Last week, Ray Dalio emerged from his Cave of Contemplation, where he and the Bridgewater hierarchy sit naked around a fire and drill down to fundamental truths. Upon exiting the sacred precincts of Westport’s Magical Forest, he announced their most recent conclusions in a 4,500-word LinkedIn post that would be the paramount exemplar of TL;DR were it not only the first half of a 7,500-word two-parter, the gist of which is: Even though capitalism’s been pretty good to me, it has been somewhat less good to other people, and that is potentially a problem.
I believe that all good things taken to an extreme can be self-destructive and that everything must evolve or die. This is now true for capitalism…. There has been little or no real income growth for most people for decades…. The income gap is about as high as ever and the wealth gap is the highest since the late 1930s…. The most intolerable situation is how our system fails to take good care of so many of our children. As I will show, a large number of them are poor, malnourished (physically and mentally), and poorly educated…. The health consequences and economic costs of low education and poverty are terrible…. These conditions pose an existential risk for the US.
While this puts the case in perhaps more direct terms than Dalio has done before, the Principled Prophet has gestured in this direction before, notably in the whole book he wrote (not that one) about how economic dislocation leads to social unrest, militarism, fascism and world war. Nor is it particularly groundbreaking stuff: When the likes of Paul Tudor Jones are not only bemoaning the shortcomings of the free market but attempting to do something about it, you know it’s serious.
Unfortunately, it also sort of goes against Joe Kernen’s entire life philosophy (to say nothing of his own much-less-readable but much-more-forgettable book). And fortunately for television viewers, Kernen is too thick to realize he’s brought an intellectual shillelagh to an artificially-intelligent robot fight, but enough of the living embodiment of the Notre Dame mascot to eventually render even Ray Dalio as slack-jawed and incredulous at the spectacle as even friendlier marks such as Wilbur Ross and Leon Cooperman have been rendered before.
His appearance featured a contentious back-and-forth with CNBC host Joe Kernen who argued that a lot of the faults Dalio was citing were not about capitalism but problems with fiscal and monetary policy instead.
“I honestly don’t understand what it is we’re arguing about,” Dalio said at one point.
Ray Dalio in heated debate says capitalism is denying ‘the American dream’ [CNBC]
Why and How Capitalism Needs to Be Reformed (Part 1) [LinkedIn]
Why and How Capitalism Needs to Be Reformed (Parts 1 & 2) [LinkedIn]