Ray Dalio, founder of Bridgewater Fund (Bridgewater Associates), said in an interview on 2/22 that the United States is facing some type of civil war, with extreme social divisions, widening gap between rich and poor, and even large-scale unrest. He also warned that the development of emerging technologies such as AI will upend the global order for the next 5 years, and governments and societies are not prepared.
The United States is deeply divided and has entered a new form of civil war.
Dalio pointed out that the current political and social environment in the United States has reached a new form of civil war. This type of civil war is not a traditional armed conflict, but a comprehensive confrontation between two camps in terms of values, policies, law enforcement powers, etc., with no room for compromise.
He believes that this kind of division could escalate into violent conflicts, as when the rule of law fails to resolve issues, both sides will resort to more aggressive means. He mentioned policy conflicts like (Sanctuary Cities, note 1), which have already led to intense confrontations between local and federal governments, with the allocation of law enforcement authority also becoming a contentious issue.
( Note 1 Sanctuary City: Some cities or local governments in the United States actively limit cooperation with federal immigration enforcement to protect illegal immigrants from being deported.
The economic and educational disparity is widening, and the polarization of American society is intensifying.
Dalio analysis, the current division in American society is related to the wealth gap and imbalance in educational resources. He pointed out that the current technological development has created extreme wealth disparity, with about 3 million people entering top universities and engaging in high-tech innovation, compared to the total population of 330 million in the United States, they are only a very small elite. On the other hand, 60% of Americans have reading abilities below the sixth-grade level, leading to many labor forces unable to keep up with the demands of the modern economy, exacerbating the wealth gap.
He believes that this situation stems from the combination of globalization and automation, with employment opportunities in traditional manufacturing being outsourced or replaced by machines, leading to the gradual disappearance of the middle class and further deepening social divisions.
The pace of technological development is amazing, and the world will undergo earth-shaking changes in the next 5 years.
When it comes to the impact of technological development such as AI on society, Dalio believes that the next five years will usher in disruptive changes, possibly even more profound than the historical industrial revolution. He mentioned that the current learning ability of AI is already approaching a doctoral level, and it will accelerate its application in various fields in the future, from healthcare, finance to military, and even alter the way humans think.
However, he is also concerned that this will lead to a large number of jobs being replaced, causing more people to fall into the dilemma of ‘unable to create value’. He emphasized that society needs a ‘plan’, but there is currently no clear solution, and the government and businesses do not have a clear strategy to address this change.
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The global economic order is being reshuffled, and the competition between the United States and China is entering an AI cold war.
Regarding the competition between the US and China, Dalio believes that both sides are fiercely competing in the AI race, but it is difficult for either side to dominate completely. He explains that the rapid advancement of AI technology makes it almost impossible to protect intellectual property )IP(, as once the technology is developed, it will quickly be replicated by competitors. Therefore, the competition between the US and China may be more evident in manufacturing capabilities, infrastructure, and application levels, rather than simply technological leadership.
He cited that China is developing rapidly in automation and robot applications, coupled with the most complete global manufacturing supply chain, which may give China a competitive advantage in the practical application of AI technology over the United States. The United States still holds an advantage in top talent, research and development capabilities, and capital markets, but may gradually fall behind in actual production and application.
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Society is extremely divided, yet the government lacks long-term plans.
When it comes to future development, Dalio emphasizes, “The world is entering an extremely uncertain era, with governments lacking specific plans and society lacking response strategies.” He believes that the decision-making system in the United States is currently extremely chaotic, with frequent changes in government and a lack of long-term planning at the leadership level, leaving the United States at a loss when facing economic, technological, and social issues.
Dalio warns that if governments and businesses don’t face up to these challenges, the U.S. could face greater economic and social turmoil over the next five years, which could affect the reorganization of the global order.
The future world is full of uncertainties, and the key is how society coexists and prospers
Dalio finally said that although technological development brings unlimited possibilities, what he is most worried about is not the technology itself, but how humans interact with each other. He pointed out that there have been many eras of technological progress in world history, but if there is a lack of social harmony and fair distribution, these technological developments may ultimately exacerbate conflicts rather than bring progress.
He stressed that society needs to find ways to cooperate and share in order to avoid falling into confrontation and chaos, otherwise even if technological development is advanced, it will not truly improve the overall well-being of mankind.
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This article, Extreme Division in the United States? Bridgewater’s Dailo: The widening wealth gap, US-China AI competition becomes a new form of cold war, first appeared in Chain News ABMedia.
