The world is moving closer to a single world order and system of governance faster than ever before, the results began to study the orders that have taken place, the existing and to explore those to come
I watched billionaire investor Ray Dalio’s video of findings and research titled: Principles For Dealing with the Changing World Order, and found it essential to put my thinking and learnings in writing.
What is The Order: Ray Dalio introduced it as a system of governance for people who deal with each other.
There are internal orders which are defined in a country’s constitution and operate within the territorial jurisdiction of a particular country
External or global orders, these are orders of governance between countries that are anchored in treaties and agreements and explain how global governance works, the internal order often changes in relation to global orders
For internal orders, it usually dominates for a given period of time and therefore declines after a major civil war in such a country, for external orders, they take place when revolutions and wars between countries occur at historical intervals.
In the United States, an internal order was defined in the Constitution of 1789 after the American Revolution which is still in effect to this day.
Russia established a new internal order in 1917 by the Russian Revolution which lasted until its decline in 1991 by a bloodless revolution breaking the states of the Soviet Union
China established its current internal order in 1949 when the Chinese Communist Party won the Chinese Civil War under the leadership of Mao Zedong, in the case of Nigeria, a new internal order was established as usual after the 1967 civil war -1970, the one that is considered one of the bloodiest civil wars in the history of the world, marginalization in this order has become a dominant feature of the political administration of the country
Ray Dalio has taken the study of world orders over the past 500 years, studying the great empires and currency reserves that have assumed world orders, the great empires that have held world orders are
Dutch Empire, Ottoman Empire, Japanese Empire, Spanish Empire, British Empire and American Empire and its dollar
To understand each empire and their power, 8 metrics (strengths) are used as determinants which they include, education, technological development, global market competitiveness, economic output, global trade, military strength, financial capital and currency (as reserved currency)
Metrics determine the power of a country and determine its rise and fall, each world order begins after a major conflict between two or more powerful nations
The current world order was formed after the second world war in 1945, the order is also known as the American order, this order was formed after the Allied victory in the Second World War and the United States is become a dominant world power.
As a result, the new world monetary system was defined in the Brettonwood Agreement of 1944 which gave birth to the International Monetary Fund (IMF) establishing the US dollar and its gold as the main world reserve currency.
Reserve currency is a currency accepted worldwide and by accepting a country’s currency as a global reserve currency it is a factor for that country to basically rise to become the richest and most wealthy empire powerful, with the establishment of a new monetary system making America the dominant empire and the dollar as the reserve currency, a new world order began
By studying the sequence of each country, we can see how the circles of order transpire, the world order is divided into 3 faces, the RISE, the TOP and the DECLINE
Every order that arises both internally and externally is usually initiated by powerful revolutionary leaders through 4 major stages, they gain power by mustering the support of the people, they consolidate power by weakening or eliminating the opposition, they establish systems and institutions to make the country work well and finally they choose successors carefully. As a country becomes the largest international trading empire, transactions will be paid for with its own currency, making it the preferred global medium of exchange, and with people saving in it, it will become the preferred shareholder of wealth and will thus become the world’s reserve currency, RUSSIA knew this and therefore banned the US dollar since the outbreak of the Russian-Ukrainian war and only accepts the Russian ruble as a medium of exchange in the national and international transactions.
During the Dutch world order the currency was the guilder, the pound during the British order the dollar has been since the American order, the country with the reserved currency has the advantage of borrowing more than any other country and then make bigger profits, becoming richer and richer
With the current global competitiveness between the United States and China, the Chinese yen is expected to become the next global reserve currency and make the new world order a Chinese one.
Department of Political Science,
Adekunle Ajasin University.