With his latest sophomoric outpourings, Ray Dalio confirms our impression that here we have a man who is undoubtedly a first-class money-maker but who has recently quit that lucrative last in order to display his second-rate intellect by peddling distinctly third-hand ideas. [To listen instead to my podcast on this, please go to CantillonCH at SoundCloud, or search Apple Podcasts and Spotify for ‘Cantillon Effects’]
As the inimitable Charoles Gave recently put it, when men such as Dalio meet in conclave with their kind at Davos or St Tropez, they like nothing better than to indulge in their favourite ‘sport’ of talking solemnly about the ‘The Poor’.
Nor does Ray disappoint us on this score, for his latest outpourings are packed full of such abstractions as ‘inequality’, those ‘left behind’, and the ‘failure’ of what he calls ‘capitalism’ – a voracious, Great White Shark of a beast whose main attributes are central bank mission creep, grubby political venality, and crony corporatism – an apex predator of a system to whom our would-be Sage, now fashionably garbed in sackcloth and face smeared in ashes by way of a rather unconvincing repentance, has served long years as a fabulously enriched pilot-fish.
After a lengthy – if hardly original – rehearsal of all manner of statistics showing that the Little People have somehow not become rich enough to invest in his hedge fund – statistics he could have cut and pasted from a Guardian op-ed or the latest agitprop from the execrable World Economic Forum – he cuts to the chase and outlines his proposed solutions under the bold rubric, ‘What I Think Should Be Done.’
Item one: ‘Leadership from the top’ or, loosely translated, ‘I’ve run Bridgewater, now I want to rule the World’.
As our man puts it:- “So I believe the leadership should create a bipartisan commission to bring together skilled people from different communities to come up with a plan to reengineer the system to simultaneously divide and increase the economic pie better”
Have you ever heard a better encapsulation of a call for technocratic tyranny? Think, Plato’s ‘Republic’ crossed with Fatal Conceit.
But Ray’s only getting started. Next, we get this chilling injunction:-
“To the extent possible, I’d bring… accountability down to the individual level to encourage an accountability culture (Well, DOH!) in which individuals are aware of whether they are net contributors or net detractors to (sic) the society and the individuals and the society make attempts to make them net contributors.”
Public Choice theory – Fuhgedaboudit! How about, ‘Meet the Stasi’? And what exactly is to happen to those whom you label ‘detractors’, Ray? The Gulag? A lengthy spell of re-education in the communal rice paddies? Bell, book, and candle? The rope?
After the hand-waving and pious sentiments, we then plough headlong into a section so illiterately entitled you catch yourself wondering if Ray’s mother tongue is indeed English: “Redistribution of resources that will improve both the well-beings and the productivities (sic) of the vast majority of people”
In his soi-disant role as ‘economic engineer’ (!) our Ray has, he earnestly if somewhat unnecessarily informs us, spent a lot of time thinking about money and how it flows. After that bombshell from a billionaire speculator, he now confesses to wanting to take a chunk of your money and spend it as only he sees fit, since he obviously knows how to do so better than do you, yourself. Well, he’s had more practice at it than most, I suppose.
As for the sheer, Barney-esque question-begging of just how we will turn all the raindrops into lemon-drops and gumdrops – well, Our Saviour here seems strangely uninterested in the minutiae of how all this would work in practice, so he declares himself happy to delegate all such decisions to his bipartisan Brain Trust – his coterie of court astrologers – and let them work it all out for him.
Seemingly oblivious to the fact that such morally-hazardous, inherently ungovernable mutants have been noted hotbeds of corruption and incompetence almost everywhere they have been instituted, he prosaically expresses a wish to “create private-public partnerships” – in other words, to save us from the sins of Corporatism by – encouraging – well, err – even more Corporatism (which, I am sure you must be aware, is just a polite way of saying ‘fascism’, in the original sense of the word)
These monstrous hybrids will, naturally, be “…judged on the basis of their social and economic performance results relative to clear metrics”. Judged by whom, Ray? Metrics decided by whom and on what basis?
Are you familiar with the phrase, ‘Quis custodiet ipsos custodes?’? And, in any case, what’s wrong with trusting the price system and the profit motive once you’ve successfully purged the world of all its accumulated ills? You do still solemnly avow to be a ‘capitalist’, after all.
Further to this, our pocket Zarathustra has an itch to “…raise money in ways that both improve conditions and improve the economy’s productivity by taking into consideration the all-in costs for the society (e.g., I’d tax pollution and various causes of bad health that have sizable economic costs for the society)…” which is to say he’d like to play Enlightened Despot, alternately proffering stick and carrot according to his particular ordering of preferences.
A sop to the restive crowd angrily waving mattocks and pitchforks outside his chateau gates to the flickering of lofted torches and swinging lanterns follows here, as he avows himself ready to “…raise more from the top via taxes that would be engineered to not have disruptive effects on productivity…” Now there’s a piece of very cheap theatre even if its does come with a rather a large potential snag attached in the conditional glibly implied by the last few words.
But, I know: perhaps we could make a start by expropriating zero-added value plutocrats like – well, like you, Ray?
Time to get all macro now, since that’s our Chief Engineer’s metier, after all. We need, he insists:-
“Coordination of monetary and fiscal policies. Because money is clogged at the top (Uh??) and because the capacity of central banks to ease enough to reverse the next economic downturn is limited, fiscal policy will have to be more coordinated with monetary policy”.
So, Big Government is failing, you say? I know! Let’s try a different form of even Bigger Government, shall we? And, yes, I did read my IMF ‘Fiscal Space’ briefing pack and Larry Summers and all the Levy and Peterson Institute types as source material and, no, now I come to think about it, those MMT guys about whom we hear so much aren’t totally off with the fairies, after all.
Lest you worry that sufficient resources might not exist for any of this wish-list actually to be carried out, Dalio does his Alexandria Occluded-Cortex best and simply asserts that, yes of course, there are ‘plenty’ of them to ‘go around’ if only we can stop ‘populists of the left and right’ (i.e., politicians who tend to more closely reflect their electors’ wishes than the Establishment time-servers whose perks they threaten) from ‘stopping skilled and responsible people’ – Ray and his chosen Nomenklatura – from enacting reforms in the name of the Proletariat – sorry, the People – and enacting them whether they democratically express a liking for it or not.
Phew! After suffering through that Lower Sixth Debating Team homily one is left not knowing whether to laugh at the man’s intellectual conceit or to despair that he is being so fawned upon and given such a wide platform upon which to present it.
Whatever the choice, the best we can recommend is that someone in his entourage give Mr. Dalio a copy of Hayek’s 1974 Nobel Acceptance address – ‘The Pretence of Knowledge’ – and keep him away from any and all microphones and cameras until he has read it and shown that he has managed to absorb at least some modicum of its meaning.