CITATIONS, BIBLIOGRAPHY, AND INDEX FOR

PRINCIPLES FOR DEALING WITH
THE CHANGING WORLD ORDER:
WHY NATIONS SUCCEED AND FAIL
BY RAY DALIO

The following pages provide more detailed attributions of sources used in the book. References are made via page
number and opening words of relevant text.

CONTENTS
Note on Data Sources
Notes and Citations
References
Works With Named Author
Works Without Named Author
Databases and Other Sources
Corrections to Initial 2021 Printing

3
4
41
41
55
59
60

NOTE ON DATA SOURCES

In addition to the specific cases, which we call out in the following pages, the internal analyses shown in Principles
for Dealing with the Changing World Order utilize data and information from public, private and internal sources. In
particular, the country power analyses shown throughout Principles for Dealing with the Changing World Order draw
upon thousands of individuals series, which come from a variety of databases and academic sources, too many tolist here in full.
A partial list of notable data sources used includes: Amsterdam Institute for Advanced Labor Studies (ICTWSS
Dataspace), Bank of England, Bank for International Settlements, Barro-Lee Educational Attainment Dataset,
Bloomberg Finance L.P., Clio Infra, Correlates of War, Encyclopedia Britannica, Energy Information
Administration, Gapminder, Global Entrepreneurship Monitor (GEM), Global Financial Data, Global Trade
Information Services, Google NGram Viewer, INSEAD Knowledge, Institute of International Finance,
International Labour Organization, International Monetary Fund, Long Finance Initiative, Maddison Historical
Statistics, National Bureau of Economic Research (Historical Cross-Country Technology Adoption (HCCTA)
Dataset), Organisation for Economic Co-operation and Development, Our World in Data, Penn World Table,
Stockholm International Peace Research Institute, Transparency International, United Nations, Varieties of
Democracy (V-DEM), World Bank, World Economic Forum, World Inequality Database, World Intellectual
Property Organization, and World Values Survey.
Other potential sources for internal analyses include: the Australian Bureau of Statistics, Capital Economics,
CBRE, Inc., CEIC Data Company Ltd., Clarus Financial Technology, Conference Board of Canada, Consensus
Economics Inc., Corelogic, Inc., CoStar Realty Information, Inc., CreditSights, Inc., Credit Market Analysis Ltd.,
Dealogic LLC, DTCC Data Repository (U.S.), LLC, Ecoanalitica, Energy Aspects, EPFR Global, Eurasia Group
Ltd., European Money Markets Institute – EMMI, Evercore, Factset Research Systems, Inc., The Financial Times
Limited, GaveKal Research Ltd., Harvard Business Review, Haver Analytics, Inc., The Investment Funds Instituteof Canada, ICE Data Derivatives UK Limited, IHS Markit, Impact-Cubed, Institutional Shareholder Services,
Informa (EPFR), Investment Company Institute, International Energy Agency (IEA), Investment Management
Association, JP Morgan, Lipper Financial, Mergent, Inc., Metals Focus Ltd, Moody’s Analytics, Inc., MSCI, Inc.,
Organisation for Economic Cooperation and Development (OCED), Pensions & Investments Research Center,
Qontigo GmbH, Quandl, Refinitiv RP Data Ltd, Rystad Energy, Inc., S&P Global Market Intelligence Inc.,
Sentix GmbH, Spears & Associates, Inc., State Street Bank and Trust Company, Sustainalytics, Totem Macro,
US Department of Commerce, Verisk-Maplecroft, Vigeo-Eiris (V.E), Wind Information (HK) Company, Wood
Mackenzie Limited, and World Bureau of Metal Statistics.

3

NOTES AND CITATIONS

10		This study is called “Productivity and Structural Reform”: Please visit economicprinciples.org to see
all the studies mentioned in this book. For this specific study, “Productivity and Structural Reform: Why
Countries Succeed & Fail, and What Should Be Done So Failing Countries Succeed” please go to: https://
economicprinciples.org/downloads/ray_dalio__how_the_economic_machine_works__leveragings_and_deleveragings.pdf.
10 		“Populism: The Phenomenon”: To read this study of mine, please go to: https://economicprinciples.org/
downloads/bw-populism-the-phenomenon.pdf.
11		“Our Biggest Economic, Social, and Political Issue: The Two Economies—The Top 40% and the
Bottom 60%”: To read this study of mine, please go to: https://economicprinciples.org/downloads/
bwam102317.pdf.
11		“Why and How Capitalism Needs to Be Reformed”: To read this study of mine, please go to: https://
economicprinciples.org/Why-and-How-Capitalism-Needs-To-Be-Reformed/.
11		In 2021, more than $16 trillion: Mullen, Cormac. “Negative-Yielding Debt Hits Record $16 Trillion on
Curve Fright.” Bloomberg, August 14, 2014.
16		the US has military bases: Hussein, Mohammed, and Mohammed Haddad. “Infographic: US Military
Presence around the World.” Al Jazeera, September 10, 2021.
18		such as videos you can find online: To see all of my videos, please visit economicprinciples.org.

4

CHAPTER 1: THE BIG CYCLE IN A NUTSHELL

30		GLOBAL REAL GDP PER CAPITA: This chart combines spliced estimates at a country level for
major countries. The analysis for this chart is based in part on data from Maddison Historical Statistics
and from Fouquet, Roger and Stephen N. Broadberry. “Seven Centuries of European Economic Growthand Decline.” Journal of Economic Perspectives 29.4 (2015): 227–244. Specific country series, many found
via Fouquet and Broadberry, include: for the UK, the Bank of England’s dataset, “A Millennium ofMacroeconomic Data”; as well as Broadberry, Stephen, Bruce Campbell, Alexander Klein, Mark Overton
and Bas van Leeuwen. British Economic Growth, 1270–1870. Cambridge: Cambridge University Press,2015. For NLD, van Zanden, Jan Luiten, and Bas van Leeuwen. “Persistent but not consistent: the growthof national income in Holland 1347–1807.” Explorations in Economic History 49 (2015): 119–130. For ITA,
Malanima, Paolo. “The long decline of a leading economy: GDP in central and northern Italy, 1300–1913.”
European Review of Economic History 15 (2011): 169–219. For ESP, Alvarez-Nogal, Carlos and Leandro
Prados de la Escosura. “The rise and fall of Spain (1270–1850).” Economic History Review 66.1 (2013):
1–37. For SWE, Schön, Lennart and Olle Krantz. “The Swedish economy in the early modern period:
constructing historical national accounts 1560–2000.” European Review of Economic History 16 (2012):
529–549. For PRT, Palma, Nuno, and Jaime Reis. “Portuguese demography and economic growth, 1500–
1850.” Paper for “Accounting for the Great Divergence” Conference, The University of Warwick in Venice,22–24 May 2014. For CHN, Broadberry, Stephen. “Accounting for the Great Divergence.” VoxEU (2013);
as well as Deng, Kent and O’Brien, Patrick Karl. “Creative Destruction: Chinese GDP per capita fromthe Han Dynasty to Modern Times,” Working Papers 0063, European Historical Economics Society(EHES), 2014.
30		GLOBAL LIFE EXPECTANCY AT BIRTH: This chart was produced using internal Bridgewater
analysis, based on data from Our World in Data and the UN for the front history, extended back based ondata from Clio Infra and Gapminder. The 2020 point is based on countries that had reported data for theyear as of August 2021.
33		GLOBAL DEATHS BY CATEGORY: This chart was produced using internal analysis, with reference
to Our World in Data, specifically for global deaths from conflicts and based on data from various online
encyclopedias, including Wikipedia and Encyclopedia Britannica.
33		ESTIMATED DEATHS FROM CONFLICT: This chart is based on Bridgewater analysis, based on
analysis of death counts from major conflict events using data from various online encyclopedias, including
Wikipedia and Encyclopedia Britannica.
37		 or example, Tom Brokaw: “Tom Brokaw Explains the Origins of ‘The Greatest Generation’.” NBCF
Nightly News, June 4, 2014.

47		“Exorbitant privilege” is a way: Bernanke, Ben S. “The Dollar’s International Role: An ‘ExorbitantPrivilege’?” Brookings, January 7, 2016.
48		when it had a per capita income 40 times: Welniak, E. J. “Money Income of Households, Families, andPersons in the United States: 1985.” Current Population Reports: Consumer Income 156 (1987): 1–213.

5

48		that of China’s: Friesen, Garth. “Politics, Productivity & Population: Why the Chinese Economy Flew
and India’s Just Grew.” Forbes, May 21, 2019.
48		s tarted borrowing from the Chinese: Lee, Amanda. “US Debt to China: How Big Is It and Why Is It
Important?” South China Morning Post, December 3, 2020.

56		

i t then had two-thirds of the world’s: “The Postwar Drain on Foreign Gold and Dollar Reserves.” Federal
Reserve Bulletin 34.4 (April 1948): 375.

56		it then accounted for: Lundestad, Geir. International Relations since 1945: East, West, North, South. Los
Angeles: Sage Publications, 2018.
56		it then had a monopoly: “Atomic Diplomacy.” Milestones: 1945-1952. Office of the Historian, United States
Department of State.

6

CHAPTER 2: THE DETERMINANTS

69		The Black Death killed: Gould, George M., and Walter L. Pyle. Anomalies and Curiosities of Medicine: Being
an Encyclopedic Collection of Rare and Extraordinary Cases, and of the Most Striking Instances of Abnormality
in All Branches of Medicine and Surgery, Derived from an Exhaustive Research of Medical Literature from Its
Origin to the Present Day. New York, NY: Kaplan, 2009: 891–894.
69		and smallpox killed: “Bugs, Drugs & Smoke: Stories from Public Health.” World Health Organization,
2012: 5.

69		which is more than double: Hedges, Chris. “What Every Person Should Know about War.” The New YorkTimes, July 6, 2003.
87		“speaking softly and carrying a big stick”: Vice President Theodore Roosevelt coined this term at a speechat the Minnesota State Fair in Minneapolis on September 2, 1901.
91		 ese shifts in inequality: Scheidel, Walter. The Great Leveler: Violence and the History of Inequality from theTh
Stone Age to the Twenty-First Century. Princeton, NJ: Princeton University Press, 2017.

92		 s Aristotle said: This is a quotation sourced from Aristoteles. Aristotle Politics. Translated by BenjaminA
Jowett. Mineola: Dover Publications, 2000: IV.11.

94		For example, in France: Neely, Sylvia. A Concise History of the French Revolution. Lanham, MD: Rowman& Littlefield Publishers, 2008: 55–67.

7

CHAPTER 3: THE BIG CYCLE OF MONEY, CREDIT, DEBT, AND ECONOMIC ACTIVITY

116	For example, after the destruction of debt: I discuss this in detail in my book Principles for Navigating Big
Debt Crises. Westport, CT: Bridgewater, 2018, Part 1: 32–34.
117	such as temples in China: See, Mitchell, Matthew. “Borrowing from the Buddha.” Entrepreneurship in
Asia 24.2 2019: 51–54.
119	
W hen this is done well: Please see my book, Principles for Navigating Big Debt (Part 1: 32–34) for a morein-depth discussion on beautiful deleveraging.
123 e Fed announced that plan: “Federal Reserve Takes Additional Actions to Provide up to $2.3 Trillion
Th
in Loans to Support the Economy.” Press release, Board of Governors of the Federal Reserve System, April
9, 2020.

125 s I explained comprehensively in my book: Please see my book Principles for Navigating Big Debt Crises
A(Part 1: 12) for a comprehensive explanation on the policy makers’ four levers.

e.g., in dynastic China and during the Roman Empire: Please see my book, Principles for Navigating Big
127	
Debt Crises for more as well as a detailed case study on Germany’s Weimar Republic (Part 1: 60, Part 2: 5-45).
128	For example, the Old Testament: 25 Lev. 8–13.

8CHAPTER 4: THE CHANGING VALUE OF MONEY132	
Of the roughly 750 currencies: This is based on internal Bridgewater analysis, using data sourced from
Dollar Daze.
134	
R ESERVE CURRENCIES VS GOLD: This chart was produced using internal Bridgewater analysis,
based in part on exchange rate and price data from Global Financial Data.
135

 POT FX VS GOLD: This chart was created from Bridgewater analysis, based in part on exchange rateS
and price data from Global Financial Data.

135	F X TOTAL RETURN VS GOLD: This chart was produced using Bridgewater analysis, based in parton exchange rate, interest rate, and price data from Global Financial Data.
136	
Major exceptions were Japan: Mitchener, Kris James, Masato Shizume, and Marc D. Weidenmier. “Why
Did Countries Adopt the Gold Standard? Lessons from Japan.” National Bureau of Economic Research,
July 2009: 24–27.
136	
Spain, which frequently suspended: Solans, Domingo. “A Farewell to the Peseta.” Speech delivered at the
Colegio de Economistas de Madrid, European Central Bank, February 28, 2002.
136	
Still, between 1919 and 1922: Lopez, Jose A, and Kris James Mitchener. “Uncertainty and Hyperinflation:
European Inflation Dynamics After World War I.” Working Paper, National Bureau of Economic
Research, May 2018.
137	
In 1968–73 (most importantly in 1971): Ghizoni, Sandra Kollen. “Nixon Ends Convertibility of U.S.
Dollars to Gold and Announces Wage/Price Controls.” Federal Reserve History, August 1971.
137

 or example, in the early 1900s: Moen, Jon R, and Ellis W Tallman. The Panic of 1907. Federal Reserve
F
History.

138	A stock market bubble led: Taylor, Bryan. A Century of Chinese Stocks and Bonds. Global Financial Data,
January 4, 2019.
138

 POT FX VS GOLD (1850–1913): This chart was produced using Bridgewater analysis, based in part on
S
exchange rate and price data from Global Financial Data.

139	which I describe in great detail: For a detailed case study on Weimar Germany, please see my bookPrinciples for Navigating Big Debt Crises (Part 2: 5–45).
139	
SPOT FX VS GOLD (1913–1930): This chart was produced using Bridgewater analysis, based in part on
exchange rate and price data from Global Financial Data.

9143	CURRENCY AND GOLD REAL RETURNS OF MAJOR COUNTRIES SINCE 1850: This
table was produced using Bridgewater analysis, based in part on exchange rate, interest rate, and price datafrom Global Financial Data.
144

 EAL RETURN OF GOLD: This chart was produced using Bridgewater analysis, based in part onR
exchange rate and price data from Global Financial Data.

145	
R EAL RETURN OF BILLS: This chart was produced using Bridgewater analysis, based in part oninterest rate and price data from Global Financial Data.

10CHAPTER 5: THE BIG CYCLE OF INTERNAL ORDER AND DISORDER

153	
To get a rich picture of what makes leaders great in different types of circumstances, I recommend
Henry Kissinger’s forthcoming book on leadership: Kissinger, Henry A. Leadership: Six Studies in World
Strategy. Penguin Press, 2022.
156	
GLOBAL RGDP PER CAPITA: This chart combines spliced estimates at a country level for majorcountries. The analysis for this chart is based in part on data from Maddison Historical Statistics and fromFouquet and Broadberry (2015). Specific country series, many found via Fouquet and Broadberry, include:
for the UK, “A Millennium of Macroeconomic Data,” as well as Broadberry, Campbell, Klein, Overton,and van Leeuwen (2015). For NLD, van Zanden and van Leeuwen (2015). For ITA, Malanima (2011).
For ESP, Alvarez-Nogal and de la Escosura (2013). For SWE, Schön and Krantz (2013). For PRT, Palma,
and Reis (2014). For CHN, Broadberry (2013) as well as Deng and O’Brien (2013).
158

 ISTORICAL LIKELIHOOD OF INTERNAL CONFLICT: This chart was produced based on
H
Bridgewater analysis, using in part data from Global Financial Data.

161	
As Aristotle conveyed in Politics: Direct quotation sourced from, Aristoteles. Aristotle Politics. Translated
by Benjamin Jowett. Mineola: Dover Publications, 2000: IV.11.
163	
In the British Empire’s Victorian Age: Adonis, Andrew. “The People’s William.” Prospect, July 4, 2009.
163

I n the German Empire in the late 1800s: Kissinger, Henry A. “Otto Von Bismarck, Master Statesman.”
The New York Times, March 31, 2011.

164	
Prime Minister Lee Kuan Yew successfully: “Lee Kuan Yew.” Encyclopedia Britannica.
164i t is glorious to be rich: This is a simplified version of a quote by Deng Xiaoping, see: Osnos, Evan. “To
Get Rich Is Glorious.” The New Yorker, December 7, 2009.

164i t doesn’t matter whether the cat: This quote is attributed to Deng Xiaoping, “It Doesn’t Matter If a Cat
Is Black or White, as Long as It Catches Mice.” Oxford Reference.

166the notorious Emperor Nero: Levine, Joshua. “The New, Nicer Nero.” Smithsonian Magazine, October 2020.

166

Louis XIV: Meares, Hadley. “How Versailles’ Over-the-Top Opulence Drove the French to Revolt.”
https://www.history.com/news/versailles-palace-opulence

166	
Ming Dynasty’s Wanli Emperor: “The Eternal Emperor’s Road from Glory to Ashes.” China Daily, May
20, 2017.
170	Interestingly, those states and cities in the US: Analysis based on data from a variety of US governmentorganizations and Truth in Accounting’s January 2020 report, Financial State of the Cities.

11170	
has the highest per capita income: Singer, Stephen. “US: Personal Income in Connecticut Highest in the
Nation in 2018, but Growth Lagged.” Hartford Courant, May 26, 2019.
170

largest wealth gap and income gap: Smolnik, Dan. “Income Inequality in Connecticut Towns Has a
Racial Component.” The CT Mirror, September 30, 2020.

170	
one of the largest per capita debt: Financial State of the States 2021. Truth in Accounting, September 2021.
171	Consider this fact: Parthenon-EY Education practice, Ernst & Young LLP. Untapped Potential: Engaging
All Connecticut Youth. Parthenon, 2016: 11.
174	Though it varies from state to state: Turner, Cory. “America’s Schools Are ‘Profoundly Unequal,’ Says
U.S. Civil Rights Commission.” NPR, January 11, 2018.
176	
During the French Revolution: Popkin, Jeremy D. “The Royalist Press in the Reign of Terror.” The Journalof Modern History 51.4 (1979): 685.
176

 iscount Northcliffe, who controlled just under: Thompson, J. Lee. “Fleet Street Colossus: The Rise andV
Fall of Northcliffe, 1896–1922.” Parliamentary History 25.1 (2008): 115–138.

177	
For example, a 2019 Gallup poll: Brenan, Megan. “Americans’ Trust in Mass Media Edges Down to41%.” Gallup, September 26, 2019.
177	
Still, in reflecting on the problem: “Media’s Next Challenge: Overcoming the Threat of Fake News.” The
New York Times, November 6, 2016.
183	Stage 6: When There Are Civil Wars: I owe a debt of gratitude to Crane Brinton, whose book The Anatomy
of Revolution (New York: Vintage Books, 1965) served as a significant influence on my analysis in this section.
185	
A nother is Japan’s Meiji Restoration: “Meiji Restoration.” Encyclopedia Britannica.

12

CHAPTER 6: THE BIG CYCLE OF EXTERNAL ORDER AND DISORDER

196

 ST EUROPEAN DEATHS FROM CONFLICT: This chart was produced internally, based onEanalysis of death counts from major conflict events using data from various online encyclopedias, including
Wikipedia and Encyclopedia Britannica. The estimates shown in the chart are rough and were compiled
by looking at deaths in major conflicts across the most prominent European powers.

202	
But the global depression: Dimsdale, Nicholas H, Nicholas Horsewood, and Arthur van Ruil.
“Unemployment in Interwar Germany: An Analysis of the Labor Market, 1927–1936.” The Journal of
Economic History 66.3 (2006): 778–808.
202	Specific developments and detail: I discuss this period in great detail in my book, Principles for Navigating
Big Debt Crises (Part 2: 4–45).
203	
He privatized state-owned businesses: Bel, Germa. “Against the Mainstream: Nazi Privatization in
1930s Germany.” The Economic History Review 63.1 (2010): 34–55.
203	
He financed the substantially increased: Nathan, Otto. Nazi War Finance and Banking. National Bureau
of Economic Research, April 1944: 5–26.
204	
the unemployment rate was 25: DeLong, J. Bradford. “Slouching Towards Utopia? The Economic
History of the Twentieth Century: XV. Nazis and Soviets.” J. Bradford DeLong, University of California
at Berkeley, February 1997.
205

 hen its exports fell by around 50 percent: Hatase, Mariko. “Devaluation and Exports in Interwar Japan:
W
The Effects of Sharp Depreciation of the Yen in the Early 1930s.” Monetary and Economic Studies (October2002): 144–145.

205

In 1931, Japan went broke: Hatase (2002): 146.

205	
In 1934, there was severe famine: Doglia, Arnaud. Japanese Mass Violence and Its Victims in the FifteenYears’ War (1931–45). SciencesPo, 2011.
207	
In combination with extreme government policies: Applebaum, Anne. “How Stalin Hid Ukraine’s
Famine from the World.” The Atlantic, October 13, 2017.
207	At the same time, internal political fighting: BRIA 4 a The Stalin Purges and “Show Trials”. Constitutional
Rights Foundation.
207	
Soak the Rich Tax: Blakey, Roy G., and Gladys C. Blakey. “The Revenue Act of 1935.” The American
Economic Review 25.4 (1935): 673.
207

top marginal income tax rate: “Income and Wealth Taxes (1934–1941).” Living New Deal, May 7, 2018.

13

207	
versus as low as 25: Compiled using data from Thomas Piketty.
207

By 1941, the top personal tax rate: Compiled using data from Thomas Piketty.

207t he top corporate tax rate: Historical Corporate Top Tax Rate and Bracket: 1909–2014. Tax Policy Center,
December 2, 2015.

207

 rom 1935 until the end of 1936: For more on this, please see my book Principles for Navigating Big Debt
F
Crises (Part 2: 84–90).

207	Specific developments through the Great Depression: I explain this in great detail in my book Principles
for Navigating Big Debt Crises (Part 2: 49–102).
208

I n 1936, the Federal Reserve tightened money: For more, please see my book Principles for Navigating Big
Debt Crises (Part 2: 91).

210	W hile the US remained isolationist: Xu, Guangqiu. “The Issue of US Air Support for China during theSecond World War, 1942–45.” Journal of Contemporary History 36.3 (July 2001): 464.
210	A Japanese soldier struck: Abend, Hallett. “Diplomat Slapped by Tokyo Soldier.” The New York Times,
January 28, 1938.
211	
Earlier in 1940, Secretary of War Henry Stimson: Fuller, Joseph V. (ed.). Proclamation No. 2413:
Restrictions Upon Trade with Japan. Papers Relating to the Foreign Relations of the United States, Volume
II, Japan, 1931-1941, p. 211. Office of the Historian, United States Department of State.
211	
a ll iron and steel to destinations: As quoted in Barnes, Harry Elmer. Perpetual War for Perpetual Peace:
A Critical Examination of the Foreign Policy of Franklin Delano Roosevelt and Its Aftermath. Torrance, CA:
Institute for Historical Review, 1953.
211v ital to the defense of the United States: “Documents Related to FDR and Churchill.” National Archives
and Records Administration.

212	Th is cut off three-fourths: “United States freezes Japanese assets.” History.com, November 16, 2009.
Author’s note: This includes the impact on Japan of other countries joining the US in the embargo.
212	and 80% of its oil: Arima, Yuichi. The Way to Pearl Harbor: US vs Japan. Inventory of Conflict andEnvironment, December 2003.
212	
Japan calculated that it would run: Donovan, Patrick H. “Oil Logistics in the Pacific War: In and after
Pearl Harbor.” Air Force Journal of Logistics XXVIII.1 (2001).

14

213

 EGULATIONS IMPACTING ASSETS: This table was produced using data sourced from Thomas
R
Piketty for top marginal tax rates for the US, UK, and Germany; data for Japan was sourced from
Moriguchi, Chiaki, and Emmanuel Saez. “The Evolution of Income Concentration in Japan, 1886–2002:
Evidence from Income Tax Statistics.” The Review of Economics and Statistics 90.4 (2008): 728.

215	
EQUITY RETURNS IN WWII: This chart was produced using Bridgewater analysis, based in part on
data from Global Financial Data.

15

CHAPTER 7: INVESTING IN LIGHT OF THE BIG CYCLE221	Up until around 1350: For a history of usury laws within religious communities, see Calder, Ryan. “God’s
Technicians: Religious Jurists and the Usury Ban in Judaism, Christianity, and Islam.” European Journal of
Sociology 57.2 (2016): 207–257.
223	
The alchemy of lending: Armstrong, Lawrin D. Usury and Public Debt In Early Renaissance Florence: Lorenzo
Ridolfi on the “Monte Comune”. Vol. II. Toronto: Pontifical Institute of Mediaeval Studies, 2003.
223	
Rules for lending changed: Scott, Hamish M. The Oxford Handbook of Early Modern European History:
1350–1750. Vol. II. Oxford: Oxford University Press, 2015: 520.
225	A LOOK AT ASSET RETURNS ACROSS THE GREAT POWERS: This chart was produced
using Bridgewater analysis, based in part on data from Global Financial Data.
226	
A LOOK AT ASSET RETURNS ACROSS THE GREAT POWERS: This chart was produced
using Bridgewater analysis, based in part on data from Global Financial Data.
227

 HARE OF PORTFOLIOS LOSING X%: This chart was produced using Bridgewater analysis, basedSin part on data from Global Financial Data.

228	
WORST INVESTOR EXPERIENCES: This chart was produced using Bridgewater analysis, based inpart on data from Global Financial Data.
229	w ith global exports up several multiples: Federico, Giovanni, and Antonio Tena-Junguito. “World Trade,
1800–1938: a New Data-Set.” Working Paper, European Historical Economics Society, January 2016: 4.
231

 TOCK MARKET CLOSURES: This chart was produced using Bridgewater Analysis, based primarily
S
on Jorion, Philippe, and William N Goetzmann. “Global Stock Markets in the Twentieth Century.”Forthcoming in Journal of Finance (1999) as well as information from Global Financial Data.

231

 EATHS IN MAJOR VIOLENT CONFLICTS (%POP): Chart produced using Bridgewater analysis,Dbased on analysis of death counts from major conflict events using data from various online encyclopedias,
including Wikipedia and Encyclopedia Britannica.

232	A recent study showed that US: Dash, Jonathan. “How Investors Are Costing Themselves Money”. Forbes,
June 2, 2021.
232effective average federal tax rate: The Distribution of Household Income, 2017 § (2020).

234	USA FINANCIAL ASSETS SHARE OF TOTAL ASSETS: Chart produced using Bridgewater
analysis, based primarily on data from World Inequality Database.
234

 EAL RETURN OF BILL: This chart was produced using Bridgewater analysis, based in part on
Rinterest rate and price data from Global Financial Data.
16

CHAPTER 8: THE LAST 500 YEARS IN A TINY NUTSHELL

244	
Back in 1500: Kissinger, Henry. World Order. New York: Penguin Books, 2015: 3–4.
245	Up until the 1300s and 1400s: Blum, Jerome. The Rise of Serfdom in Eastern Europe. Indianapolis: BobbsMerrill, 1957: 807–836.
246	
As a result of this, the church: Ekelund, Robert B., Robert D. Tollison, Gary M. Anderson, Robert F.
Hébert, and Audrey B. Davidson. Sacred Trust: The Medieval Church as an Economic Firm. Oxford: Oxford
University Press, 1996: 35.
247	
Map of major powers in Europe: This map is a recreation of borders at the time, based in part on the map at thislink: https://images4.fanpop.com/image/photos/20100000/Europe-1550-europe-20101490-2560-1825.png.
248 iteracy rates were extremely high: Smith, Richard J. The Qing Dynasty and Traditional Chinese Culture.
L
Lanham: Rowman & Littlefield, 2015: 38.

248

For example, it had a widespread: Perdue, Peter C. “Empire’s Little Helper.” Foreign Policy, July 4, 2020.

248	Of all the civilizations: Kennedy, Paul M. The Rise and Fall of the Great Powers: Economic Change and Military
Conflict from 1500 to 2000. New York: Random House, 1989: 4.
249	Map of Ming China: This map is a recreation of borders at the time, based in part on a map from Grolier
Online Atlas, available at this link: http://go.grolier.com/atlas?id=mh00012. [Accessed February 2021].
250

i ts capital, Tenochtitlán: Levy, Buddy. Conquistador: Hernán Cortés, King Montezuma, and the Last Standof the Aztecs. New York: Bantam Books Trade Paperbacks, 2009: 106.

252	W hile private and government borrowing weren’t new: Taylor, Bryan. “Birds, Boats, and Bonds in
Venice: The First AAA Government Issue.” The Big Picture, December 20, 2013.
253	
They used their riches: “The Renaissance – why it changed the world.” The Telegraph, October 6, 2015.
254	
K nowledge and ideas spread: Buringh, Eltjo and Jan Luiten van Zanden. “Charting the ‘Rise of the West’:Manuscripts and Printed Books in Europe, a Long-Term Perspective from the Sixth through EighteenthCenturies.” The Journal of Economic History 69.2 (2009): 11–13.
254	
BOOK/MANUSCRIPT PRODUCTION: Chart produced from Bridgewater analysis, based on datafrom Buringh, Eltjo, and Jan Luiten van Zanden. “Charting the ‘Rise of the West’: Manuscripts andPrinted Books in Europe, a Long-Term Perspective from the Sixth through Eighteenth Centuries.” The
Journal of Economic History 69.2 (2009).
255	The Spanish Empire grew: Coleman, David. “Spain.” In The Reformation World. Edited by Andrew
Pettegree. London: Routledge, 2000: 296.

17256	
UK CONSUMER PRICE INDEX: This chart is based off of data from “A Millennium of Macroeconomic
Data.”
256	
SILVER PRODUCTION MEXICO/PERU: Henriques, António, and Nuno Palma. “Comparative
European Institutions and the ‘Little Divergence’, 1385–1800.” VoxEU: CEPR, December 10, 2019.
256	
However they eagerly accepted: “China and Europe: 1500–1800.” China and Europe, 1500–2000 and
Beyond: What is “Modern?”, Columbia University: Asia for Educators.
257	Though not colonizing expeditions: Fairbank, John King. China: A New History. Cambridge, MA:
Harvard University Press, 2005: 138.
257

Yongle’s navy was the largest: Fairbanks and Goldman (2005): 138

257	
ROUGH COUNT OF TRIBUTARY AREAS: This chart was produced using Bridgewater analysis,
based primarily on data from Fairbank, J. K., and S. Y. Teng. “On the Ch’ing Tributary System.” Harvard
Journal of Asiatic Studies 6.2 (1941).

18

CHAPTER 9: THE BIG CYCLE RISE AND DECLINE OF THE DUTCH EMPIRE AND THE GUILDER

268	
Spanish silver coinage came close: von Glahn, Richard. The Economic History of China: From Antiquity to
the Nineteenth Century. Cambridge, United Kingdom: Cambridge University Press, 2016: 307–308.
269	
SHARE OF MAJOR INVENTIONS: This chart was produced using Bridgewater analysis, based ondata from Bunch, Bryan H., and Alexander Hellemans. The Timetables of Technology: A Chronology of the
Most Important People and Events in the History of Technology. New York: Simon & Schuster, 1994.
269	
EMPIRE SIZE: Chart produced using Bridgewater analysis, based on landmass data from the WorldBank and data on historical dates of empire control from various online encyclopedias, including Wikipedia,
Oxford Reference, and Encyclopedia Britannica.
269	
SHARE OF GLOBAL OUTPUT: This chart was produced using Bridgewater analysis, based in part on
data from Maddison Historical Statistics.
270	
Terrible national finances caused: Drelichman, Mauricio and Hans-Joachim Voth. Lending to the Borrower
from Hell: Debt, Taxes, and Default in the Age of Philip II. Princeton: Princeton University Press, 2014: 1.
271	Leadership deteriorated: McLean, John. “Western Civilization: The Spanish Habsburgs.” Lumen
Learning.
271	
SPANISH MARAVEDI COIN: This chart was produced using data from Global Financial Data.
271	
THE RISE: Three sources were instrumental in understanding the detail of the Dutch economy andthe guilder during the time period covered in this study: de Vries, Jan and Ad van der Woude. The First
Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500–1815. Cambridge: Cambridge
University Press, 2010; Hart, Marjolein’t, Joost Jonker, and Jan Luiten van Zanden. A Financial History of
the Netherlands. Cambridge: Cambridge University Press, 2010; Quinn, Stephen, and William Roberds.
Death of Reserve Currency. Working Paper, Federal Reserve Bank of Atlanta: Working Paper Series,
September 2014.
272	The Dutch invented ships: de Vries and van der Woude (2010): 344, 346–347, 357.
273	Dutch literacy rates: This is based on internal Bridgewater analysis. For more specific data, see: Akçomak,
I Semih, Dinand Webbink, and Bas ter Weel. “Why Did the Netherlands Develop so Early? The Legacy of
the Brethren of the Common Life.” ISA Discussion Paper Series, no. 7167 (January 2013): 2; Roser, Max,and Esteban Ortiz-Ospina. “Literacy rate, 1475 to 2015.” Our World in Data, August 13, 2016.
273	
NLD UNIVERSITIES FOUNDED: This chart was produced using Bridgewater analysis, based ondata from Clio Infra.
273	
NLD BOOKS PUBLISHED: This chart was produced using Bridgewater analysis, based on data from
Clio Infra.

19274	NLD SHARE OF MAJOR INVENTIONS: This chart was produced using Bridgewater analysis, basedon data from Bunch and Hellemans (1994).
274

NLD EXPORTS: This chart was produced using Bridgewater analysis, based on data for the 16th to 18th
centuries from Findlay, Ronald, and Kevin O’Rourke. Power and Plenty: Trade, War, and the World Economy
in the Second Millennium. Princeton N.J.: Princeton Univ. Press, 2009.

274	
M AJOR INVENTIONS: This chart was produced using Bridgewater analysis, based on data from
Maddison Historical Statistics and Bunch and Hellemans (1994).
274	
R EAL GDP PER CAPITA (2017 USD): The analysis for this chart is based in part on data from
Maddison Historical Statistics and from Fouquet and Broadberry (2015). Specific country series, manyfound via Fouquet and Broadberry, include: for the UK, “A Millennium of Macroeconomic Data,” aswell as Broadberry, Campbell, Klein, Overton, and van Leeuwen (2015). For NLD, van Zanden and van
Leeuwen (2015). For ITA, Malanima (2011). For ESP, Alvarez-Nogal and de la Escosura (2013). For
SWE, Schön and Krantz (2013). For PRT, Palma, and Reis (2014). For CHN, Broadberry (2013) as well
as Deng and O’Brien (2013).
275	
The voyages across the world: de Vries, Jan and Ad van der Woude (2010): 244; Petram, L.O. “The World’sFirst Stock Exchange: How the Amsterdam Market for Dutch East India Company Shares Became aModern Securities Market, 1602–1700.” Thesis, University of Amsterdam, 2011: 3.
275	The formation of the Amsterdam Stock Exchange: Petram (2011): 2, 18.
276	
DUTCH EAST INDIA CO DIVIDENDS: This chart produced using Bridgewater analysis, based ondata from de Vries and van der Woude (2010).
276

In addition to creating: Hart, Jonker, and van Zanden (2010): 40.

276	In 1609, the Bank of Amsterdam: Hart, Jonker, and van Zanden (2010): 45.
277	
GRAMS OF FINE SILVER PER GUILDER: This chart was produced using data from Hart, Jonker,
and van Zande (2010).
277	
As a result of this system: Hart, Jonker, and van Zanden (2010): 41.
277	
By 1650, it was fairly common: For more, see Hart, Jonker, and van Zanden (2010).
278	
Cardinal Richelieu: Kissinger (2015): 21–23.
279	The Peace of Westphalia reflected: Henry Kissinger’s World Order served as a meaningful influence on myanalysis and understanding of the Peace of Westphalia.
281	Eighty Years’ War: Israel, Jonathan Irvine. Dutch Primacy in World Trade, 1585–1740. Oxford: Clarendon
Press, 2002: 185.

20

281	
The First Anglo-Dutch War: Israel (2002): 207.
281	The Dano-Swedish War: Israel (2002): 219.
281	The Second Anglo-Dutch War: Israel (2002): 270–278.
281

 e Franco-Dutch War: Israel, Jonathan Irvine. The Dutch Republic: Its Rise, Greatness, and Fall: 1477–
Th
1806. Oxford: Clarendon Press, 2007: 824–825

281

The Fourth Anglo-Dutch War: Israel (2002): 402–403.

282	A fter 1688, as Great Britain: Neal, Larry. The Rise of Financial Capitalism: International Capital Markets
in the Age of Reason. New York: Cambridge University, 1990: 17.
283	Additionally, as is classic: de Vries and van der Woude (2010): 618–619.
283	
ACCOUNTS AT BANK OF AMSTERDAM and BANK OF AMSTERDAM HOLDINGS: These
charts were produced using data sourced from Hart, Jonker, and van Zanden (2010).
283	
Because bills of exchange: See Quinn and Roberds (2014).
284	Starting in the 1770s: de Vries, Jan and Ad van der Woude (2010): 126.
284	Available payment data supports: Quinn and Roberds (2014): 13.
285	
Having lost half its ships: de Vries and van der Woude (2010): 126.
285	
the Dutch East India Company: de Vries and van der Woude (2010): 455–456.
285	
DUTCH EAST INDIA COMPANY BALANCE SHEET and DUTCH EAST INDIACOMPANY PROFIT & LOSS: These charts were produced using Bridgewater analysis, based on datafrom de Vries and van der Woude (2010).
285	As the Bank of Amsterdam printed: Quinn and Roberds (2014): 17.
286	That led to the classic: Quinn and Roberds (2014): 16.
286	
BANK OF AMSTERDAM HOLDINGS: This chart was produced based on data from Hart, Jonker,
and van Zanden (2010).
286	
For reference, the full balance sheet: Quinn and Roberds (2014): 16.
286	
The Bank of Amsterdam had no choice: Quinn and Roberds (2014): 17–18.
286	
BANK OF AMSTERDAM LOANS OUTSTANDING: Quinn and Roberds (2014): 34.

21

287

Bank of Amsterdam deposits: Quinn and Roberds (2014): 19, 26.

287	The bank used its holdings: Quinn and Roberds (2014): 19–20.
287	Accounts backed by coins: Quinn and Roberds (2014): 16.
287

In 1971, the bank: Quinn and Roberds (2014): 24.

287

and in 1975: de Vries and van der Woude (2010): 685–686.

287	The Bank of Amsterdam was ahead of its time: Quinn, Stephen and William Roberds. “The Bank of
Amsterdam Through the Lens of Monetary Competition.” Working Paper 2012–14, Federal Reserve Bankof Atlanta Working Paper Series (2012): 2.
287	Historical data suggests: Quinn and Roberds (2014): 26.
288	
DUTCH GUILDER and VALUE OF THE DUTCH GUILDER: These charts were produced using
Bridgewater analysis, based on data from Global Financial Data and Quinn and Roberds (2014).
288	
BANK OF AMSTERDAM RESERVE RATIO (PRECIOUS METAL TO MONETARY
LIABILITIES): This chart was produced using data from Quinn and Roberds (2014).
289	
DUTCH EIC TOTAL RETURNS BY YEAR and TOTAL EQUITY RETURNS: These charts
were produced using Bridgewater analysis, based on data from Global Financial Data; van Lent, Wim, andStoyan V. Sgourev. “Local Elites versus Dominant Shareholders: Dividend Smoothing at the Dutch East
India Company.” Academy of Management Proceedings (2013): 1; as well as other sources.
289	
GOVERNMENT BOND YIELDS: This chart was produced using data from Gelderblom, Oscar, and
Joost Jonker. “Exploring the Market for Government Bonds in the Dutch Republic (1600–1800).” Draft,Utrecht University (2006) and “A Millennium of Macroeconomic Data.”
290 	DUTCH BOND PRICES (TERM ANNUITIES): Gelderblom and Jonker (2006): 16.

22

CHAPTER 10: THE BIG CYCLE RISE AND DECLINE OF THE BRITISH EMPIRE AND THE POUND293	
At its peak: This is from Bridgewater analysis based in part on data from Maddison Historical Statistics.
295	
W hile these strengths: For a thorough argument of the role of the Glorious Revolution in setting
up institutions critical to the UK’s success, please see: North, Douglass C., and Barry R. Weingast.
“Constitutions and Commitment: Evolution of Institutions Governing Public Choice in SeventeenthCentury England.” Journal of Economic History 49 (1989): 803–832.
295	
By the 18th century: Mokyr, Joel. “Editor’s Introduction: The New Economic History and the Industrial
Revolution.” In British Industrial Revolution: An Economic Perspective, edited by Joel Mokyr, 2nd ed. New
York: Routledge, 2019: 48.
295	The creation of the Bank of England: Goodman, Halley. “The Formation of the Bank of England: A
Response to Changing Political and Economic Climate, 1694.” Penn History Review 17.1 (2009): 10.
296	GBR GOVT BOND YIELD: This chart is based in part on data from “A Millennium of Macroeconomic
Data.”296	
GBR GOVT BOND YIELD (VS MAJOR COUNTRY MEDIAN): This chart was produced
using Bridgewater analysis, based in part on data from Global Financial Data and “A Millennium ofMacroeconomic Data.”296	
GBR GOVT REVENUE: This chart was produced using Bridgewater analysis based on data from “AMillennium of Macroeconomic Data.”
297

 AJOR INVENTIONS and SHARE OF MAJOR INVENTIONS: This chart was produced using
M
Bridgewater analysis, based on data from Bunch and Hellemans (1994).

297

 e Industrial Revolution: For this section, I owe a debt of gratitude to Joel Mokyr for his insightfulThanalysis in The British Industrial Revolution: An Economic Perspective (2019).

299	
R EAL GDP PER CAPITA: This chart combines spliced estimates at a country level for major countries.
The analysis for this chart is based in part on data from Maddison Historical Statistics and from Fouquet
and Broadberry (2015). Specific country series, many found via Fouquet and Broadberry, include: for theUK, “A Millennium of Macroeconomic Data,” as well as Broadberry, Campbell, Klein, Overton, and van
Leeuwen (2015). For NLD, van Zanden and van Leeuwen (2015). For ITA, Malanima (2011). For ESP,
Alvarez-Nogal and de la Escosura (2013). For SWE, Schön and Krantz (2013). For PRT, Palma, and Reis
(2014). For CHN, Broadberry (2013) as well as Deng and O’Brien (2013).
301	
From 1720 to 1780: Chartier, Roger. The Cultural Origins of the French Revolution. Translated by Lydia G.
Cochrane. Durham, NC: Duke University Press, 1991: 72.

23

301	
FRENCH UNIVERSITIES: This chart produced from Bridgewater analysis, based on data from Clio Infra.
301

LITERACY RATES: This chart is based on data from Our World in Data.

301	At the time, France’s…: Velde, Francois R. “John Law’s System.” The American Economic Review 97.2
(2007): 276–279.
301

Th is law created monopolistic: Velde (2007): 276–279.

302	
New laws prohibited: Velde, François R., and David R. Weir. “The Financial Market and Government
Debt Policy in France, 1746–1793.” The Journal of Economic History 52.1 (1992): 18.
303	
W hile a number of these wars: Sargent, Thomas J., and François R. Velde. “Macroeconomic Features of
the French Revolution.” Journal of Political Economy 103.3 (1995): 504.
303	Th is caused France’s debt service: This is based on internal Bridgewater analysis using information from
Global Financial Data and Sargent and Velde (1995): 504.
303	Because the nobility: Morrisson, C., and W. Snyder. “The Income Inequality of France in Historical
Perspective.” European Review of Economic History 4.1 (2000): 61.
303	
Many French laborers: Sharp, Paul R., and Jacob L. Weisdorf. “French Revolution or Industrial Revolution?
A Note on the Contrasting Experiences of England and France up to 1800.” Cliometrica 6.1 (2011): 84.
304	
During the American Revolution the deficits: White, Eugene N. “The Legacy of Western European
Fiscal and Monetary Institutions for the New World: The Seventeenth to the Nineteenth Century.”
Presented at the 12th International Economic History Congress (1998).
304	Due to France’s inefficient: Neely (2008): 55–67.
305	
FRENCH INFLATION: This chart was produced using Bridgewater analysis, based on data from
Global Financial Data.
305	
As is also classic: Oosterlinck, Kim, Loredana Ureche-Rangau, Jacques-Marie Vaslin. “Waterloo: A Godsend
for French Public Finances?” Working Paper 41, European Historical Economics Society (2013): 1–2.
305

I n 1796, the government held a ceremony: “An Assignat Press from the French Revolution.” Cité del’Économie.

306	
FRENCH CURRENCY VS GOLD: This chart was produced using Bridgewater analysis, based on datafrom Global Financial Data.
307	
It should be noted that: “Great Britain, France, and the Neutrals, 1800–02.” Encyclopedia Britannica.
307	
A New World Order: I owe a debt of gratitude for this section to Henry Kissinger, A World Restored.
Weidenfeld and Nicholson, 1957.
24

307

It may not have fulfilled: Direct quotation sourced from Kissinger (1957): 5.

308“ splendid isolation”: The sentiment for this term dates back to a speech made by 1st Lord of the Admiralty,
George Goschen in 1896. It then became popular among contemporary politicians to describe Britain’s
foreign policy at the time. See: Veldeman, Marie-Christine. “Britain and Europe: From ‘Splendid Isolation’to ‘Semi-Detachment.’” Équivalences 39.1 (2012): 40–41.

309

 s mentioned, at their peak: This chart was produced using Bridgewater analysis based in part on dataA
from Maddison Historical Statistics.

309	
GBR EMPIRE SIZE (%WORLD): This chart was produced using Bridgewater internal analysis, basedon landmass data from the World Bank and data on historical dates of empire control from various online
encyclopedias, including Wikipedia, oxfordreference.com, and Encyclopedia Britannica.
310	A nd the share of trade denominated: Daudin, Guillaume, Kevin H O’Rourke, and Leandro Pradios dela Escosura. Trade and Empire, 1700–1870. Working Paper 2008–24, Centre de recherche en économiquede Sciences Po, July 2008.
310

 BR SHARE OF WORLD EXPORTS: This chart was produced using Bridgewater analysis, based inGpart on Daudin, O’Rourke, and de la Escosura and “A Millennium of Macroeconomic Data.”

311

I NTERNATIONAL INVESTMENT (%DEV WLD GDP): This chart was produced using Bridgewater
analysis, based on Kindleberger, Charles P. A Financial History of Western Europe. London: Routledge, 2007.

311	
In 1818, the English Rothschild: MacDonald, Scott B., and Albert L. Gastmann. A History of Credit andPower in the Western World. Transaction, 2004: 139.
311	
Trust in the pound: For a more detailed description of this phenomenon, see: Sowerbutts, Rhiannon andMarco Schneebalg. “The demise of Overend Gurney.” The Bank of England Quarterly Bulletin, 2016: 96–106.
312	
SHARE OF GLOBAL DEBT IN GBP: This chart was produced using Bridgewater analysis, based inpart on “Interwar Public Debt Dataset, 1914–1949” in Chiţu, Livia, Barry Eichengreen, and Arnaud Mehl.
“When Did the Dollar Overtake Sterling as the Leading International Currency? Evidence from the Bond
Markets.” Journal of Development Economics (2013); Kindleberger; and data from Global Financial Data.
312	
SHARE OF GLOBAL TRANSACTIONS IN GBP: Chart was produced using Bridgewater analysis,
based on data from Broz, J. Lawrence. “Origins of the Federal Reserve System: International Incentives
and the Domestic Free-Rider Problem.” International Organization 53.1 (1999); Eichengreen, Barry, LiviaChiţu, and Arnaud Mehl. Network Effects, Homogenous Goods and International Currency Choice: New
Evidence on Oil Markets from an Older Era. Working Paper 1651, European Central Bank: Eurosystem,
2014; Hartmann, Philipp. Currency Competition and Foreign Exchange Markets: The Dollar, the Yen andthe Euro. Cambridge: Cambridge University Press, 2007; Schenk, Catherine R. The Decline of Sterling:
Managing the Retreat of an International Currency, 1945–1992. Cambridge University Press, 2010; and “A
Millennium of Macroeconomic Data.”

25

312	Stepping back: Elbaum, Bernard, and William Lazonick. “The Decline of the British Economy: An
Institutional Perspective.” The Journal of Economic History 44.2, 1984: 567–583.
313

I NVENTIONS (% OF GLOBAL INVENTIONS): This chart was produced using Bridgewater
analysis, based on data from Bunch and Hellemans (1994).

313

 DP (% OF GLOBAL GDP): This chart was produced based on Bridgewater analysis, based in part onGdata from Maddison Historical Statistics.

313

For comparison, the top 1 percent’s: This was sourced from the data available from Thomas Piketty.

314	UK WEALTH GAP: This chart was produced using the World Inequality Database as well as data
available from Thomas Piketty.
314	The combination of social change: “Liberal Welfare Reforms 1906–11” The National Archives.
314	
By 1911, around 25 percent: Wrigley, Chris. “Trade Unionists and the Labour Party in Britain: The
Bedrock of Success.” Revue française de civilisation britannique 15.2 (2009): 59–72.
315	
Viewing an effective education system: Landes, David S. The Unbound Prometheus. 2nd ed. Harvard
University Press, 2003: 346–348.
315	
Starting in the 1860s: Landes (2003): 342.
315	
PUBLIC EDUCATION EXPENDITURE: This chart was produced using data from Roser, Max andEsteban Ortiz-Ospina. “Financing Education.” Our World in Data, 2016.
315	In order to create: Landes (2003): 151.
315	
[Bismarck] remained undisputed world: This is a direct quotation from Hobsbawm, E.J. The Age of Empire:
1875–1914. Random House, 1987: 312.
316

 HARE OF WORLD PATENT APPLICATIONS: This chart was produced using BridgewaterS
analysis, based on data from the World Intellectual Property Organization statistics database (as of Dec
2020) and Khan, B. Zorina. “An Economic History of Patent Institutions.” Economic History Services.
https://eh.net/encyclopedia/an-economic-history-of-patent-institutions/.

316	% OF NOBEL PRIZES WON: This chart was produced using Bridgewater analysis, based on data from
“Nobel Prize Winners by Year.” Encyclopedia Britannica.
316	
R ELATIVE SHARES OF WORLD MANUFACTURING: This chart was produced using
Bridgewater analysis, based on data from Allen, Robert C. “Lessons from History for the Future of Work.”
Nature 550 (2017).
317	W hile Bismarck was a skilled: Mommsen, Wolfgang J. “Kaiser Wilhelm II and German Politics.” Journalof Contemporary History 25.2 (1990): 289–316.
26

317	
WARSHIP TONNAGE: This chart was produced based on data from Kennedy (1988).
317	
SHARE OF GLOBAL MILITARY SPENDING: This chart was produced using Bridgewater analysis,
based on data from The Correlates of War Project and Kennedy (1988).
318

I n fact, the term “new world order”: “The Wilsonian Model of Foreign Policy & the Post-Cold War
World.” Working Paper, Air University, July 26, 1999.

319	
DEU REAL GDP PER CAPITA and JPN REAL GDP PER CAPITA: These charts were produced
using Bridgewater analysis, based in on part on data from Maddison Historical Statistics and Global
Financial Data.
320	
DEU SPOT FX/DEU BLACK MARKET SPOT FX: Black market exchange rate based on data from
Global Financial Data.
320	
Other countries’ central banks continued: Schenk (2011).
321	
GBR SHARE OF GLOBAL RESERVES: This chart was produced using Bridgewater analysis, basedon data from Eichengreen, Barry, Livia Chiţu, and Arnaud Mehl. “Stability or Upheaval? the Currency
Composition of International Reserves in the Long Run.” IMF Economic Review 64.2 (2015); Eichengreen,
Barry, and Marc Flandreau. “The Rise and Fall of the Dollar, or When Did the Dollar Replace Sterling as the
Leading International Currency?” Working Paper 1651, National Bureau of Economic Research, July 2008.
321

 BP SHARE OF GLOBAL DEBT: This chart was produced using Bridgewater analysis, based in partG
on data from Chiţu, Eichengreen, and Mehl; Kindleberger (2013); and data from Global Financial Data.

321	
GBP SHARE OF GLOBAL TRANSACTIONS: Bridgewater analysis, based on data from Eichengreen,Chiţu, and Mehl (1999); Hartman; Schenk (2010); and “A Millennium of Macroeconomic Data.”
322	
The Pound’s Suspended Convertibility: Beyond specific instances listed below, much of this account of
the pound’s decline is indebted to the illuminating research of Catherine Schenk on this topic.
322	
The 1940s are frequently: Schenk (2010): 37.
322	
The war required: Schenk (2010): 38–39.
322	The US was anxious: Schenk (2010): 44–46.
322	
The Bank of England was eager: Schenk (2010): 31–33; See also, Cairncross, Alec. Years of Recovery:
British Economic Policy, 1945–51. Routledge, 2013: 126–127.
322	
We are engaged in another battle: This is a quote from a speech by Prime Minister Clement Attlee given
in 1947 as cited by Todman, Daniel. Britain’s War: A New World, 1942–1947. Oxford: Oxford University
Press, 2020: 829.

27

323	
GBR CURRENT ACCOUNT: This chart was produced based on “A Millennium of Macroeconomic Data.”
323	The governor of the National Bank: Schenk (2010): 66–67.
323	Competitiveness returned: For a discussion of other contributing factors, see Cairncross, A., and B.
Eichengreen. Sterling in Decline: The Devaluations of 1931, 1949 and 1967. Palgrave Macmillan UK, 2003:
151–155.
323

The devaluation did not lead: Schenk (2010): 39–46.

324	
As a result, numerous efforts: For further description of these and other coordinated policies, see Schenk(2011).
324

I n addition, the UK mandated: Singleton, John, and Catherine R. Schenk. “The Shift from Sterling to
the Dollar, 1965–76: Evidence from Australia and New Zealand.” The Economic History Review 68.4 2015:
1162–1163.

324	The result was that: For more detail on the dynamics of the Sterling Area, see Schenk, Catherine R.
Britain and the Sterling Area from Devaluation to Convertibility in the 1950s. Routledge, 1994.
325

Countries that continued to hold: Schenk (2010): 273.

326	
AVERAGE SHARE OF POUNDS: Data for these bar charts are from Schenk (2011): 25.
327

 e story of Robert Schuman: “Robert Schuman: the Architect of the European Integration Project.”Th
EUROPA. https://european-union.europa.eu/principles-countries-history/history-eu/eu-pioneers/robertschuman_en.

327

“not merely unthinkable, but materially impossible”: “Robert Schuman.” EUROPA.

328	The pooling of coal and steel: Quotation is from the Schuman Declaration, EUROPA, The Schuman
Declaration – 9 May 1950. http://europa.eu/about-eu/basic-information/symbols/europe-day/schumandeclaration/index_en.htm.
329	THE EUROZONE COMPARED TO THE US AND CHINA: This chart was produced primarily
based on Bridgewater analysis. Data for GDP per capita was sourced from the World Bank; militaryspending data primarily from the Stockholm International Peace Research Institute; patent data from theWIPO statistics database (as of Dec 2020); and Nobel prize data from Encyclopedia Britannica.

28

CHAPTER 11: THE BIG CYCLE RISE AND DECLINE OF THE UNITED STATES AND THE DOLLAR

335	
Only two US banks: Cottrell, P.L. “Aspects of Commercial Banking in Northern and Central Europe
1880–1931,” in International Banking in an Age of Transition: Globalisation, Automation, Banks and Their
Archives. Edited by Sara Kinsey and Lucy Newton. Ashgate, 1998: 109.
335	Investment banking took off: Bordo, Michael D. and David C. Wheelock. “Monetary Policy and Asset
Prices: A Look Back at Past U.S. Stock Market Booms.” Working Paper 10704, National Bureau of
Economic Research, 2004: 14–17.
335

i n the pre-war period: Evidence of the size of insurance trusts relative to national and state banks during
this time can be found in sources like: Moen, Jon, and Ellis W. Tallman. “The Bank Panic of 1907: The
Role of Trust Companies.” The Journal of Economic History 52.3 (1992).

335

The fact that the US economy: Bordo and Wheelock (2004), 14–17.

336	
By 1910, stock market capitalization: This is sourced from internal analysis, based in part on data from
Global Financial Data.
336	
New sectors and companies rose: Kauflin, Jeff, and Michael Noer. “America’s Top 50 Companies 1917–
2017.” Forbes, September 27, 2017.
337	
The monetary system in the immediate: Eichengreen, Barry. Golden Fetters: The Gold Standard and theGreat Depression, 1919–1939. New York: Oxford University Press, 1996.
339	Every nation must choose: Quotation from the Truman Doctrine delivered in a March 1947 speech.
“Truman Doctrine.” Avalon Project, Yale Law School.
340	As shown in the following chart: “Nuclear Weapons: Who Has What at a Glance.” Arms Control
Association, October 2021.
341

 UCLEAR WEAPONS STOCKPILE: This chart was produced using data from Roser, Max andN
Mohamed Nagdy. “Nuclear Weapons” Our World in Data, 2013.

343	
By the end of World War II: Federal Reserve Bulletin (1948): 375.
343	As for monetary policy, from 1933 until 1951: Carlson, Mark A. and David C. Wheelock. “Navigating
Constraints: The Evolution of Federal Reserve Monetary Policy, 1935–59.” Working Paper 205, Federal
Reserve Bank of Dallas Globalization and Monetary Policy Institute (2014): 7–13.
344

 e post-war recession saw the unemployment: Bohanon, Cecil. “Economic Recovery: Lessons from theTh
Post-World War II Period.” Policy Brief, Mercatus Center; George Mason University (2012).

344

I n 1965, only 13 US banks: Houpt, James V. “International Activities of U.S. Banks and in the U.S.
Banking Markets.” Federal Reserve Bulletin (1999): 603.
29

346	
A fter 1945, foreign central banks: Elwell, Craig K. “Brief History of the Gold Standard in the UnitedStates.” Congressional Research Services (2011): 11–12.
346	As inflation accelerated: Elwell (2011): 12–13.
346

I n the summer of 1971: “US tourists hit by dollar crisis.” Golden Daily Transcript, May 6, 1971, 104 edition,sec. 98.

348	The panic out of dollar debt: Kollewe, Julia. “Gold Prices - the Highs and Lows since 1971.” The Guardian,
September 17, 2017.
348

I f you want to read: Volcker, Paul A., and Toyoo Gyohten. Changing Fortunes: The World’s Money and theThreat to American Leadership. Time Books, 1993.

349

I n October 1979, Volcker announced: Carney, John. “A Timely Banking Lesson from the Paul Volcker
Era.” CNBC, April 5, 2012.

349	“since Jesus Christ”: Rowen, Hobart. “Rich and Poor Nations to Chart the Future of Lending Agencie.”
Washington Post, May 9, 1982.
356	
USA INCOME SHARES and USA WEALTH SHARES: These charts based on data from the World
Inequality Database.
357	
IDEOLOGICAL POSITIONS OF THE MAJOR PARTIES: This chart was produced based on datafrom Vote View.
357	
SHARE OF CONGRESSIONAL MEMBERS’ VOTES CAST ALONG PARTY LINES: This
chart was produced based on data from Vote View.
358	
USA UNEMPLOYMENT RATE and USA CB BALANCE SHEET: These charts were produced
using Bridgewater analysis, including data from Global Financial Data.
359	
U NEMPLOYMENT RATE and CB BALANCE SHEET across countries: These charts were
produced using Bridgewater analysis, including data from Global Financial Data.

30

CHAPTER 12: THE BIG CYCLE RISE OF CHINA AND THE RENMINBI

364	
Socialist market economy with Chinese characteristics: This is an amalgam of two phrases by Deng
Xiaoping, “socialist market economy” and “socialism with Chinese characteristics. Cui, Zhiyuan. “Making
Sense of the Chinese ‘Socialist Market Economy.’” Modern China 38.6 (November 2012); Wilson, Ian.
“Socialism with Chinese Characteristics: China and the Theory of the Initial Stage of Socialism.” Politics
24.1 (1989).
364	The entire report on China’s dynasties: To see this and my other reports, please visit economicprinciples.org.
369	The Tang Dynasty (618–907): Lewis, Mark Edward. “China’s Cosmopolitan Empire: The Tang Dynasty,”in The Cambridge History of China Vol. 8: The Ming Dynasty, 1368–1644 Part 2, edited by Denis Twitchettand Frederick W. Mote, et al. Cambridge: Cambridge University Press, 1998: 388–401.
370	during which China: von Glahn (2016): 208–209.
370	a) bring together the different factions: von Glahn (2016): 187–191.
370	
These investments in education: von Glahn (2016): 247–248.
371

financial problems: von Glahn (2016): 247–248.

371

 or much of his rule: Rossabi, Morris. “The reign of Kubilai khan,” in The Cambridge History of China
F
Vol. 6: Alien Regimes and Border States, 907–1368. Edited by Denis Twitchett and Frederick W. Mote.
Cambridge: Cambridge University Press, 1994: 414–454.

371	
Corruption grew later in his rule: Rossabi (1994): 492–494.
371

I t was founded by the Hongwu Emperor: Mote, Frederick W, and Denis Twitchett et al (Eds.) The
Cambridge History of China, Vol. 7: The Ming Dynasty, 1368–1644 Part 1. 1st ed. Cambridge: Cambridge
University Press, 1998: 48, 49–50, 53, 54.

371	
He consolidated power: Mote, Twitchett, et al. (1998): 109.
371

in a 14-year purge: Fairbanks and Goldman (2005): 128.

371	A fter winning power: Mote, Twitchett, et al. (1998): 70.
371	
early Ming leaders built: Kerr, Gordon. Short History of China: From Ancient Dynasties to Economic
Powerhouse. Oldcastle Books, Ltd., 2013: 80–81.
371	Over time the Ming Dynasty: China and Europe: 1500–1800.
371	A mong the many inventions: von Glahn, Richard. Fountain of Fortune: Money and Monetary Policy inChina, 1000–1700. Taipei: SMC Pub., 1997: 51.
31

372

as Chinese goods were of superior quality: von Glahn (2016): 308–309.

372

However, the Ming’s failure: von Glahn (2016): 310–311.

372

Manchu people capitalized on instability: von Glahn (2016): 311.

372

China achieved its maximum: von Glahn (2016): 312.

372

The Europeans came offering: von Glahn (2016): 320–321.

372

A series of military: von Glahn (2016): 348.

372

China’s share of world GDP: Kennedy (1988): 149.

376	Growing inequality and fiscal problems: For more details on this topic, see Huang, Ray. China: A Macro
History. London: Routledge, Taylor & Francis Group, 2015.
378	For example, the north is colder, flatter, and drier: MacDonald, Scott B. “China, Food Security andGeopolitics.” The Diplomat, September 30, 2020.
378	For that reason, China: Larson, Christina. “How Resource Scarcity Constrains China.” Bloomberg
Businessweek, December 7, 2013.
379

Critique of Pure Reason: Kant, Immanuel. Critique of Pure Reason. Outlook Verlag, 2020.

380	On Practice: Mao, Zedong. On Practice: On the Relation between Knowledge and Practice, between Knowing
and Doing. Peking: Foreign Language Press, 1971.
380	
On Contradiction: Mao, Zedong. On Contradiction. Peking: Foreign Language Press, 1965.
380

 e Little Red Book: Mao, Zedong. Quotations from Chairman Mao, and Related Material. Peking: ForeignTh
Language Press, 1966.

381	modern socialist country: Direct quotation from Xi Jinping’s speech “Secure a Decisive Victory in
Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialismwith Chinese Characteristics for a New Era” delivered at the 19th National Congress of the Community
Party of China, October 18, 2017.
381	
The Made in China 2025 plan: McBride, James, and Andrew Chatzky. Is ‘Made in China 2025’ a Threat to
Global Trade? Council on Foreign Relations, May 13, 2019.
384	
Scholars believe that China: Knapp, Mark. “Chinese Culturalism: The Underlying Factor.” Emory
University, 2011.
385	
The currency the Chinese used: von Glahn (2016): 289.

32

385	
The graded and concentric hierarchy: This quotation is sourced from Fairbank, John K. The Chinese World
Order: Traditional China’s Foreign Relations. Cambridge, MA: Harvard University Press, 1968: 2.
386

I n fact, different parts of China: Irigoin, Alejandra. “The End of a Silver Era: The Consequences of the
Breakdown of the Spanish Peso Standard in China and the United States, 1780s–1850s.” Journal of WorldHistory 20.2 (2009): 207.

387

At the start of the Tang Dynasty: von Glahn (2016): 187.

387

“Flying cash” started out as: von Glahn (2016): 216.

387

In the early 1100s during the Song Dynasty: von Glahn (1997): 51.

387

Thus began an early version: Huang (2015): 151.

387

By the mid-1100s the financial demands: von Glahn (1997): 52–53.

387

Initially, the monetization of deficits: von Glahn (1997): 51.

387

But the Song government: von Glahn (1997): 52–53.

387

The government office issued: Huang (2015): 151.

388

As internal and external conflicts: von Glahn (2016): 53.

388

As a result, the market value: von Glahn (2016): 53.

388	
The Yuan Dynasty: “China in 1000 CE: The Song Economic Revolution.” The Song Dynasty in China.
Columbia University: Asia for Educators.
389	
Establishing the first stock companies: “China in 1000 CE”, Asia for Educators.
390	
Further, China’s support for: For more, please see Huang (2015).
390	Debt grew dramatically during civil unrest: Reinhart, Carmen M., and Kenneth S. Rogoff. “FromFinancial Crash to Debt Crisis.” Working Paper 15795, National Bureau of Economic Research, March
2010. Forthcoming in American Economic Review.
390	
a fiat paper one for domestic transactions: Shiroyama, Tomoko. China During the Great Depression:
Market, State, and the World Economy, 1929–1937. Cambridge: Harvard University Press, 2008: 183–195.
390a gold one for international payments: Miller, Mark David. “Printing China’s gold: The American banknote company and the customs gold units of 1930.” Thesis, UNLV, 2007.

390

The fiat paper one was printed: Shiroyama (2008): 183–195.

33

391	
A fter the turbulence of World War II: “TIMELINE: The past and present of China’s yuan.” Reuters,
April 9, 2010.
391

CHINESE INFLATION: This chart was produced using Bridgewater analysis, based in part on datafrom Allen, Robert C, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan Luiten van
Zanden. “Wages, Prices, and Living Standards in China, 1738–1925: In Comparison with Europe, Japan,
and India.” The Economic History Review 64.1 (2011) and the League of Nations.

392	
CNY VS USD and GOLD PRICE: These charts were produced using Bridgewater analysis, based in parton data from Global Financial Data.
392	
CHN INFLATION: This chart was produced using internal Bridgewater analysis based in part on datafrom Allen, Bassino, Ma, Moll-Murata, and van Zanden (2011) and League of Nations
393	The end of World War II in 1945: For a description of the mass forced repatriation throughout Asia after
the end of World War II, please see: Watt, Lori. When Empire Comes Home: Repatriation and Reintegrationin Postwar Japan. Cambridge: Harvard Univ. Asia Center, 2009: 1–6.
394	The British East India Company wanted tea: von Glahn (2016): 248.
394	The Qing government borrowed heavily: Lim, Seung Hwan. “Chinese Loans 1861–1911.” Research
Paper, December 2009.
394	
W hen the rebellion failed: Spence, Jonathan. The Search for Modern China. New York: W.W. Norton,
2012.
398	
Deng Xiaoping reiterated: This quotation is excerpted from Deng Xiaoping. Selected Works of Deng
Xiaoping, Vol. 2. Beijing: Foreign Languages Press, 1994.
400	
Domestically, the new government: Burdekin, Richard C.K. “Ending Inflation in the People’s Republicof China: From Chairman Mao to the 21st Century.” Working Paper 2000–08, Claremont Colleges,
2000: 223–235.
400	The government also nationalized most: “China’s Great Leap Forward.” Association for Asian Studies,
July 13, 2020.
401	The Chinese viewed this as a threat: Brands, H W. “The Redacted Testimony That Fully Explains Why
General MacArthur Was Fired.” Smithsonian Magazine, September 28, 2016.
402

Between 1952 and 1957: “China’s Great Leap Forward.”402	
Estimates suggest that over: Field, Robert Michael. “Industrial Production in Communist China: 1957–
1968.” The China Quarterly 42 (1970): 56.
403	
estimates range from hundreds of thousands: Ramzy, Austin. “China’s Cultural Revolution, Explained.”
The New York Times, May 14, 2016.
34

403	
Henry Kissinger quoted Chinese officials: This is a direct quotation sourced from Kissinger, Henry. On
China. London, England: Penguin Books, 2012: 211.
404	acknowledges that all Chinese: Phillips, Steven E. (ed.). Joint Statement Following Discussions With
Leaders of the People’s Republic of China, Document 203. Foreign Relations of the United States, 1969-1976,
Volume XVII, China, 1969-1972, Document 203. Office of the Historian, Department of the Historian,
United States Department of State.
405

its per capita income was less: “GDP per Capita (Current US$) - China.” The World Bank: Data.

405	“socialist market economy” and “socialism with Chinese characteristics: Cui (2012); Wilson (2012):
665–673.
406	More specifically, he moved: Wang, Zhengxu, and Anastas Vangeli. “The Rules and Norms of Leadership
Succession in China: From Deng Xiaoping to Xi Jinping and Beyond.” The China Journal 76 (2016): 25–27.
410	That year, the United States had more: Leng, Alyssa, and Roland Rajah. “Chart of the Week: Global
Trade through a US-China Lens.” The Interpreter, December 18, 2019.
412	W hen he came to power: This is based on Bridgewater analysis, using data from the World Bank and the UN.
412	at the time of his death: “Poverty Headcount Ratio at $1.90 a Day (2011 PPP) (% of Population) - China.”
The World Bank: Data.
418

e.g., Made in China 2025: McBride and Chatzky (2019).

418

In 2009 China declared: Ki-Moon, Ban, CML/17/2009 § United Nations, (2009).

419	It has invested heavily: See “The Belt and Road Initiative in the Global Trade, Investment and FinanceLandscape.” OECD Business and Finance Outlook, 2018.
419	the largest such program: Li, Xiang, Mengqi Shao, and May Tan-Mullins. “China’s Belt and Road
Initiative: Debates, Impacts, and Trends.” Oxford Research Encyclopedia of International Studies (2021).
421	
CHINA’S DEVELOPMENT SINCE 1949: This chart was produced using Bridgewater analysis basedon data from the World Bank and the UN.
421	For example, in a recent ranking: “2020 Academic Ranking of World Universities.” ShanghaiRanking’s
Academic Ranking of World Universities.
422

 S VS CHINA EDUCATION TABLE: This chart was produced using Bridgewater analysis based inUpart on data from the OECD, UNESCO/UIS, Barro-lee, Clio Infra, and the US Treasury.

35

CHAPTER 13: US-CHINA RELATIONS AND WARS

426

It is because of that destiny: Hussein and Haddad (2021).

430	“undergoing changes not seen in a century”: Quotation from a speech by President Xi at the hundredthyear anniversary of the Chinese Community Party, as cited by “Upbeat Xi Says Time on China’s Side as
Turmoil Grips U.S.” Bloomberg News, January 11, 2021.
430	“[i]n the face of an external environment”: Quotation from a speech by President Xi at a symposiumwith entrepreneurs in July 2021 as cited in Lanxu, Zhou, and Cheng Yu. “Dual Circulation at Heart of
Economic Strategy.” China Daily, March 5, 2021.
431	The largest public Chinese tech companies: Protska, Olga. “Top 10 World’s Most Valuable Technology
Companies in 2021.” FXSSI, October 10, 2021.
431

 onsider that 40 percent of the world’s Jun, Xie, and Xiong Xinyi. “Chinese Supercomputers Hold onto
C
Supremacy despite US Squeeze.” Global Times, July 4, 2021.

431	As for providing people: McCarthy, Niall. “The Countries With The Most STEM Graduates.”
IndustryWeek, February 6, 2017.
432	One in five North America-based: Rosenbaum, Eric. “1 In 5 Corporations Say China Has Stolen Their
IP within the Last Year: CNBC CFO Survey.” CNBC: CFO Council, March 1, 2019.
437	“Looking at the world at large”: Quotation from President Xi’s 2019 New Year’s address, President Xi
Jinping. “2019 New Year Speech.” Speech presented through China Media Group and online on December
31, 2018 at https://youtu.be/EJcxCxi8T_E.
439	natural resources and military equipment: O’Hanlon, Michael E, and Adam Twardowski. Unpacking the
China-Russia ‘Alliance’. Brookings, December 13, 2019.
441	As of 2019, there were approximately: Gilsinan, Kathy. “A Boom Time for U.S. Sanctions.” The Atlantic,
May 3, 2019.
442	The roughly $1 trillion of US debt: Pesek, William. “China’s $1.1 Trillion Bet on U.S. Treasuries Still
Getting Trumped.” Forbes, October 8, 2021.
442$28 trillion outstanding: “Historical Debt Outstanding.” U.S. Treasury Fiscal Data. United States Treasury.

443

For example, Russia and China: Gilsinan (2019).

446	China is now militarily stronger: For example, see Cardenas, Nicky C. “Military Competition between
the United States and China in the South China Sea: A Critical Analysis.” Expeditions with MCUP, July
2020.

36

453

 uch a culture clash took place: Yglesias, Matthew. “The Raging Controversy over the NBA, China, andS
the Hong Kong Protests, Explained.” Vox, October 7, 2019.

455	For example, in a recent Pew survey: Silver, Laura, Kat Devlin, and Christine Huang. “Americans Fault
China for Its Role in the Spread of COVID-19.” Pew Research Center, July 30, 2020.
459	
By and large we will: Deserve Victory. Photograph. Museum of World War II. London, Museum of WorldWar II.

37

CHAPTER 14: THE FUTURE

465	
GLOBAL POPULATION This chart was produced using Bridgewater analysis based in part on datafrom the World Bank.
466	
GLOBAL POPULATION GROWTH: This chart was produced using Bridgewater analysis based inpart on data from the World Bank.
466	
GLOBAL LIFE EXPECTANCY AT BIRTH: This chart was produced using Bridgewater analysis,
based on data from Our World in Data and the UN for the front history, extended back based on data from
Clio Infra and Gapminder. The 2020 point is based on countries that had reported data for the year as ofAugust 2021.
467	
GLOBAL RGDP PER CAPITA (LOG) and GLOBAL RGDP PER CAPITA (2017 USD): Global
RGDP is primarily a mix of European countries before 1870 due to limited reliable data coverage acrossother countries before that point. These charts combine spliced estimates at a country level for majorcountries. The analysis is based in part on data from Maddison Historical Statistics and from Fouquet
and Broadberry (2015). Specific country series, many found via Fouquet and Broadberry, include: for theUK, “A Millennium of Macroeconomic Data,” as well as Broadberry, Campbell, Klein, Overton, and van
Leeuwen (2015). For NLD, van Zanden and van Leeuwen (2015). For ITA, Malanima (2011). For ESP,
Alvarez-Nogal and de la Escosura (2013). For SWE, Schön and Krantz (2013). For PRT, Palma, and Reis
(2014). For CHN, Broadberry (2013) as well as Deng and O’Brien (2013).
467	
GLOBAL REAL WEALTH PER CAPITA: This chart was produced using Bridgewater analysis,
based in part on data from Shorrocks, Anthony, James Davies, and Rodrigo Lluberas. Global Wealth Report
2021. Credit Suisse: Research Institute, June 2021, and World Inequality Database. Note from the author:
Because there are not good records prior to 1900, I can’t give you the picture of wealth before then.
470	
GLOBAL RGDP PER CAPITA DRAWDOWNS: Global RGDP is primarily a mix of European
countries before 1870 due to limited reliable data coverage across other countries before that point. These
charts combine spliced estimates at a country level for major countries. The analysis is based in part on datafrom Maddison Historical Statistics and from Fouquet and Broadberry (2015). Specific country series,
many found via Fouquet and Broadberry, include: for the UK, “A Millennium of Macroeconomic Data,”
as well as Broadberry, Campbell, Klein, Overton, and van Leeuwen (2015). For NLD, van Zanden andvan Leeuwen (2015). For ITA, Malanima (2011). For ESP, Alvarez-Nogal and de la Escosura (2013). For
SWE, Schön and Krantz (2013). For PRT, Palma, and Reis (2014). For CHN, Broadberry (2013) as well
as Deng and O’Brien (2013).
471	
GLOBAL REAL WEALTH PER CAPITA DRAWDOWNS: Bridgewater analysis, based in part on
data from Shorrocks, Davies, and Lluberas (2021) and World Inequality Database. Note from the author:
Because there are not good records prior to 1900, I can’t give you the picture of wealth before then.
471	
GLOBAL DEATHS BY CATEGORY: This chart was produced using Bridgewater analysis, basedon analysis of death counts from major events using data from various online encyclopedias, including

38

Wikipedia and Encyclopedia Britannica.
472	
ESTIMATED DEATHS FROM CONFLICT: This chart was produced using Bridgewater analysis,
based on analysis of death counts from major events using data from various online encyclopedias, including
Wikipedia and Encyclopedia Britannica.
480	
Luo Guanzhong’s classic book: Luo, Guanzhong. San Kuo, or, Romance of the Three Kingdoms: An English
Version of San Kuo Chi Yen I. Translated by C. H. Brewitt-Taylor. Shanghai: Kelly & Walsh, 1929.
482	For example, in a 2019 Pew survey: Partisan Antipathy: More Intense, More Personal. Pew Research Center,
October 10, 2019.
482	A nother study reported that: Fractured Nation: Widening Partisan Polarization and Key Issues in 2020
Presidential Elections. PRRI, October 20, 2019.
482	
A 2010 study showed that: Iyengar, S., G. Sood, and Y. Lelkes. “Affect, Not Ideology: A Social Identity
Perspective on Polarization.” Public Opinion Quarterly 76.4 (2012): 416–418.
483	That compares with about: Iyengar, Sood, and Lelkes (2012): 416–418.
483	
One recent survey showed that: Kalmoe, Nathan P, and Liliana Mason. Lethal Mass Partisanship: Prevalence,
Correlates, & Electoral Contingencies. NCAPSA American Politics Meeting, January 2019: 22.
483

In 1919, over 20 percent: “Postwar Labor Tensions.” Digital History, 2021.

487	
There have been just over 50: Pinker, Steven. The Better Angels of Our Nature: The Decline of Violence inHistory and Its Causes. London: Allen Lane, 2011: 225.
487

Eighty percent of the years: Pinker (2011): 229.

490

 s Graham Allison explained: Allison, Graham T. Destined for War: Can America and China EscapeA
Thucydides’ Trap? Boston: Houghton Mifflin Harcourt, 2017: vii.

490

and big military buildups were: This is based on internal Bridgewater analysis using data from Allison.

490	
We may be seeing such a buildup: This is based on internal Bridgewater analysis as well as data from theStockholm International Peace Research Institute.
491	
GLOBAL DEATHS BY CATEGORY: This chart was produced using Bridgewater analysis, basedon analysis of death counts from major events using data from various online encyclopedias, including
Wikipedia and Encyclopedia Britannica.
492	
GLOBAL TEMPERATURE CHARTS: PAGES 2K Consortium. “Consistent Multidecadal
Variability in Global Temperature Reconstructions and Simulations over the Common Era.” Nature
Geoscience 12.8 (2019): 643–649. GLOBAL LAND AND OCEAN TEMPERATURE: This chart was
produced using data from the NOAA and IAC Switzerland.
39492	
N UMBER OF NATURAL CATASTROPHIC EVENTS: “sigma 1/2021 - Natural catastrophes in
2020.” Swiss Re Institute, January 2021.
493

TOTAL LOSSES FROM CATASTROPHES: “Sigma 1/2021” (2021).

494	
CLIMATE CHANGE VULNERABILITY: This chart was produced using Bridgewater analysis, basedon data from Notre Dame and “The economics of climate change.” Swiss Re Institute, April 22, 2021.

40

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42

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59

CORRECTIONS TO INITIAL 2021 PRINTING

74		The title of the classical Chinese text Four Books and Five Classics was originally misstated as Five Books
and Four Classics.
91		

In footnote 4, the current wealth share of the top 1 percent is 20-25% but was originally misstated as 35%.

393	In footnote 16, “the issuance of debt that got monetized and led to high inflation” was misstated as occurring
after the Taiping Rebellion. It did not occur in a coordinated way until after the Chinese Revolution,
during the 1930s.

60

INDEX

Adenauer, Konrad, 161, 327
Afghanistan, 340, 481
Africa, 250
agriculture, 31, 261, 298
Alibaba, 431, 433
alliances, 99–100
Allison, Graham, 490
Allison, John Moore, 210
Amazon, 433
American Revolution, 199, 282, 284, 303,
304, 333
Americas, in 1500, 250
Amsterdam Stock Exchange, 275
Ant Group, 431
Apple, 429
Arab Spring, 481
Argentina, 116, 187
Aristotle, 92, 161
artificial intelligence (AI), 431, 474–75
Asia, 256, 424, 454
in 1500, 247–50
Western powers’ movement into, 262–63
asset freezes/seizures, 209
Attlee, Clement, 322
austerity, 125
Australia, 323–24, 424
Austria, 317
Austria-Hungary, 229, 336
asset returns in, 226
autocracies, 35, 79, 96, 97, 101, 181, 182,
420
Aztec Empire, 250, 255
Bacon, Francis, 255, 260, 295
balance sheets, 105
Bank of Amsterdam, 273, 276–77, 283–87,
288nBank of England, 295–96, 300, 311, 311n,
322bank panics, 335
banks, 117
defaults and bailouts of, 120
US, 335, 344–45

banks, central, 120, 146, 219, 311n, 342,
358, 360
balance sheets of, 358–59
defaults by, 120
economy controlled by, 114–15
Federal Reserve, see Federal Reserve
interest rates and, see interest rates
money and credit created by, 89,
106, 108, 113, 114, 118–25, 136,
143–44, 146, 218–19, 223, 343,
355–56, 358
shares of reserve currencies in, 441
Banque Générale, 301
Baron, Martin, 177
Bernanke, Ben, 360
Biden, Joe, 175, 429, 439
Big Cycle(s), 3–4, 14, 23–56, 59, 195, 499,
507–9
archetypical, 43–44
decline phase of, 44, 49–52, 54
determinants in, see determinants anddynamics
evolution and, 27–31, 78
investing and, see investing in light of the
Big Cycle
quantitative scoring of measures by stagein, 53–54
rise phase of, 43–46, 52, 54
three phases of, 43–52
top phase of, 43, 46–48, 52, 54
understanding, 26–27
uptrend and, 31–37
wealth and power determinants in, 41–43
wealth and power shifts in, 38–41
see also external order and disorder cycle;
internal order and disorder cycle;
money, credit, debt, and economic
activity cycle
big data, 431
Bismarck, Otto von, 160, 163–64, 315,
315n, 317
Black Death, 69
blockades, 209
559

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INDEXbonds, 27, 86, 94, 107, 110, 113, 118–19,
123, 124, 133, 204, 222, 223, 226n,
233, 253, 284n, 289, 322, 345, 351,
354, 387, 410, 442n
British, 296
payback period for, 237–38
60/40 stock/bond portfolios, 234–35
yields of, 236
book publishing, 254, 273, 301
Boxer Rebellion, 394
Brady, Nicholas, 351
Brady Plan, 351
Brazil, 165
Bridgewater Associates, 7, 8n, 17, 108,200n, 220, 350, 411, 415
Bretton Woods system, 56, 115, 143, 147,
324, 327, 342
dollar and, 140, 327, 342, 343, 347
end of, 140, 346–49
Britain, 2, 14, 16, 23, 46–48, 55, 71, 93, 94,
147, 176, 202, 211, 229, 246, 255, 261,
262, 290, 291–330, 336, 367, 401, 426
American Revolution against, 199, 282,
284, 303, 304
asset returns in, 224–25
Bank of England in, 295–96, 300, 311,
311n, 322
China and, 300, 309, 372–73, 393–95,
406
Civil War in, 93, 175, 270n, 294
computer analysis of the conditions ofand prospects for, 538–40
decline of, 320–30
decline of competitiveness of, 312–13
Dutch and, 280, 282–85, 287, 289, 292,
297–300
Dutch wars with, 146, 147, 281, 282, 286
education in, 295
emergence of geopolitical rivals to, 312,
314–20expansion of, 309, 337, 394
GDP of, 299, 313, 316
Germany and, 312, 314, 316, 317
global exports of, 310
Glorious Revolution in, 282, 294
index of key determinants in, 292
India and, 85, 263, 309n
Industrial Revolution in, see Industrial
Revolution
international investments of, 310–12
inventions in, 296–99, 312–13
investing and, 220–21

Labour Party in, 314
London, 46, 282, 292, 300, 322, 335
military strength of, 299–300
Napoleon and, 262
in Opium Wars, 257, 300, 309, 372–73,
377, 394
Parliament in, 93, 294–95
Pax Britannica and, 262
peak of, 308–20
in relative standing of empires, 38–40
rise of, 291, 293–309, 394
Suez Canal and, 436
taxes in, 295
unemployment rate and central bankbalance sheet of, 358
US loan to, 322
Victorian Era in, 163
wealth gap in, 313–14
in World War II, 140, 146, 176, 211, 214,
319, 320, 338
British East India Company, 85, 289, 309n,
394
British pound, 14, 108, 132, 311, 444, 478
average share in central bank reserves,326
crisis years and devaluation of, 322–26
decline in, 320–21
exchange rates of, 287–88
as reserve currency, 146, 147, 287, 290,
292, 300, 309, 310, 320–21, 436
Brokaw, Tom, 37
Bulgaria, 336
bureaucracies, 152–57, 160–62, 173–74
business cycle (short-term debt cycle), 112,
114–15, 501, 502
buying power, 84, 107, 109, 144–45, 223, 237
Caesar Augustus, 160, 162
capitalism, 5, 32, 35, 49, 95, 97–98, 113,
138, 175, 221, 319, 334, 336, 352,
395–98, 452, 469
in China, 45, 79, 97, 349, 382, 398, 405,
406, 417, 420
cycle of, 221–23
invention of, 30, 44, 94, 259–60, 275, 279
Mao’s view of, 395
2008–2020 money-financed capitalist
boom, 355–60
capital markets, 71–72
capital wars, 194–95, 426, 486
between US and China, 440–46, 487,
490

560

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INDEX

Capitol, storming of, 100
Caribbean, 284–85
Carter, Jimmy, 349
cash, 124
payback period for, 237–38
Catherine the Great, 295
Catholic Church, 246, 259, 268n, 277–78
Reformation and, 258–59, 269, 270
cause/effect relationships, 6–8, 32, 57, 58,
78, 426, 463
see also determinants and dynamics
character, 37, 44, 70, 216, 510
Charles I, 294
Charles V, 267, 270
Chiang Kai-shek, 210
Chile, 481
China, 1, 10, 11, 14, 23, 30, 45, 46, 50, 72,
89, 132, 202, 206, 229, 245, 256–57,
263, 265, 291, 353, 363–422, 497
Americans’ view of, 455
asset returns in, 226
backwardness of, 407, 420
balance of goods and services exports andimports of, 353–54
Belt and Road Initiative in, 400, 419,
434, 437
Boxer Rebellion in, 394
Britain and, 300, 309, 372–73, 393–95,
406
capitalism in, 45, 79, 97, 349, 382, 398,
405, 406, 417, 420
Century of Humiliation in, 196, 263,
300, 372, 395, 406, 434
civil war in, 159, 186, 188, 206, 338, 388,
391, 393–94, 400, 447
collective in ideology of, 383–84, 448
Communist Party in, 34, 159, 264,
349, 398–400, 403, 417, 419, 420,
435, 451
computer analysis of the conditions ofand prospects for, 518–20
Confucian and Neo-Confucian
philosophy in, 248, 254, 364, 368, 377,
380, 382–83, 390, 397
constitution of, 406, 419
COVID-19 pandemic in, 420, 450, 455
Cultural Revolution in, 159, 402–4, 409
culture and ways of operating in, 364,
382–85, 447–55
currencies in, see Chinese currencies andmonetary systemdebt in, 415, 416, 445, 479

decline of, 196, 249, 367, 393–95
Deng in, 161, 164, 348–49, 353, 364, 367,
381, 398, 399, 405–9, 411–13
East and South China Seas area and, 418,
434, 446, 447, 503
economy and economic policies of,
367–68, 380, 381, 385–93, 400–403,
405–17, 428, 430, 447
education in, 400, 421–22, 431–32
from 1800 until now, 393–422
Eurozone countries compared to, 329
exploration by, 257
foreign policy of, 418
Gang of Four in, 399, 404, 409
GDP of, 405
geography and geology of, 68, 377–78,
384
globalization and, 408–10, 414–15,
418–19, 437
goods produced by, 256, 300, 372, 394
government structure and decisionmaking in, 384, 405–6, 448
Great Leap Forward in, 402
history of, 368–82
history as viewed in, 379, 380
Hong Kong and, 393, 406, 434, 435,
449, 453
inflation in, 391, 400–402
influence of, 438
innovations in, 30, 254, 476
intellectual property and, 428, 432–33
internal order/disorder cycle in, 150, 153,
155, 156, 159–62, 164, 166, 172, 175,481
isolationism of, 257, 262, 377, 384, 401,
420
Japan and, 101, 196, 205, 210, 447
leader choices in, 450–51
legalism in, 380, 382, 383, 397
Made in China 2025 plan of, 381, 400,
418
Mao in, 161, 188, 348, 364, 377, 380,
381, 383, 395, 397–404, 409, 420,
434
Marxism-Leninism in, 380, 382, 383,
395–98, 405, 417
measures of power of, 365–67
military philosophy in, 384
military strength of, 447, 487–88
in 1949–1976, 400–405
in 1978–2012, 405–14
Nixon’s visit to, 404

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INDEX

China (cont.)
opening of, 420–21
in Opium Wars, 257, 300, 309, 372–73,
377, 394
peak health stage and, 88
People’s Bank of China in, 400
People’s Republic of China founded, 388,
400, 401
Politburo in, 406, 408, 415
political cycles in, 502
poverty in, 402, 405, 407, 409, 412
regaining of lost territories as goal of,406
in relative standing of empires, 38–40
rise of, 353, 367, 398–422, 489, 496–97
Russia and, 439
Soviet Union as ally of, 401, 402
Soviet Union as enemy of, 402–4
stereotypes and media distortions about,
365
Stock Exchange Executive Council in,
408–9
succession crisis in, 404–5
Taiping Rebellion in, 373, 393n
Taiwan and, 197, 198n, 341, 393, 394,
404, 411–12, 426, 434–36, 447, 449,
455, 489, 503
Taoism in, 380, 382, 383
technological advancement in, 432, 447
Tiananmen Square incident in, 409
Western powers’ movement into, 262–63
as world power, 415–22
World War II and, 391
Xi in, 367–68, 381, 398, 400, 415–17,
419–20, 430, 437
China International Trust Investment
Corporation (CITIC), 406–9
China-United States relations and wars, 13,198n, 201, 209, 341, 358, 363–65, 399,
404, 410, 414, 416, 418–19, 423–59,
486–90, 501–3
capital war, 440–46, 487, 490
China’s economic plans and, 381
and collective vs. individual, 383–84, 448
culture war, 447–55
Deng and, 399, 405
emergence of conflicts in, 414–15
geopolitical war, 434–40, 446–47, 487,
490
Korean War and, 401
leadership changes and, 439
leadership differences and, 379–80

Made in China 2025 plan and, 381, 400,
418
military war, 435, 436, 446–48, 487–89
philosophical differences and, 380
positions the Americans and Chinese arein, 424–27
risk of war in, 379–80, 455–56
sanctions and, 440, 441, 443
Taiwan and, 197, 198n, 341, 393, 394,
404, 411–12, 426, 434–37, 447, 449,
455, 489, 503
technology war, 430–34, 487, 490
trade/economic war, 427–30, 487, 490
US debt to China in, 48, 209, 399, 410,
425
and war with ourselves, 426, 448, 456–59
Xi and, 400
Zhou and, 404
Chinese currencies and monetary systems,
136, 138, 139, 385–93, 445
dollar and, 391–92
gold and, 390–92
renminbi, 108, 388, 391, 444–45
reserve currencies and, 389, 425, 479
yuan, 385, 388
Chinese dynasties, 2, 23, 59, 127, 138, 155,
172, 364, 369, 384, 389, 403, 426
Han, 369
Ming, 74, 156, 166, 247–48, 249, 257,
371–72, 376, 377, 388, 390
natural disasters and, 375, 377
Qin, 368–69
Qing, 156, 263, 372–73, 376, 377, 390,
391, 393, 394
Song, 129, 370–71, 376, 377, 387–90
Tang, 23, 74, 160, 162, 172, 364, 369–70,
386–87, 390
typical cycles of, 373–78
wars of, 384
Xia, 368
Yuan, 371, 376, 377, 388
Chinese World Order, The (Fairbank, ed.),
385n
Churchill, Winston, 161, 459
civil engineers, 161
civility, 44, 510
civil wars, 25, 50, 92, 95, 152–59, 161, 167,
168, 170, 175, 179, 180, 183–90, 195,
259, 270, 361
in China, 159, 186, 188, 206, 338, 388,
391, 393–94, 400, 447
in England, 93, 175, 270n, 294

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foreign powers and, 189
how they transpire, 187–90
in Spain, 208
in US, 136, 138, 160, 183, 334, 335
see also revolutionsclass distinctions, 95–96
class struggles and warfare, 75–76, 91–97,
175
climate change, 491–94
Clinton, Bill, 412
Colbert, Jean-Baptiste, 301
colonialism and exploration, 85, 94, 211,
244, 255–57, 275, 372
Commercial Revolution, 251–53
Common Market, 324
communism, 32, 35, 79, 97, 176, 185, 324,
343, 348, 352, 397
in China, 45, 159, 264, 349, 398–400,
403, 417, 419, 420, 435, 451
democratic centralism and, 398
invention of, 263–64
stereotypes about, 417
Company of the West, 302
computer analysis of the conditions of,and prospects for, the world’s leading
countries, 513–57
China, 518–20
Eurozone, 522–24
France, 542–44
Germany, 526–28
India, 534–36
Japan, 530–32
Netherlands, 546–48
Russia, 550–52
Spain, 554–56
United Kingdom, 538–40
United States, 514–17
computing, 431, 474
artificial intelligence (AI), 431, 474–75
quantum, 431, 474–75, 489
semiconductors, 434
Confucian and Neo-Confucian philosophy,
248, 254, 364, 368, 377, 380, 382–83,
390, 397
Congress of Vienna, 262, 307–8, 314, 318
consumer price index (CPI), 144–45
Copernicus, Nicolaus, 260
cost competitiveness, 90, 495, 497, 506
countries, kingdoms, and empires, 15–16
COVID-19 pandemic, 2, 34, 56, 103, 107,
113, 122, 123, 126, 171, 352, 353, 358,
420, 450, 453, 455

credit, 103, 111, 115, 207, 222, 223
buying power vs., 84
central banks’ creation and control of,106, 113, 114, 143–44, 218–19
collapse of, 34
coronavirus crisis and, 126
fixed amount in existence, 106
fundamentals of, 104–9
intrinsic value lacking in, 110–11
money and wealth and, 111–16
redistribution of, 125
see also debt; money, credit, debt, andeconomic activity cycle
Crimean War, 309
Critique of Pure Reason (Kant), 379–80
Cromwell, Oliver, 294
culture, 73–74
culture wars, 426
between US and China, 447–55
currency(ies), 12, 14, 124, 276, 390
breakdowns in systems of, 133
death of, 124, 132
foreign, 127gold standard and, 136
linked systems of, 117real value of, 390
see also money and monetary systems;
specific currencies
currency(ies), reserve, 12, 32, 46–48, 58,
108–9, 126, 134, 320, 390, 426, 508
central banks’ shares of, 441
China and, 389, 425, 479
defined, 12
dollar as, 12, 331, 334, 343–45, 352, 410,
440–45, 478
future and, 477–80
gold vs., 134
guilder as, 147, 272, 277, 280–81, 283,
287
losing status of, 145–47
pound as, 146, 147, 287, 290, 292, 300,
309, 310, 320–21, 436
power of, 109
currency empires, see empires
currency values, 131–47, 207
awareness of, 131
devaluation, 111, 119, 124, 125, 132–36,
145–47, 172, 233–35, 342, 445
in relation to gold, 134–44, 146, 147
in relation to goods and services,
144–45reserve currency status and, 145–47

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cycles, 1–4, 8, 9, 14, 499
alignment of, 4
determinants vs., 63nevolution and, 27–31, 78
extremes in, 4, 26
in future, 464, 470–72, 500–503
reasons for, 36
uptrend and, 31–37
see also Big Cycle; external order anddisorder cycle; internal order anddisorder cycle; money, credit, debt, andeconomic activity cycle
Dalio, Matt, 411
Dano-Swedish War, 281
Danton, Georges-Jacques, 187
data collection, 431
debt, 56, 89, 105–7, 110, 111, 115, 132, 172,
233, 337, 342, 343, 345–46, 508–9
assets and, 118
credit collapse and, 34
earnings and, 118
equity and, 106, 108
long-term cycles of, 114–30, 133, 233
monetization of, 123–24
reserve currency and, 12
restructuring of, 118, 119, 125, 207, 346,
351
short-term cycles of, 112, 114–15
see also credit; money, credit, debt, andeconomic activity cycle
debt assets, 118–19
decadence, 173
declining countries, 89
deflation, 112, 115, 119, 125, 207, 351–52
demand for goods and services, 112, 131
democracy(ies), 5, 35, 50, 79, 96, 97, 101,
177, 181–82, 199, 319, 383, 397, 420,
450–51, 469
Democrats, 356–57, 482–83
Deng Xiaoping, 161, 164, 348–49, 353, 364,
367, 381, 398, 399, 405–9, 411–13
depressions, 37, 69, 112, 196, 470
deflationary, 207, 351–52
Great Depression, 4, 7, 34–37, 103,
202–3, 205–7, 318–19, 337, 350, 354,
464, 465
Descartes, René, 255
Destined for War (Allison), 490
destruction/reconstruction periods, 36–37
determinants and dynamics, 57–79, 81–102,
365, 456, 473, 506–11

ability to learn from history, 72balance of power that drives the peace/
war cycle within and between
countries, 77–78, 99–102
big multigenerational psychological cycle,
72, 85–89
capital markets, 71–72
class struggles, 75–76, 91–97
culture, 73–74
cycles vs., 63n
drive for wealth and power, 24–25, 71,
83–85, 197
eight measures of wealth and power, 18,
41–43, 64, 292, 329, 365–67, 514
exploration, 67–78
favoring short-term gratification overlong-term well-being, 72–73, 505
future and, 495–500
genealogy, 69
geography, 68
geology and natural resources, 68–70,
509
human capital, 67, 70–71
human nature, most important, 71–73
inherited, 67–69
interactions of, 62, 65–66
inventiveness, 73, 89–91, 473–76
leadership as, 74–75
list of main dynamics to pay attention
to, 66
military strength and the peace/war
cycle, 78
natural disasters, see nature, acts ofopenness to global thinking, 74
in perpetual-motion machine model,
57–62, 78–79
political left and right, 10, 76, 97–99
prisoner’s dilemma and, 76–77, 198, 199
self-interest, 71, 81–83
shaped by culture, 73–75
shaped by how individuals and groupsinteract with each other, 75–78
values gaps, 12–13, 56, 75, 127, 164,509–10
wealth gaps, 10–13, 32, 35, 36, 47, 56, 75,
101, 127, 164, 166, 208, 313–14, 334,
337, 353, 356, 413–14, 475, 509–10
win-win vs. lose-lose relationships, 77
see also Big Cycle
determination, 510
dialectical materialism, 396, 397
Digital Revolution, 469

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disorder, see external order and disordercycle; internal order and disorder cycle
Disraeli, Benjamin, 294
diversification, 504–5
Dodge Plan, 343, 344
dollar, 108, 115, 116, 127, 132, 140, 146,
147, 346
ascent of, 334–37
Bretton Woods and, 140, 327, 342, 343,
347
Chinese currency and, 391–92
as reserve currency, 12, 331, 334 343–45,
352, 410, 440–45, 478
Draghi, Mario, 360
Dutch, Netherlands, 2, 14, 23, 39, 44–47,
55, 71, 94, 211, 261, 264, 291, 367, 426
arc of, 267
asset returns and, 226
Bank of Amsterdam in, 273, 276–77,
283–87, 288n
Big Cycle rise and decline of, 265–90
Britain and, 280, 282–85, 287, 289, 292,
297–300
British wars with, 146, 147, 281, 282, 286
capital markets cycle of, 275–77
computer analysis of the conditions ofand prospects for, 546–48
currency values and, 147
decline of Dutch Empire, 284–90, 292
education of, 273, 280
in Eighty Years’ War, 271–72, 281
financial decline of, 281, 283
index of key determinants in, 266
inventions in, 273–75, 279–80
in new world order following the ThirtyYears’ War, 277–79
in relative standing of empires, 38–40
rise of, 271–79
standing of, relative to other great
powers, 279–80
top phase of, 279–84, 300
transition from Spanish/Habsburg
Empire to Dutch Empire, 265–71
wars of, 281–82
Dutch East India Company, 45, 272,
275–76, 279, 280, 283, 285–89
Dutch guilder, 265, 272–73, 276–77,
280–81, 283–84, 287, 478
exchange rates of, 287–88
as reserve currency, 147, 272, 277,
280–81, 283, 287
dynamics, see determinants and dynamics

e-commerce, 431
economic activity cycle, see money, credit,
debt, and economic activity cycle
economic growth rates, 9–10
between US and China, 427–30
economic output, 507
economy, financial vs. real, 111–13, 131
education, 506
in Britain, 295
in China, 400, 421–22, 431–32
Dutch, 273, 280
in Germany, 315
literacy, 248, 273, 295, 301
STEM, 421, 431–32
universities, 273, 301, 315, 421
in US, 331, 334, 344, 421–22, 431–32
egalitarianism, 245
Egypt, 454
Eighty Years’ War, 271–72, 281
embargoes, 209, 211
emerging countries
early-stage, 86
late-stage, 87
empires, 3, 5, 14, 23, 56, 58, 244–45
archetypical rise and decline of, 42
Big Cycle of rise and decline of, see Big
Cycle
determinants of wealth and power in,
41–43
elements of a great empire, 44–46,
456–58in 1500, 246–51
kingdoms and countries and, 15–16
relative standing of, 38–40
employment, 344, 353
unemployment, 344, 345, 358–59
England, see Britain
Enlightenment, 30, 196, 245, 260–62, 279,
295, 300–301
entrepreneurs, 30, 32, 222
equity, and debt, 106, 108
Erasmus, 255
euro, 328, 443–44
Europe, 245, 294, 329, 358, 414, 424,
454
alliances in, 229
cycles of internal and external peace andconflict in, 195–96
in 1500, 246–47
GDP in, 330
Napoleon and, 262
rivalries in, 317

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Europe (cont.)
unemployment rate and central bankbalance sheet of, 358
after World War II, 326–28
European Central Bank, 108
European Coal and Steel Community, 328
European Union (EU), 327–29, 443–44
Eurozone countries, 108, 329
computer analysis of the conditions ofand prospects for, 522–24
evolution, 27–31, 73, 78, 153, 154
future and, 464–69, 474
inventiveness and, 474
exploration and colonialism, 85, 94, 211,
244, 255–57, 275, 372
external order and disorder cycle, 13, 26, 27,
62, 64, 193–216, 502, 511
in Europe, 195–96
future and, 485–90
timeless and universal forces in, 197–201
World War II as case study in, 201–15
see also wars
external orders, 59–60
internal orders and, 193fabi, 388
Fairbank, John, 385n
fascism, 79, 97, 174, 176, 179, 182, 202, 203,
208, 212, 383
defined, 205–6
Federal Reserve, 103, 108, 123, 138, 169,
207, 208, 336, 337, 343, 346–50, 354,
355, 356, 358, 360, 442
Ferdinand I, 270
fiat money, 120–21, 129–30, 137, 142, 143,
223, 347, 386–88, 390–91, 444
financial centers, 508
London, 46, 282, 292, 300, 322, 335
New York, 46, 326, 327, 334, 335, 344
financial crisis of 2008, 8n, 9, 122, 123, 352,
354, 355, 367, 399, 414, 420
fintech, 431
First Anglo-Dutch War, 281
5G technology, 431
Fourth Anglo-Dutch War, 146, 147, 282,
286
franc, 132, 140
France, 14, 23, 142, 147, 208, 211, 229, 246,
279, 300–307, 317, 336
American Revolution and, 303, 304
asset returns in, 226
Banque Générale in, 301

computer analysis of the conditions ofand prospects for, 542–44
currency vs. gold in, 306
Estates General in, 304
GDP of, 304
Germany and, 317
inflation in, 305
Louisiana and, 302
Napoleon in, 160, 161, 262, 293, 305–7,
308npolitical decision-making system in, 304
Reign of Terror in, 101, 159, 176, 305
Revolution in, 94, 159, 161, 176, 186–89,
278, 308n
Second Empire in, 187
in 17th and 18th centuries, 94
wars of, 302–3
Wars of Religion in, 270n
in World War II, 140, 338
Franco, Francisco, 208
Franco-Dutch War, 281
Franco-Prussian War, 317
future, 463–511
acts of nature in, 491–94
anticipating, by studying the past, 5–8
cycles and bumps in, 464, 470–72,
500–503
dealing with what you know and what
you don’t know, 503–5
debt/money/capital market/economic
cycle and, 477–80
evolution and, 464–69, 474
external order and disorder cycle and,
485–90GDP growth estimates for, 499–500
internal order and disorder cycle and,
480–85, 501, 502
inventiveness in, 473–76
major determinants across the world,495–500
next ten years, 499–503
quality indicators of, 464, 472–73
short-term debt/money/economy cycle in,
501, 502
worst-case scenarios in, 504
G7 countries, 349
G20 countries, 415
Galileo Galilei, 260
Gang of Four, 399, 404, 409
Gates, Bill, 70
GDP, 467, 507, 508

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INDEXof Britain, 299, 313, 316
capitalism and, 260
of China, 405
of European countries, 330
of France, 304
of Germany, 316, 319
global, 156
growth estimates for next ten years,
499–500of Japan, 319
in last 500 years, 29–30, 34
in poor countries, 89
of US, 207, 345, 347
World War II and, 35
genealogy, 69
General Motors, 429
generational psychological cycle, 72,
85–89
Genghis Khan, 162geography, 68
geology and natural resources, 68–70,
509
geopolitical wars, 194–95, 426, 486, 487
between US and China, 434–40, 446–47,
490
Germany, 14, 23, 35, 48, 50, 187, 202,
209, 229, 258–59, 314–19, 336, 345,
479
asset returns in, 224–25
Britain and, 312, 314, 316, 317
computer analysis of the conditions ofand prospects for, 526–28
currencies and currency value in, 132,
136, 140, 142, 143
depression in, 202–3, 318
education in, 315
France and, 317
GDP of, 316, 319
internal order/disorder cycle in, 160, 161,
163–64inventions in, 315–16
manufacturing output of, 316
military in, 317
Nazi, 175, 179, 327
Nazi, in World War II, 140, 202–4,
207–10, 212, 214, 224, 319, 338
Russia and, 317
unification of, 314–15
Weimar, 116, 127, 129, 139, 182
in World War I, 202–3
Gilded Age, 36, 221, 263, 336
Gladstone, William, 163, 294

globalization, 74, 83, 352–53
China and, 408–10, 414–15, 418–19, 437
global warming, 491–94
Glorious Revolution, 282, 294
glossary of terms, 557
gold, 116, 117, 119–21, 124, 126, 127, 133,
214, 215, 222, 223, 324, 444
China and, 390–92
currency values and, 134–44, 146, 147
exchange rates between guilder andpound and, 287–88
French currency vs., 306
60/40 stock/bond portfolios and, 234–35
government
approaches to, 205–6
bureaucracies, 152–57, 160–62, 173–74
central, 219
Great Britain, see Britain
Great Depression, 4, 7, 34–37, 103, 202–3,
205–7, 318–19, 337, 350, 354, 464, 465
Greeks, 89, 253, 260
Gu, Madame, 409, 411
guilder, 265, 272–73, 276–77, 280–81,
283–84, 287, 478
exchange rates of, 287–88
as reserve currency, 147, 272, 277,
280–81, 283, 287
Gulf Wars, 340“guns and butter” policy, 121, 197, 345
Habsburg Empire, 246, 255, 258, 277–79,
278n, 315arc of, 268
Dutch Empire and, 265–71
Han Dynasty, 369
Henry III, 93
Henry the Navigator, 255
history, 503
ability to learn from, 72
cycles in, see cycles“rhyming” of, 18, 57
studying, to anticipate the future, 5–8
history, last 500 years of, 243–64
Africa in, 250
Age of Revolutions in, 261–62
Americas in, 250
Asia in, 247–50
capitalism invented, 30, 44, 94, 259–60,
275, 279
Commercial Revolution in, 251–53
communism invented, 263–64
egalitarianism and, 245

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INDEXhistory, last 500 years of, (cont.)
empires in, 246–51
Enlightenment in, 30, 196, 245, 260–62,
279, 295, 300–301
Europe in, 246–47
exploration and colonialism in, 85, 94,
211, 244, 255–57, 275
family-run states in, 244–45, 247
GDP in, 29–30, 34
Industrial Revolution in, see Industrial
Revolution
Middle East in, 250
Napoleonic Wars in, 196, 209, 262, 293,
306–7, 318, 320
Reformation in, 258–59, 269, 270
Renaissance in, 30, 196, 253–55
Scientific Revolution in, 30, 260
and “size” of the world, 244
Thirty Years’ War in, 15, 196, 259, 270,
271, 277–79, 281, 294
Western powers’ movement into Asia in,
262–63the world in 1500, 243–45
Hitler, Adolf, 203–4, 208–10
Hobsbawm, Eric, 315n
Holy Roman Empire, 246, 258, 267, 269,
270, 278
Hong Kong, 393, 406, 434, 435, 449, 453,
481
Hongwu Emperor, 371
housing, 344
Houston Rockets, 453
Huawei, 431–33, 439
huizi, 387–88
Hu Jintao, 399, 406, 412
human rights issues, 454
ideology, 13, 24, 75, 98, 150, 160, 195, 210,
278, 294, 338, 357, 365, 401, 403
if/then statements, 7
IMF, 327, 438
imports, cutting off, 429–30
Incan Empire, 250, 255
income statements, 105
India, 10, 14, 23, 153–54, 172, 250, 256,
262–63, 323–24, 414, 424, 447
Britain and, 85, 263, 309n
computer analysis of the conditions ofand prospects for, 534–36
Mughal Empire in, 85, 250, 263
Rebellion of 1857 in, 85
Western powers’ movement into, 262–63

Industrial Revolution, 30–31, 196, 279, 280,
282, 297–300, 310
First, 30, 94, 261, 263, 397
Second, 94, 137, 142, 163, 221, 263, 312,
334, 336
inflation, 112, 115, 119, 124, 133, 144,
218–19, 237
in China, 391, 400–402
in France, 305
in US, 345–49, 351–52
infrastructure, 54, 88, 165–66, 172,506–7
innovation, inventiveness, 336, 337, 476,
494, 506
in China, 30, 254, 476
as determinant, 73, 89–91, 473–76
future and, 473–76
productivity and, 90–91
see also technology
intellectual property, 428, 432–33
interest rates, 107, 115, 119, 122, 123, 133,
137, 144, 233, 237, 343, 345, 348, 349,
351–52, 414
lending with, prohibition of, 221–22
internal order and disorder cycle, 12–13, 26,
27, 50, 62, 64, 149–91, 201, 509
beginning of new order and newleadership’s consolidation of power in,
152–60in China, 150, 153, 155, 156, 159–62,
164, 166, 172, 175, 481
class warfare in, 76
evolution of, 153, 154
excesses in, 152–57, 165–66
financial problems and intense conflict in,
152–57, 167–83
foreign powers in, 188–89
future and, 480–85, 501, 502
GDP and, 156
peace in, 152–57, 162–65
prosperity in, 152–57, 160–66
resource-allocation systems andgovernment bureaucracies in, 152–57,
160–62six stages of, 151–90
in US, 150–51, 153, 158, 160, 161,
163–65, 167–71, 174–75, 182, 183,
360, 481–85
see also civil wars; revolutions
internal orders, 59–60, 78, 105, 149
external orders and, 193
International Court of Justice, 438

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international order, see external order anddisorder cycle; external orders; worldordersinvestingdiversification in, 504–5
purpose of, 237
traditional approach to, 220
investing in light of the Big Cycle,
217–38asset returns across the great powers,
224–26
building blocks of a well-diversified
portfolio, 219–20
gold returns during 60/40 drawdowns,
234–35
impact of taxes on rolling 20-year S&P
total returns, 232interest vs. devaluation risk, 235
market determinants and, 218
risk and, 224
stock market closures and, 231
strict/rising capital controls and, 230
wealth confiscation periods and,
229–30worst investor experiences across majorcountries, 227–28
Iran, 209, 250, 358, 454
hostage crisis in, 348
Israel, 454
Italy, 132, 182, 187, 202, 222, 244, 319,
336, 338
asset returns in, 226
currency value and, 136, 140, 142
Japan, 14, 23, 35, 50, 132, 165, 182, 187,
202, 229, 250, 256, 319, 336, 345, 358,
394, 414, 424
asset returns in, 224–25
China and, 101, 196, 205, 210, 447
computer analysis of the conditions ofand prospects for, 530–32
currency value and, 136, 138, 140, 142
GDP of, 319
depression in, 205
isolationism of, 257, 262
Meiji Restoration in, 161, 172, 185–86,
263
military aggression of, 205, 208, 210–12
Pearl Harbor attacked by, 212, 213
Taiwan and, 394
unemployment rate and central bankbalance sheet of, 358

Western powers’ movement into, 262–63
in World War II, 202, 205, 208–14, 224,
319, 338, 343, 418, 429, 446
Japanese yen, 108, 132, 444
Jews, 175, 203, 221
Jiang Zemin, 399, 406, 412
Ji Chaozhu, 404
Jobs, Steve, 70
John, King, 93
Johnson, Lyndon, 164
Jubilee years, 128, 478
Judeo-Christian philosophy, 380, 382, 435
Kant, Immanuel, 379–80
Kennedy, John F., 164
Kennedy, Paul, 248–49
Khrushchev, Nikita, 402
kingdoms, 15–16, 244–45
Kissinger, Henry, 307, 403, 404
Korea, 401
Korean War, 340, 401
Kublai Khan, 371
Ku Klux Klan, 179
labor unions, 348, 349
Lafayette, Marquis de, 188
Latin America, 165, 347
Law, John, 301–2
leaders, 74–75, 101choosing, 79, 450–51
in civil wars and revolutions, 189–90
consolidation of power by, 152–60
in periods of excess, 166
League of Nations, 139, 193–94, 203, 318,
340
Lee Kuan Yew, 161, 164, 166, 364, 408
Lee Teng-hui, 411
legalism, 380, 382, 383, 397
Lend-Lease Act, 211
Lenin, Vladimir, 188
life expectancy, 29–30, 466, 475
Lin Biao, 403
literacy, 248, 273, 295, 301
Locke, John, 262
London, 46, 282, 292, 300, 322, 335
long-term well-being and short-term
gratification, 72–73, 505
looping, 396
lose-lose relationships, 77, 199, 200
Louis XIII, 278n
Louis XIV, 166, 302
Louis XVI, 304–5

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Luo Guanzhong, 480
Luther, Martin, 258, 269–70
Maastricht Treaty, 328
MacArthur, Douglas, 401
Macau, 406
Machiavelli, Niccolò, 278n
Magna Carta, 93
Malaysia, 418
Mao Zedong, 161, 188, 348, 364, 377, 380,
381, 383, 395, 397–404, 409, 420, 434
Marat, Jean-Paul, 187
Marie Antoinette, 304
Marshall Plan, 343, 344, 419
Marx, Karl, 380
Marxism-Leninism in China, 380, 382,
383, 395–98, 405, 417
Mary II, 282
McCormick, David, 415
media, 176–78, 365
Medici family, 222, 253–54
Mexico, 250, 256, 350
Middle East, 250, 418, 436, 454
military strength, 78, 299–300, 447, 487–
88, 507–8
Ming Dynasty, 74, 156, 166, 247–48, 249,
257, 371–72, 376, 377, 388, 390
Mississippi Company, 302
money, credit, debt, and economic activity
cycle, 9, 26, 27, 34, 62, 64, 103–30,
201, 223and definition of money, 109–11
fundamentals of money and credit in,
104–9
future and, 477–80
long-term debt and capital markets in,
11–12
long-term debt cycles in, 114–30, 133,
233
money, credit, and wealth in, 111–16
short-term debt cycles in, 112, 114–15,
501, 502
money and monetary systems, 4–6, 103,
133, 354–55
Bretton Woods, see Bretton Woods
systembuying power vs., 84
cash, 124
creation and control of, 89, 106, 108,
113, 118–25, 132–33, 136, 143–44,
146, 172, 207, 218–19, 223, 233, 343,
355–56, 358

credit and wealth and, 111–16
definition of, 109–11
fixed amount in existence, 106
fundamentals of, 104–9
intrinsic value lacking in, 110–11
as medium of exchange, 109–10, 117
post–World War II, 342–45
quantitative easing and, 13, 354
redistribution of, 125
as storehold of wealth, 109–10, 117
Type 1 (hard), 116–20, 126, 128–30, 386
Type 2 (paper), 117, 119–20, 129–30,
386–88, 390
Type 3 (fiat), 120–21, 129–30, 137, 142,
143, 223, 347, 386–88, 390–91, 444
value of, see currency values
see also currency
Mongols, 40, 162, 371, 377
Montesquieu, 262, 301
Morey, Daryl, 453
mortgages, 106, 344, 347
multigenerational psychological cycle, 72,
85–89
Musk, Elon, 70
mutually assured destruction, 100, 436,
488–90, 502
Napoleon, 160, 161, 262, 293, 305–7, 308n
Napoleonic Wars, 196, 209, 262, 293,
306–7, 318, 320
nationalism, 83, 414
National Bank of Belgium, 323
NATO (North Atlantic Treaty
Organization), 326, 340
natural resources, 68–70
nature, acts of, 33, 35, 37, 62–63, 69, 207,
510–11Chinese dynasties and, 375, 377
climate change and, 491–94
in future, 491–94
see also pandemics
Nazi Germany, 175, 179, 327
in World War II, 140, 202–4, 207–10,
212, 214, 224, 319, 338
NBA, 453
Nero, 166
Netherlands, see Dutch, Netherlands
Newton, Isaac, 260
new world order(s), 291, 326
coining of term, 318
Congress of Vienna and, 262, 307–8, 318
after Thirty Years’ War, 259, 277–79

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after World War I, 318, 336, 337
after World War II, 36, 56, 103, 140,
201, 319, 326–27, 338
New York, N.Y., 46, 326, 327, 334, 335, 344
New York Times, 177
Nixon, Richard, 6, 121, 140, 346, 348, 360,
404
North Atlantic Treaty Organization(NATO), 326, 340
North Korea, 401, 447
nuclear weapons, 340–41, 488
Ocasio-Cortez, Alexandria, 175
oil, 347, 348, 418, 429
Opium Wars, 257, 300, 309, 372–73, 377,
394
order and disorder, see external order anddisorder cycle; internal order anddisorder cycle
orders, 59–60, 149
see also external order and disorder cycle;
external orders; internal order anddisorder cycle; internal orders; newworld order; world orders
Ordinance of Trade, 301
Ottoman Empire, 40, 247, 250, 251, 270,
309, 336
Panama, 212
pandemics, 2, 33, 69, 470–71, 491
COVID, 2, 34, 56, 103, 107, 113, 122,
123, 126, 171, 352, 353, 358, 420, 450,
453, 455
Spanish flu, 36, 139, 318
Panic of 1866, 311n
Panic of 1907, 36, 137
paradigm shifts, 469
Paris Peace Conference, 139, 318, 336
Paulson, Hank, 415
peace, 196, 414, 480
balance of power that drives the peace/
war cycle within and between
countries, 77–78, 99–102
in internal order and disorder cycle,
152–57, 162–65
military strength and the peace/war
cycle, 78
revolutions and, 101–2
US period of, 337, 344
wars followed by, 279
wealth and opportunity gaps following,
101

Peace of Augsburg, 270
Peace of Westphalia, 82n, 259, 277, 281,
294
peak health countries, 88
Pearl Harbor, 212, 213
Pel, Robert, 294
Perón, Isabel, 187
perpetual-motion machine model, 57–62,
78–79, 150
Perry, Matthew, 263
Persia, 250
personality types, 9Peru, 256, 481
Pew surveys, 455, 482
Philip II, 270–72
Philip III, 271
Philippines, 418
Pitt, William, the Elder, 294
Pitt, William, the Younger, 294
Plato, 450
Poland, 206, 210
politics
left and right in, 10, 76, 97–99, 350,
451–52polarization and extremism in, 12–13,
49, 174–76, 319, 356–57, 360–61,
482–83
Polo, Marco, 256, 388
population, world, 465–66
populism, 10, 11, 49, 50, 174–76, 181, 202,
319, 414
Portugal, 94, 244, 255, 256, 276, 406
pound, 14, 108, 132, 311, 444, 478
average share in central bank reserves,326
crisis years and devaluation of,
322–26decline in, 320–21
exchange rates of, 287–88
as reserve currency, 146, 147, 287, 290,
292, 300, 309, 310, 320–21, 436
povertyin China, 402, 405, 407, 409, 412
people and their countries are poor andthink of themselves as poor, 85–86,
89
people and their countries are poorer andstill think of themselves as rich,
88–89
people and their countries are rich but
still think of themselves as poor,
86–87

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power, 92, 94, 96, 103
alliances and, 99–100
balance of power that drives the peace/
war cycle within and between
countries, 77–78, 99–102
Big Cycle shifts in, 38–41
decline of, and decline of wealth, 85
drive for, 24–25, 71, 83–85, 197
eight measures of wealth and power, 18,
41–43, 64, 292, 329, 365–67, 514
and fighting among winners, 101
handling wisely, 200–201
having, 200“purge” state and, 101
reserve currencies and, 109
soft and hard, 200
respect for, 200
unneeded, 201
and war to determine winners and losers,
100
wealth and, 84–85
power/purge periods, 159–60
presidential elections, US, 502
of 2016, 10, 175, 356, 418
of 2020, 100
prices of things vs. value of things, 113
Principles: Life and Work (Dalio), 200n, 396
Principles for Navigating Big Debt Crises(Dalio), 119, 125, 130, 139, 207n, 354
printing press, 30, 248, 254, 258, 270, 371n
prisoner’s dilemma, 76–77, 198, 199
productivity, 28–32, 73, 90–92, 172, 298,
312, 337, 346
innovation and, 90–91
wealth and, 84
Progressive Era, 334
prosperity, 196, 337, 414
in internal order and disorder cycle,
152–57, 160–66
in US, 337, 344, 345
Protestantism, 258–59, 269, 278
Prussia, 311, 315
psychological multigenerational cycle, 72,
85–89
publishing industry, 254, 273, 301
purchasing power, 84, 107, 109, 144–45,
223, 237
Qin Dynasty, 368–69
Qing Dynasty, 156, 263, 372–73, 376, 377,
390, 391, 393, 394
quantitative easing, 13, 354

Reagan, Ronald, 349, 352
reflation, 124
Reformation, 258–59, 269, 270
religion(s), 24, 75, 150, 163, 254, 258, 260,
262, 268n, 269, 270n, 278, 294, 339
Catholic Church, 246, 259, 268n, 277–78
in 1500, 245
Judeo-Christian philosophy, 380, 382,
435
lending with interest prohibited in,
221–22
Protestantism, 258–59, 269, 278
Reformation and, 258–59, 269, 270
Renaissance, 30, 196, 253–55, 260
renminbi, 108, 388, 391, 444–45
Republicans, 356–57, 482–83
reserve currencies, see currency, reserve
resource allocation, 160, 510
revolutions, 25, 32, 37, 50, 76, 92, 95, 101–2,
158–59, 161, 168, 170, 175, 176, 180,
183, 186, 361, 396
Age of, 261–62
American, 199, 282, 284, 303, 304, 333
French, 94, 159, 161, 176, 186–89, 278n,
308n
Russian, 159, 184–86, 188, 206, 318
how they transpire, 187–90
see also civil wars
Richelieu, Cardinal, 278
Rise and Fall of the Great Powers, The(Kennedy), 248–49
Roaring ’20s, 34, 36, 103, 139, 318, 337
Robespierre, Maximilian, 187
Romance of the Three Kingdoms (Luo), 480
Romans, 89, 91n, 127, 160, 162, 166, 172,
182, 252, 253, 260
Rong Yiren, 407
Roosevelt, Franklin D., 35, 50, 103, 160,
207, 211–12, 343n, 360
Royal Society, 260
ruble, 342
rule of law, 294, 295, 308, 316, 415, 509
Russia, 14, 23, 50, 161, 209, 229, 246–47,
264, 309, 317, 394, 414, 424, 479
asset returns in, 226
Austria and, 317
Chechen Republic and, 411
China and, 439
computer analysis of the conditions ofand prospects for, 550–52
Germany and, 317
military strength of, 487–88

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Revolution in, 159, 184–86, 188, 206,318
US sanctions against, 443
sanctions, 209, 213, 440, 441, 443
Sanders, Bernie, 175
Saudi Arabia, 454
Schengen Agreement, 328
Schmidt, Helmut, 349
Schuman, Robert, 327–28
science, 245, 295
Scientific Revolution, 30, 260
see also technology
SEATO (Southeast Asia Treaty
Organization), 340
Second Anglo-Dutch War, 281
self-interest, 71, 81–83
self-sufficiency, 70
semiconductors, 434
Serenity Prayer, 380
Seven Years’ War, 303, 304
Shakespeare, William, 255
short-term gratification and long-term wellbeing, 72–73, 505
silver, 116, 117, 120, 121, 126, 136–39, 214,
222, 223, 256, 271
China and, 385, 388, 390, 391, 394
Singapore, 41, 71, 161, 164, 166, 364, 408,
449
60 Minutes, 398
smallpox, 69
Smith, Adam, 261–62
Smoot-Hawley Tariff Act, 206, 427
socialism, 95, 97–98, 398
Song Dynasty, 129, 370–71, 376, 377,
387–90South America, 250
Southeast Asia Treaty Organization(SEATO), 340
Soviet Union, 161, 185, 187, 202, 206, 352,
401
breakdown of, 352, 488
China as ally of, 401, 402
China as enemy of, 402–4
nuclear weapons of, 340–41
Red Terror in, 101
ruble in, 342
US and, 13, 101, 197, 326, 338–42, 403,
438, 488
in World War II, 206–7, 210, 211, 319
Spain, 50, 94, 132, 182, 186, 187, 202, 246,
255, 268n, 276, 279, 319

Civil War in, 208
computer analysis of the conditions ofand prospects for, 554–56
currency value and, 136, 138
in Eighty Years’ War, 271–72
exploration by, 244
Habsburg Empire and, see Habsburg
EmpireSpanish flu, 36, 139, 318
Spanish Price Revolution, 256, 270
Stalin, Joseph, 401, 402
Stimson, Henry, 211
stock exchange, first, 275
stock market closures, 231
stock market crashes, 223
of 1929, 35, 202, 207
stocks, 6, 94, 110, 113, 121, 124, 126, 131,
132, 134, 137, 138, 222, 223, 226n,
232, 233, 235, 237, 344, 345, 347, 351,
431, 445
World War II and, 214
Suez Canal, 436
supply and demand, 112, 131
Swiss franc, 132, 140
Switzerland, 41, 71
Syria, 481
Taiping Rebellion, 373, 393n
Taiwan, 197, 198n, 341, 393, 394, 404,
411–12, 426, 434–36, 447, 449, 455,
489, 503
Taiwan Semiconductor Manufacturing
Company, 434
Taizong, 160, 162, 370
Taizu, 370
Tang Dynasty, 23, 74, 160, 162, 172, 364,
369–70, 386–87, 390
Taoism, 380, 382, 383
tariffs, 206, 429
Smoot-Hawley Tariff Act, 206, 427
taxes, 125, 127, 138, 170, 174, 207, 224,
295, 334
impact on rolling 20-year S&P total
returns, 232
on the rich, 207, 208, 334
technology, 29, 44, 62, 353, 476, 506
British inventions, 296–99, 312–13
Dutch inventions, 273–75, 279–80
German inventions, 315–16
Industrial Revolution, see Industrial
Revolution
intellectual property and, 428, 432–33

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technology, (cont.)
US and, 344, 345, 476
war between US and China, 430–34,
487, 490
wars, 194–95, 341, 426, 476, 486
see also innovation, inventiveness
Tencent, 431, 433
Tesla, 70
Thatcher, Margaret, 349
Third Anglo-Dutch War, 281
Thirty Years’ War, 15, 196, 259, 270, 271,
277–79, 281, 294, 318
Tiananmen Square incident, 409
Tibet, 435“too big to fail” syndrome, 122trade, 507
embargoes and blockades, 209, 211
trade/economic wars, 194–95, 426, 486
between US and China, 427–30, 487, 4
90
Treasury, US, 343n, 351, 415
Treaty of Paris, 308n
Treaty of Rome, 328
Treaty of Versailles, 36, 203, 318, 336
Trotsky, Leon, 188
Truman, Harry, 339
Truman Doctrine, 339
Trump, Donald, 10, 175, 356–58, 379, 400,
410, 418, 439, 495
truth, loss of, 176–78

Eurozone countries compared to, 329
Founding Fathers of, 160, 295
GDP of, 207, 345, 347
geography of, 68
Great Depression in, 206
history as viewed in, 379
index of key determinants in, 331–32
individual and class struggles in, 95
inflation in, 345–49, 351–52
influence of, 438
internal order/disorder cycle in, 150–51,
153, 158, 160, 161, 163–65, 167–71,
174–75, 182, 183, 360, 481–85
investing and, 220–21
isolationism of, 314, 337
Marshall Plan of, 343, 344, 419
military strength of, 341, 487–88
New York, 46, 326, 327, 334, 335, 344
in 1970s, 345–49
in 1980s, 349–52
in 1990–2008, 352–55
in 2008–2020, 355–60
nuclear weapons of, 340–41
peace period of, 337, 344
peak health stage of, 88
political extremism in, 356–57,
360–61
post–World War II aid to countries from,343, 344, 438
presidential election cycle in, 502
presidential election of 2016 in, 10, 175,
356, 418
presidential election of 2020 in, 100
prosperity in, 337, 344, 345
in relative standing of empires, 38–40
Revolutionary War, 199, 282, 284, 303,
304
rise of, 333–38
Soviet Union and, 13, 101, 197, 326,
338–42, 403, 438, 488
storming of the Capitol in, 100
technology in, 344, 345, 476
top phase of, 338–60
UK loan from, 322
unemployment rate and central bankbalance sheet of, 358
world governance and influence of, 56,
87–88, 435n
in World War I, 336, 343
in World War II, 202, 206–8, 211–14,
319, 338, 343, 418, 425–26, 429,
446

Uighurs, 435
United Kingdom, see Britain
United Nations, 193–94, 326, 340, 401,
418, 438
United States, 14, 16, 23, 45, 46, 55, 115,
147, 202, 229, 291, 326, 331–61, 367,
426, 469, 496
arc of, from 1750 to the present, 332–33
ascent of capital markets of, 334–37
asset returns in, 224–25
balance of goods and services exports andimports of, 353–54
banks in, 335, 344–45
Civil War in, 136, 138, 160, 183, 334,
335
computer analysis of the conditions ofand prospects for, 514–17
current position in Big Cycle, 360–61
Dodge Plan of, 343, 344
education in, 331, 334, 344, 421–22,
431–32574

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United States–China relations and wars, 13,198n, 201, 209, 341, 358, 363–65, 399,
404, 410, 414, 416, 418–19, 423–59,
486–90, 501–3
capital war, 440–46, 487, 490
China’s economic plans and, 381
and collective vs. individual, 383–84, 448
culture war, 447–55
Deng and, 399, 405
emergence of conflicts in, 414–15
geopolitical war, 434–40, 446–47, 487,
490
Korean War and, 401
leadership changes and, 439
leadership differences and, 379–80
Made in China 2025 plan and, 381, 400,
418
military war, 435, 436, 446–48, 487–89
philosophical differences and, 380
positions the Americans and Chinese arein, 424–27
risk of war in, 379–80, 455–56
sanctions and, 440, 441, 443
Taiwan and, 197, 198n, 341, 393, 394,
404, 411–12, 426, 434–37, 447, 449,
455, 489, 503
technology war, 430–34, 487, 490
trade/economic war, 427–30, 487, 490
US debt to China in, 48, 209, 399, 410,
425
and war with ourselves, 426, 448, 456–59
Xi and, 400
Zhou and, 404
United States dollar, 108, 115, 116, 127,
132, 140, 146, 147, 346
ascent of, 334–37
Bretton Woods and, 140, 327, 342, 343,
347
Chinese currency and, 391–92
as reserve currency, 12, 331, 334 343–45,
352, 410, 440–45, 478
universities, 273, 301, 315, 421
value of things vs. prices of things, 113
values, 47
gaps in, 12–13, 56, 75, 127, 164, 509–10
Venice, 252–53
video games, 449
Vietnam, 418, 447
Vietnam War, 146, 340, 345, 347, 348, 403,
483
Volcker, Paul, 348, 349, 360

Wall Street Journal, 177
Wang Li, 408
Wang Qishan, 383, 408
Wanli Emperor, 166
War of the Austrian Succession, 303
War of the League of Augsburg, 302
War of the Spanish Succession, 302–3
Warren, Elizabeth, 175
wars, 32, 35–37, 51, 69, 480
alliances in, 99–100
balance of power that drives the peace/
war cycle within and between
countries, 77–78, 99–102
capital, 194–95, 426, 486
capital, between US and China, 440–46,
487, 490
civil, see civil wars
culture, 426
culture, between US and China, 447–55
deaths in, 33, 231, 470–72
to determine winners and losers betweensides of equal powers, 100
economic tactics in, 209
fighting among winners of, 101
financial strength and, 197
geopolitical, 194–95, 426, 486
geopolitical, between US and China,
434–40, 446–47, 487, 490
military (shooting or hot wars), 194–97,
208, 426, 486, 487
military, between US and China, 435,
436, 446–48, 487–89
military strength and the peace/war
cycle, 78
mutually assured destruction in, 100,
436, 488–90, 502
with ourselves, 426, 448, 456–59
peace following, 279
prisoner’s dilemma and, 76–77, 198, 199“stupid,” 199
technology, 194–95, 341, 426, 476, 486
technology, between US and China,
430–34, 487, 490
tit-for-tat escalation in, 199, 379, 455–56
trade/economic, 194–95, 341, 426, 486
trade/economic, between US and China,
427–30, 487, 490
types of, 194–95, 426, 486
see also external order and disorder cycle
Warsaw Pact, 326, 340
Washington Post, 177
Watergate scandal, 347, 348

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wealth, 92, 94, 96, 103, 470–71
Big Cycle shifts in, 38–41
as buying power, 84
confiscation periods, 229–30
decline of, and decline of power, 85
drive for, 24–25, 71, 83–85, 197
eight measures of wealth and power, 18,
41–43, 64, 292, 329, 365–67, 514
financial (promises to deliver), 222
gaps in, 10–13, 32, 35, 36, 47, 56, 75, 101,
127, 164, 166, 208, 313–14, 334, 337,
353, 356, 413–14, 475, 509–10
money and credit and, 111–16
money as storehold of, 109–10, 117
people and their countries are poorer andstill think of themselves as rich,
88–89
people and their countries are rich andthink of themselves as rich, 87–88
people and their countries are rich but
still think of themselves as poor,
86–87
power and, 84–85
productivity and, 84
real, per capita, 467
real, vs. financial, 84, 222
redistribution of, 125, 208, 319
Wilhelm II, 317
William III, 282, 294
William the Silent, 271–72
Wilson, Woodrow, 318
win-win relationships, 77, 198, 199
World Bank, 327, 438
World Health Organization, 438
world orders, 59–60, 78, 105, 149, 291
see also new world order
World Trade Organization (WTO), 340,
353, 409–10, 427, 438
World War I, 100, 136, 138–39, 144, 176,
195, 196, 202–3, 210, 220, 224, 317–
18, 327, 336, 379, 436, 447, 465
deaths in, 318
new world order after, 318, 336, 337
US in, 336, 343
years leading up to, 229
World War II, 4–5, 34–37, 39, 100, 101,
103, 115, 122, 143, 136, 195, 196, 220,
224, 319, 320, 327, 337–38, 447, 464,
465, 487, 488

beginning of hot war in, 209–12
Britain in, 140, 146, 176, 211, 214, 319,
320, 338
China and, 391, 393
currency values and, 136, 140, 144
deaths in, 338
economic policies during, 212–15
Europe after, 326–28
as external order and disorder cycle casestudy, 201–15
France in, 140, 338
geopolitical and military systemfollowing, 338–42
Germany in, 140, 202–4, 207–10, 212,
214, 224, 319, 338
Japan in, 202, 205, 208–14, 224, 319,
338, 343, 418, 429, 446
Marshall and Dodge plans following,
343, 344
monetary and economic systems
following, 342–45
new world order after, 36, 56, 103, 140,
201, 319, 326–27, 338
official starting dates in, 208
in Pacific, 208, 212, 425–26
path to, 202
Pearl Harbor attack in, 212, 213
relative standing of great empires
following, 338–39
Soviet Union in, 206–7, 210, 211, 319
stock markets during, 214
US in, 202, 206–8, 211–14, 319, 338,
343, 418, 425–26, 429, 446
US aid to countries following, 343, 344,
438
World War III, 447, 488
Xia Dynasty, 368
Xi Jinping, 367–68, 381, 398, 400, 415–17,
419–20, 430, 437
yen, 108, 132, 444
Yongle Emperor, 257
yuan, 385, 388
Yuan Dynasty, 371, 376, 377, 388
Zheng He, 257
Zhou Enlai, 188, 399, 400, 403, 404
Zhu Rongji, 410, 412

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