The World Order is Collapsing: What Does This Signify for the Future?
For the past two to three years, the term “World Order” has been on everyone’s lips, often accompanied by a sense of impending collapse. The familiar global landscape, many believe, is undergoing a fundamental shift, one that will irrevocably alter the way things operate.
Has the Old Order Already Fallen?
According to Ray Dalio, renowned investor and founder of Bridgewater Associates, the answer is a definitive yes. At the Munich Security Conference, a majority of leaders reportedly declared the post-1945 world order to be over. This assessment is detailed in the Security Report 2026, titled “Under Destruction.”
German Chancellor Friedrich Matz echoed this sentiment, stating that the decades-old world order is no more, and we are now entering an era of “great power politics.” He cautioned that freedom is “no longer a given” in this new landscape. French President Emmanuel Macron shares this view, asserting that the old European security structure tied to the previous world order is gone, and Europe must prepare for war. U.S. Secretary of State Marco Rubio added that we are in a “new geopolitical era” as the “old world” has passed.
The Six Stages of Order and Disorder
The current situation, as described by Dalio, aligns with Stage 6 of a larger cycle – a period where international rules lose their authority, and power dynamics revert to a “might makes right” scenario. This isn’t simply a political observation; it’s a shift in how nations will interact.
International relations in this era will be defined by a willingness to leverage power, rather than relying on established legal processes, to pressure rivals. This will manifest in five interconnected forms of conflict:
- Economic and trade warfare to weaken adversaries.
- Technological warfare to hinder access to critical innovations.
- Geopolitical struggles for alliances and territory.
- Financial warfare, utilizing sanctions to restrict access to global capital.
- Military conflict or armed clashes.
These forms of conflict often escalate over years, potentially culminating in direct military engagement.
Historical Parallels: The Lead-Up to World War II
The current situation bears striking similarities to the period preceding World War II. The Great Depression of 1929 fueled internal conflicts over wealth, leading to the rise of populist, authoritarian, and nationalist leaders in Germany, Japan, Italy, and Spain. Economic hardship fostered ideologies like fascism and communism.
In Germany, Hitler rose to power in 1933 amidst 25% unemployment. He implemented a centrally controlled economy, rapidly rebuilt industry, and eliminated unemployment by 1938, simultaneously building up the military to seize resources. Japan, facing resource scarcity and economic crisis, invaded Manchuria in 1931 and China in 1937 to secure vital materials like oil, iron, and rubber.
The imposition of trade barriers and military build-ups, driven by a focus on national self-preservation, mirror the concerns of today. Internally, nations may shift towards economic authoritarianism, with governments controlling resources in preparation for conflict, increasing debt, and devaluing currency.
The Return of Gold as a Safe Haven
In such an environment, traditional safe-haven assets may lose their appeal, while gold re-emerges as a reliable medium of exchange when faith in credit systems erodes.
The Key to Survival: Endurance and Productivity
Dalio emphasizes that victory in future conflicts won’t be determined by destructive power, but by the ability to “endure pain” – to withstand economic hardship and maintain resilience. However, he cautions that war is a costly mistake. The most effective path to survival lies in fostering win-win relationships and maintaining strong domestic productivity.
The Rise and Fall of Great Powers
Dalio concludes that all great powers eventually decline. However, this decline doesn’t inevitably lead to catastrophe if nations maintain productivity, spend less than they earn, create systems that benefit the majority of their population, and cultivate mutually beneficial relationships with key competitors.
The United States, with its 245-year history, has proven remarkably resilient. However, past success doesn’t guarantee future stability if fundamental principles are ignored.
Frequently Asked Questions
Q: What exactly is the “World Order”?
A: It refers to the patterns of rules and processes by which global actors manage their relationships and common affairs, shaped by the balance of power and prevailing ideas.
Q: Is war inevitable?
A: While the risk of conflict is increasing, it is not necessarily inevitable. Strategic diplomacy and a focus on win-win solutions can mitigate the risk.
Q: What role does China play in this shift?
A: The source material indicates China is poised to turn into the world’s largest economy, with China and emerging markets accounting for half of global economic size.
Q: What can individuals do to prepare for these changes?
A: Focus on building financial resilience, diversifying investments, and staying informed about global developments.
Did you know? The concept of a cyclical nature to world order has been explored by scholars for decades, with figures like Bull, Wendt, and Kissinger contributing to the understanding of these patterns.
Pro Tip: Diversifying your investment portfolio and focusing on long-term financial stability are crucial steps in navigating a period of global uncertainty.
What are your thoughts on the changing world order? Share your perspective in the comments below. Explore our other articles on global economics and geopolitical trends to stay informed.
