On Reforming Capitalism - According to Ray Dalio

Ray Dalio.jpg

Last week, Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund with about $125 billion in assets, wrote “Why and How Capitalism Needs to be Reformed”. His comments included: 

  •  “the income gap [in the U.S.] is about as high as ever and the wealth gap is the highest since the late 1930s … the most intolerable situation is how our system fails to take good care of so many of our children.

  • "capitalism and the American Dream are in jeopardy.

  • the biggest questions are a) [will populists of the right or the left] adversely affect the operations of government, the economy, and international relations or b) whether sensible and skilled people from all sides can work together to reform the system so it works well for the majority of people.

  • “ there need to be powerful forces from the top of the country that proclaim the income/wealth/opportunity gap to be a national emergency.”

  • His recommendations include: 1) create private-public partnerships that focus on social and economic performance, 2) raise money to improve social conditions and economy productivity (e.g. tax pollution and various causes of bad health that have economic costs  to society) and 3) raise taxes for top earners to help those in the middle and the bottom.

  • Dalio's complete text, lengthy with a lot of data and charts, is here.


  • Dalio’s views, which he has shared in the past, are thoughtful and on-target – and he is investing in several solutions..

  • Strong leadership AND engaged citizens will be required to drive economic and political change.

  • The forces of technologyglobalization and the gig economy will continue challenge policy makers and reshape the global economy.

  • Note: As various pundits debate the dynamics of democracycapitalism and socialism – these terms do not appear in the Declaration of Independence or the U.S .Constitution.

Paul Dravis