Background
As you know, I was drawn to do this research by the unique configuration of three big interrelated forces that are
now having the biggest effects on who has what wealth and power since the 1930-45 period. They are: 1) the big
debt, money, and economic cycle, 2) the big internal cycle of order/disorder (caused by gaps in wealth, values, and
politics), and 3) the big external cycle of peace and war (caused by rising powers, most importantly China,
challenging the leading world power, the United States)1. Since I already covered 1) the big debt/money/economic
cycle in Chapters 2 and 3, and 3) the big cycle of external relations (especially between the United States and
China) in Chapters 5 through 7, I am now going to focus on 2) the big internal cycle of order/disorder. The big
internal order cycle is the most important cycle because how people interact within countries has a much bigger
influence on countries’ strengths and well-being than how people and countries interact with each other
internationally.
Because I wondered how today’s conditions and policies compare with those in the past, I wanted to see where we
are in those cycles and the evolutions that got us there. Obviously the recent movement in the internal order has
been toward greater disorder (especially in the United States)—i.e., people and politicians are now at each other’s
throats to a degree greater than at any time in my 71 years—and these struggles over wealth and power are
becoming more vicious. That led me to study analogous times in history.
By now you know my approach. It is to learn like a doctor learns—by encountering many cases as a global macro
investor over my roughly 50-year career and by studying many historical cases. Studying many cases helps me
understand the cause/effect sequences that drive their progressions. I study them qualitatively and quantitatively
through my experiences, by speaking with pre-eminent experts, reading great books, and digging into stats and
archives. From that learning comes a visualization of an archetypical sequence of how things happen. With that I
study deviations from that archetypical cycle to try to explain them. Then I put these mental models into
algorithms both to monitor conditions relative to my archetypes and to help me make decisions based on them. I
do this continuously and will continue to do it until I die, so what you are reading is a work-in-progress.
To see this picture of continuously evolving systems/orders for controlling wealth and power and the timeless and
universal principles governing them, I had to put many bits and pieces together because history is typically
presented in chopped-up bits and pieces and the single story of the changing world order is too enormous to study
and digest as one whole thing. Because of its enormity, I contained my ambition to trying to understand the last
500 years and China’s dynasties back to the Tang Dynasty around the year 600 pretty well and the eras before then
pretty superficially. I focused on the big trends, the most important cause/effect relationships, and the most
important principles that will help me most now and in the future. Though I am certainly no expert in all of this
history, through my examination of it, the cycles of internal order and disorder and the main reasons for the
changes came out loudly and clearly and provided me with a valuable context for seeing where we are and what
might happen next.
Through this learning process, I saw how countries, like any other organism, have well-defined life cycles. I saw
how changes in internal orders (i.e., countries’ systems for governing internally) and changes in the world order
(i.e., the systems for governing power throughout the world) happen continuously and everywhere in similar and
increasingly interconnected ways that flow together as one all-encompassing story from the beginning of recorded
time up to this moment. My seeing many interlinking cases evolve together helped me to see the patterns that
govern them and to imagine the future based on what I’ve learned. Most importantly I saw how the constant
struggles for wealth and power produced a continuously evolving 1) internal systems/orders and 2) external
systems/orders and saw how these internal and external orders affect each other—with the whole thing (i.e., the
world order) working like a perpetual-motion machine that evolves while doing the same things over and over
again for basically the same reasons.
I saw how the biggest thing affecting most people in most countries through time is how people struggle to
make, take, and distribute wealth and power, though they also struggled over other things, most importantly
ideology and religion. I saw how these struggles happened in timeless and universal ways throughout time, and
how these struggles had huge implications for all aspects of people’s lives, starting with what happened with