Ray Dalio, the founder of the world's largest hedge fund, is worried that democracy is being threatened


ray dalio

Business Insider

Bridgewater Associates founder, chairman, and co-CIO Ray Dalio says the state of democracy is nearing pre-WWII levels.


Bridgewater Associates founder and co-CIO Ray Dalio thinks that democracy is being threatened.

In a LinkedIn post published Monday, Dalio said that democracies are healthy when the principles "that bind people are stronger than those that divide them." In turn, "democracies are threatened when the principles that divide people are more strongly held than those that bind them and when divided people are more inclined to fight than work to resolve their differences."

Critically, we've now hit a point where the latter seems to be true, Dalio said.

"Conflicts have now intensified to the point that fighting to the death is probably more likely than reconciliation," he said.


Dalio wrote that "it seems to me that we are now economically and socially divided and burdened in ways that are broadly analogous to 1937," and that "politics will probably play a greater role in affecting markets than we have experienced any time before in our lifetimes," but in a way that is similar to that same year.

The note cites inequality and political divisions, and follows the deadly violence in Charlottesville, Virginia, the weekend before last, and protests in Boston over the weekend. In January, the Economist Intelligence Unit deemed the United States a "flawed democracy," stating that the rise of American populism resulted from extremely low levels of trust in government.

Bridgewater is the world's largest hedge fund, with about $160 billion in assets. While three of Bridgewater's four funds have struggled this year, Dalio has increased his public profile ahead of the release of his first book, "Principles: Life and Work."

Dalio was the lead author of a 61-page Bridgewater research paper released publicly in March that explored global populist movements of the 20th century and compared them to current movements, including the ascendency of President Donald Trump.

The language of the post on Monday reflects the thesis of "Principles: Life and Work," the first of two planned books, the second focused on his economic theories. Dalio runs his life and his business according to the principles that he develops based on his experiences so that they may serve him well in the future.


He applies this view to everything in life, including his concern that while he doesn't expect there to be an economic crisis on the horizon, he fears that increased strife could be leading to government inefficiency and other conflicts.

"I believe that this is a time when it is especially important for us a) to be explicit about what our principles are in order to be clear about what we agree and disagree on, b) to practice the art of thoughtful disagreement, and c) to respect our ways of getting past our disagreements so we can start rowing in the same direction," he wrote.

You can read Dalio's full post on LinkedIn.