other stories that keep Dalio awake at night.<\/p>\n\n\n\n

Stock markets have soared in recent years, employers are struggling to find workers, inflation is under control. And yet: \u201cThis period is very similar to that of the 1930s,\u201d he says. \u201cWe\u2019re at each other\u2019s throats when these are the best of times. I worry about the bad times.\u201d
\nDalio, the founder of investment firm Bridgewater Associates, one of the world\u2019s largest hedge funds, and a man with a personal fortune that tops $18.7bn, is one of a handful of the 0.01% who have gone public with their worries about the system that created that wealth.
\n\u201cThe world has gone mad, and the system is broken,\u201d he wrote in a series of viral posts on the issues he sees in the modern economy last year.<\/p>\n\n\n\n

The gap between rich and poor has grown too wide, and most people have not seen real income growth in decades, he wrote. The economy is stacked against those at the bottom. Education, healthcare, the tax system, the prison system and political deadlock have created a situation that presents an \u201cexistential risk\u201d to the US and the rest of the world. It was a searing indictment of the status quo, not least because it came from someone who had benefited from it the most.
\nWhile on the surface the financial numbers of the world economy look good, it is clear that the Great Recession has left a pool of seething resentment in its wake. Nationalism is sweeping the world and the political order is being overturned. As Eric Hoffer pointed out in The True Believer, his book on mass movements, the French and Russian revolutions came not at economic and social nadirs, but as living conditions were improving.<\/p>\n\n\n\n

Dalio hopes, in part, that his latest book can help people at an individual level to address the dilemmas they now face and will always face \u2013 no matter what the political or economic headwinds. An illustrated distillation of his bestselling book Principles for Success, the book offers the life lessons Dalio says helped him not only amass one of the world\u2019s largest fortunes but live a successful life.
\nIn the book, an unnamed hero in a backpack and Pharrell Williams hat negotiates a series of problems, a dark wood, a mountaintop and the loss of said hat, as he chases a blue diamond. While it\u2019s not really clear what the diamond represents (maybe $18.7bn?), it\u2019s really about the journey. Over 157 pages, Dalio shares his insights, a five-point system for assessing our weaknesses and overcoming problems, and somewhat hokey aphoristic formulae like Dreams + Reality + Determination = A Successful Life and Pain + Reflection = Progress.
\nThe Hungry Caterpillar it ain\u2019t.<\/p>\n\n\n\n

He says he wrote the book because friends said they wanted it for their kids. It\u2019s hard to see pajama-clad children clamoring for Principles (\u201cDaddy, is there a follow-up on compound interest?\u201d) but the original Principles has sold over a million copies and been downloaded 3 million times, so who knows? Kids these days!
\n\u201cI think everybody would benefit from writing down their principles, not in an abstract way,\u201d says Dalio. \u201cIt serves a purpose of bringing clarity to your thinking. It\u2019s a joy. I think these principles apply to anybody, whatever their circumstances are.\u201d He is hoping some of his peers will follow suit.
\nBut while he is hopeful that his principles can be a practical benefit at the individual level, Dalio is worried about the future of society those individuals live in. \u201cI think the capitalism system needs to be reformed, because first of all it\u2019s not fair. And secondly, it\u2019s not optimally productive.\u201d
\nThe system that Dalio grew up in, he says, is very different to the one we have today. Born in 1949 the son of a jazz musician, Dalio grew up in the Jackson Heights neighborhood of New York City\u2019s Queens. He had loving parents, attended a good public school and entered \u201ca job market that offered me equal opportunity\u201d.
\nHe began trading at the age of 12 and opened Bridgewater in 1981. By 2005, it had become the largest hedge fund in the world, betting on \u201cmacro\u201d world-shaping economic events. He made investors a fortune correctly predicting the last recession when others bet it would be business as usual.<\/p>\n\n\n\n

To have these things and use them to build a great life is what was meant by living the American Dream,\u201d he wrote last year. Now, Dalio argues, capitalism has broken that promise. The relentless pursuit of profit over people has created a structural flaw that threatens to bring the whole system down. \u201cAll systems should evolve. We all need to evolve. We need to be reformed constantly,\u201d says Dalio.<\/p>\n\n\n\n

He is, of course, not alone in thinking this. Democratic presidential candidates including Bernie Sanders and Elizabeth Warren would be entirely in agreement if they weren\u2019t so against him. The problem for Dalio is whether anyone can hear this message from the mouth of a billionaire. Sanders has said billionaires should not exist. Warren is selling mugs stamped \u201cBillionaire Tears\u201d as she pushes plans for a huge hike in taxes on the super wealthy.
\nDalio won\u2019t talk politics in the specifics, but he says he has a strong aversion to any kind of prejudice, and worries about the vitriol being leveled at him and his Croeseus-like cohorts.
\n\u201cWhen we get into an environment of demonizing people or stereotyping people. It\u2019s like if you call a leader, a billionaire, evil \u2026 it\u2019s almost like saying you\u2019re a poor person, then that\u2019s evil or you\u2019re a Jew or a black person, and that\u2019s evil. I think demonizing a category of people is a very bad thing,\u201d he says.
\nIf we are to find a way out of this mess, he says, it\u2019ll be \u201cwith the collective involvement of people who bring not only different perspectives, but different skills to bear\u201d on the problems.
\n\u201cThis engineering exercise has got to be done with skill so that there\u2019s a redistribution of opportunity and a redistribution so that productivity is increased,\u201d he says. \u201cGenerally speaking, the capitalists focus on increasing the size of the pie, but not on dividing it well. Socialists focus more on dividing it well, not on how to increase its size.<\/p>\n\n\n\n

\u201cI think that we have to work together and this all has to be done in a bipartisan or not partisan way, because I think that right now you\u2019re producing such anger and division and that is our greatest risk,\u201d he says.
\nIt\u2019s a belief that many of his plutocratic peers share, says Dalio. The reaction to his capitalist critique from fellow billionaires has been \u201coverwhelmingly agreement, although not open agreement,\u201d he says.
\n\u201cI\u2019ll tell you what the fear is. It\u2019s not that they will be taxed more. That\u2019s interesting, because I think most people think that that\u2019s their main fear. The main fear is that the system of making productivity work will be hurt,\u201d he says.
\nJust like corporations, billionaires are people too. Dalio is not alone in believing he has an answer to the problem that created him. Donald Trump rode into office on a wave of populist economics. Mike Bloomberg (net worth $60bn) and Tom Steyer ($1.6bn) want to replace him.
\nTheirs is that old, radically conservative, message: everything must change so that everything can stay the same. The question now is whether the system that produced Dalio, his principles and peers can survive the world they created. And if not, what comes after?<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

https:\/\/www.theguardian.com\/business\/2020\/feb\/09\/ray-dalio-billionaire-hedge-fund-capitalism Ray Dalio, who has a near $19bn fortune, is one of a handful of the 0.01% to go public with concerns about the system that created that wealth Ray Dalio, the billionaire investor, has just released his first children\u2019s book. It\u2019s a bedtime story he hopes will inspire a new generation of entrepreneurs and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3360","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/3360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3360"}],"version-history":[{"count":1,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/3360\/revisions"}],"predecessor-version":[{"id":3361,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/3360\/revisions\/3361"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}