Saw this interesting Lex Fridman interview of Ray Dalio
Mr. Dalio argues that America’s indebtedness, poor PISA test scores, and the rise of China is evidence of America’s decline. Dalio mentions that education is an essential ingredient for the prosperity of a country, and that China is more educated than the U.S., and over the past decade has matched or surpassed the U.S. in terms of intellectual output such as innovation.
I would argue that IQ is a more important factor than just education. Education is a necessary but still insufficient condition. Turkey’s economy sucks despite having compulsory schooling. The data suggests that per-capita wealth is determined much more so by IQ than education. Or compare even Silicon Valley to Baltimore, Chicago, or Detroit. The only thing that can save Turkey’s crap economy and worthless currency is not education or monetary gimmicks by its president, but nothing short of raising the mean IQ of its population by 10-20 points, and then introducing high-tech industry. The most successful countries economically and in terms of generating real, dollar-adjusted per-capita wealth, even countries with average mean IQs (like the U.S.), is having factions of smart people and ‘smart industries’, that contribute considerably more economic value than the general masses on a per-capita and even absolute basis.
I also do not agree at all about America being in decline, either in absolute terms or relative to China: every singe metric has only showed the U.S. pulling ahead of the rest of the world since 2009 and even more so since Covid, such as GDP, stock market gains , per capita wealth, ‘big tech’, household wealth, innovation, etc. I agree there is considerable social dysfunction internally, but America has always had some degree of internal dysfunction (the Civil War being one extreme example).
Although in some respects America is becoming at least like a second-world country. Not quite empty shelves, but I personally have observed that there is less inventory for certain food items compared to 7 months ago. When something runs out, it does not get restocked anymore, which is annoying. Unpopular items are not discarded, so you end up with an overflow of stuff no one wants. There is more homelessness than ever, in both blue and red states, as well as dysfunction like mental illness and drug addiction, a potent combination (the left-right, blue-red state divide is meaningless in this regard). Red states also have masks required for stores; hardly just a ‘blue state’ thing. The wealthiest parts of the U.S., like Silicon Valley, are pulling up the stock market and the overall economy as measured by GDP, consumer spending, and innovation even if large parts of the country are stagnant or in decline, and a lot of people are not contributing much. For all intents and purposes, these wealthy enclaves, together, form a separate country with a distinct culture and economy.
Lebanon and Turkey are the closest examples of the realization of Mike Judge’s Idiocracy, not necessary the U.S., which is what some people get wrong about the movie. The premise is correct but the country is wrong.
I reject the notion of the cyclicality of history, popularized by Peter Turchin, Jared Diamond, and others. There are no immutable laws, like we see with the physical sciences, that history must cycle that empires must rise and then fall. I think history is probably the least amenable to mathematical modeling of all the social sciences, just owing to how little data there is to work with, and how the conditions that were unique to one empire or civilization do not readily generalize to others. The conditions that made Rome fall tell us little about the future of the U.S.. In spite of the similarities, there are also considerable but important smaller differences. To quote G.K. Chesterton, “In history a thing recurs, but it never recurs quite exactly.”
Dalio calls trump a populist because he appealed to “a large percentage of the population who felt the system was broken.” This is not really true though. Trump was never that popular outside of his loyal base. He probably goes down as one of the most polarizing presidents in U.S. history. His approval ratings were consistently below 40-45%, and he got a smaller percentage of the popular vote than Hillary or Romney. The idea that Trump appealed to this huge bloc of disenfranchised white voters is one of the great Trump myths that endures. Trump’s popularity with whites was not any higher than past Republican candidates.
What a lot of people got wrong about Trump is that at heart he is a pragmatist. He signaled to the base, but in the end he wanted to be liked and deferred heavily to authority and expertise even if it meant reneging on much of what he campaigned on. After being elected, he appointed some of the most qualified people he could find even if some were at odds with his populist campaign. I think also some misread trump. He was never really anti-establishment. He believes that the government should play a large role in shaping economic policy and promoting social stability (ironically, sorta like his arch nemesis Xi Jinping, also discussed in the podcast) . In the 90s he could easily pass as a democrat, in fact he probably was.
Dalio says bipartisanship is important. The Legislative Branch has been relatively divided for many years, and no president since Regan in 1984 has come close to securing a popular vote majority as he did. Autocracies can engender more change, but I think introduce more variance into the system. Part of the reason why China and the U.S. have remained politically stable, more or less, is by having a a lot of redundancy of power. This helps when things are going well, because you don’t want unnecessary variance.
In addition to education, Dalio also attributes China’s post-80s economic success to its embrace of capitalism, and although this helped, he ignores IQ again. Capitalism is hardly unique to China. Yet high IQ countries and regions tend to have more success of concentrating wealth compared to less intelligent regions. Brazil is much poorer than Singapore even though they are both to some extent mixed economies.
Let's start by looking at how the major stock indexes around the world have recovered since 2009.
Shown below, in the order they appear on the chart:
Hong Kong 84%
— Preston Pysh (@PrestonPysh) December 14, 2021