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Ray Dalio Ray Dalio @raydalio · 1.5K subscribers
Post #165 667
“Also noteworthy: history has shown that during times of great conflict federalist democracies (like the US) typically have conflicts between the states and the central government over their relative powers. That would be a marker to look out for that hasn’t yet arisen much in the US; it’s happening would signify the continued progression toward Stage Six.” Clearly, in 2026 that is now happening and will likely intensify.
“Stage 5 is a juncture in which one path could lead to civil war/revolution and the other could lead to peaceful and, ideally, prosperous coexistence. Obviously, the peaceful and prosperous path is the ideal path, but it is the much more difficult path to pull off. That path requires a strong leader who has the power to galvanize most people [rather than polarize them] and get them to do the difficult things to rectify the problems to make the country strong again. Those leaders, which are the leaders that Plato called “benevolent despots” bring the opposing sides together to do the difficult things that are necessary to reshaping the order so that it works well in a way that most people agree is fair (i.e., is highly productive in a way that benefits most people). There are few such cases in history. The second type is a “strong fighter” who takes the country through the hell of civil war/revolution.”
“Stage 6: When There Are Civil Wars”
“Civil wars inevitably happen, so rather than assuming “it won’t happen here,” which most people in most countries assume after an extended period of not having them, it is better to be wary of them and look for the markers to indicate how close one is.”
“Though there are innumerable examples that I could have examined to understand how they work, I chose what I believe are the 29 most significant ones, which are shown in the following table. I categorized this group into those that produced big changes to the system/regime and those that did not. For example, the US Civil War was a really bloody civil war that failed to overturn the system/order, so it is in the second group at the bottom of the table, while those that toppled the system/order are at the top. These categories are of course imprecise, but once again we won’t let imprecision stand in the way of seeing what we couldn’t see if we insisted on being precise. Most of these conflicts, though not all of them, transpired in the archetypical way described in this section.
“A classic example of a civil war breaking the system and having to build a new system is the Russian Revolution/Civil War of 1917. This put into place the communist internal order that eventually entered Stage 5 in the late 1980s, which led it to attempt to make revolutionary changes within the system—called perestroika (i.e., restructuring)—which failed and were followed by the collapse of the Soviet Union’s order in 1991. The communist domestic order lasted 74 years (from 1917 until 1991). That order was replaced by the new system/order that is now governing Russia, which, after the collapse of the old order, was built in the classic ways described earlier in this chapter in my explanations of Stages 1 and 2.”
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