- Ray Dalio is the founder and cochief investment officer of Bridgewater Associates, the world's largest hedge fund, with about $150 billion in assets under management.
- Dalio discussed key moments from his career in an episode of the Business Insider podcast "This Is Success." In a bonus segment, he explained why he considered Paul Kennedy's book "The Rise and Fall of the Great Powers" the best book he'd read in the past year.
- He considers it important reading for today, especially in assessing the emerging power shift he sees between the United States and China.
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For the past two years, the billionaire Ray Dalio has been sounding the alarm on the rise of populism throughout the world, and earlier this year he declared that capitalism was facing an "existential threat" in the United States. As the founder and cochief investment officer of Bridgewater Associates, the world's largest hedge fund, which has about $150 billion in assets under management, Dalio is one of the most influential voices in finance.
And in a recent interview for Business Insider's podcast "This Is Success," the investor gave a book recommendation in line with his assessment of the world today, calling it the best thing he'd read in the past year: the Yale historian Paul Kennedy's award-winning 1987 history, "The Rise and Fall of the Great Powers."
"I think we're going to enter a period that's very similar to the 1930s — and I held that view before reading this— but it's definitely the case that there is an arc for countries, just like there's a life arc," Dalio said. He sees the US on a decline and China on a rise, marking the early stages of a change in global order.
"That dynamic has happened many, many times in history and understanding that well, I think, is very important," he said.
Kennedy's book is an investigation of the life spans of the world's great powers since 1500, the start of modern history. Each power was defined by economic hegemony that fell when that country became overstretched by its military presence and spending, which was accompanied by a lack of investment in other aspects of society, contributing to an overall decline. Kennedy noted that the US in 1980 looked to be in a similar position to the United Kingdom ahead of World War I, when it was headed toward falling from its peak.
In short, Dalio is worried about the state of America and believes that inequality should be treated as nothing less than "a national emergency," or else the shifting power dynamics around the world will hit the US especially hard.
Dalio said he had been spending much of his time researching world history of the past 500 years, with a particular focus on reserve currencies (the dominant global currency), to help him make sense of where the world was at the moment and what could be done to mitigate any damage. Of everything he's used in his research, he said, Kennedy's book is the one that's enthralled him the most.
You can listen to the full "This Is Success" interview below:
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