The World Order Has Collapsed: Insights from Carney and Dalio
We have already heard the speech of Canadian Prime Minister Mark Carney, an intricate and detailed address. What stood out the most were the true emotions it conveyed. There was nothing political about it. Since then, many astute leaders have come forward and, in one way or another, echoed the ideas that Mark Carney expressed.
Meetings are being held all over the world, conferences of major countries. The main message they are all emphasizing is that the world order "no longer exists."
Ray Dalio published a quite long article titled: It's Official: The World Order Has Broken Down.
The article dives deep into what is happening and outlines the five stages that typically occur before a war.
At the recent Munich Conference, all the countries present, even Rubio from the United States, agreed on the same points. The rules-based world order no longer exists, and America bears responsibility in this.
Macron of France agreed, and now France and Germany are forming an alliance on their nuclear programs.
Dalio’s article is important because it explains the five stages of war that occur before wars actually happen. The accompanying graph illustrates the same. The historical parallels to his five stages are accurate and are tracking closely with current events.
The international order follows the law of the jungle much more than it follows international law. There are five major kinds of fights between countries: trade/economic wars, technology wars, capital wars, geopolitical wars, and military wars. Let’s begin by briefly defining them.
Trade/economic wars: Conflicts over tariffs, import/export restrictions, and other ways of damaging a rival economically
Technology wars: Conflicts over which technologies are shared and which are held as protected aspects of national security
Geopolitical wars: Conflicts over territory and alliances that are resolved through negotiations and explicit or implicit commitments, not fighting
Capital wars: Conflicts imposed through financial tools such as sanctions (e.g., cutting off money and credit by punishing institutions and governments that offer it) and limiting foreign access to capital markets
Military wars: Conflicts that involve actual shooting and the deployment of military forces
Every world power has its time in the sun,
Still, the cycle needn’t transpire this way if countries in their rich and powerful stages stay productive, earn more than they spend, make the system work well for most of their populations, and figure out ways of creating and sustaining win-win relationships with their most significant rivals. A number of empires and dynasties have sustained themselves for hundreds of years, and the United States, at 245 years old, has proven itself to be one of the longest-lasting.