Principles: Life and Work
by Ray Dalio
Simon & Schuster, 2017, 592 pages
On the first page of his best-selling memoir, Ray Dalio unburdens himself of the opinion that he is “a dumb shit.” Nothing in the ensuing six hundred or so pages convinced me that I should dissent from this verdict.
I can say honestly, in keeping with the book’s own serial inducements to “radical transparency,” that my endorsement of Dalio’s conclusion about his own intelligence was arrived at without prejudice. Cognitive bias had no role, only the preponderance of textual and pictorial evidence. Before I was asked to review Principles, I had never heard of its author or of Bridgewater, the investment firm that Dalio founded in his apartment four decades ago. As far as I knew, the present volume would turn out to be a monograph on virtue ethics or a history of post-Trotsky dissent within the Eastern bloc for general readers.
It’s still not entirely clear to me what Principles is. Part of the reason for this, no doubt, is that its author is not entirely sure what principles are. I underlined the word more than 150 times in my copy. An exhaustive search of dictionaries turned up no definition that would meet even a handful of the wide-ranging denotations that Dalio seemed to be imparting to this noun, much less satisfy them all. A principle, for Dalio, is not what the New Oxford American Dictionary defines as “a fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.” Nor, rather emphatically, is it “a natural law forming the basis for the construction or working of a machine” or “a general scientific theorem or law that has numerous special applications across a wide field.” Least of all are principles “morally correct behavior and attitudes.” But let’s allow the man to speak for himself:
The most important thing I learned is an approach to life based on principles that helps me find out what’s true and what to do about it. I’m passing along these principles because I am now at the stage in my life in which I want to help others be successful rather than to be more successful myself. Because these principles have helped me and others so much, I want to share them with you. It’s up to you to decide how valuable they really are and what, if anything, you want to do with them.
This is worth unpacking, I think, because with its wayward invocation of the p-word and cart-and-horse confusion about metaphysics and epistemology—to say nothing of its too-insistent altruism—it sets the tone for the rest of the book. It seems like a very straightforward and banal example of U.S. standard business English, but in its way it is remarkably subtle. How many of Dalio’s readers, I wonder, will notice—assuming subject-verb agreement is a reliable guide here—that it is the “approach” upon which they are based rather than the principles themselves that “helps” Dalio to find out what is true and what to do about it? Already we are being told, albeit obliquely, that the substance of one’s principles is less important than gobbling them up with the right sort of affect.
And I do really mean gobbling. “Having a good set of principles is like having a good collection of recipes for success,” he tells us. Thank goodness we have Chef Dalio willing to invite us into his kitchen. After all, he observes, “it’s very rare for people to write their principles down and share them. That is a shame. I would love to know what principles guided Albert Einstein, Steve Jobs, Winston Churchill, Leonardo da Vinci.”
It seems to have escaped Dalio’s notice and that of his editors—assuming he had any—that Leonardo left us thousands of pages of journals, some of them in museums, some privately owned by Dalio’s friend Bill Gates, all ably edited and available in fine bookstores everywhere. Churchill probably went further in the pursuit of documenting “what guided” him than any statesman in history; even at the height of the war his fellow cabinet officials complained that the essential man spent too much time turning workaday missives into the self-aggrandizing pastiches of Macaulay that he would later quote in his own books. Einstein wrote a great deal about his own life and views. Elsewhere Dalio says something similar about Vince Lombardi, apparently unaware not only of the coach’s best-selling memoir but of his role in the motivational training film Second Effort, one of the first things of its kind ever produced.
You could very plausibly argue that drawing attention to the not exactly elusive existence of Churchill’s autobiographical writing (for which he won the Nobel Prize in Literature), to say nothing of his vast extant correspondence and various multivolume histories, and Leonardo’s Notebooks, and Einstein’s Ideas and Opinions, is pedantic. It is certainly unnecessary, if only because Dalio is not, in fact, convinced that his readers need any principles except their own—not even his. “My hope is that reading this book will prompt you and others to discover your own principles from wherever you think is best and ideally write them down. . . . The principles you choose can be anything you want them to be as long as they are authentic—i.e., as long as they reflect your true character and values.”
How exactly we are meant to go about acquiring these principles nearly gets lost amid the never-ending but apparently circular pleas for us to scribble them down and revise them. (“If inconsistencies seem to exist, you should explain them. It’s best to do that in writing because by doing so, you will refine your written principles.”) Here is the most lucid of his various attempts to explain the process:
There is nothing more important than understanding how reality works and how to deal with it. The state of mind you bring to this process makes all the difference. I have found it helpful to think of my life as if it were a game in which each problem I face is a puzzle I need to solve. By solving the puzzle, I get a gem in the form of a principle that helps me avoid the same sort of problem in the future. Collecting these gems continually improves my decision making, so I am able to ascend to higher and higher levels of play in which the game gets harder and the stakes become ever greater.
Could it be that he is a fan of Jewel Quest?
Having once acquired them, it is important to “be clear about your principles,” Dalio tells us, “and then you must ‘walk the talk.’” This and other accidental verbal felicities, such as the aforementioned squib about a “collection of recipes for success,” are the most delightful thing in the book. The spectacular transmogrification of the cliché “recipes for success” into something we might actually find in a little box at grandma’s house via the literal-sounding “collection of” is worthy of Bertie Wooster. “Walk the talk” gorgeously misses the whole point of this tired metaphor by eliding and then reversing the crucial distinction between the mere advertisement of some conviction or other and meaningful action grounded in the former. To “walk the talk,” to my mind, suggests not mere puffery at the expense of hard work due to laziness or neglect but the active attempt to subsume even the possibility of worthwhile activity into the art of feigning it. A man who talks the talk may or may not also walk the walk—but the man who knows how to walk the talk doesn’t need to do either particularly well. Does Dalio really want to give away the game like this, in the interest of life-enhancing beauty? The pioneer of “risk parity” and “portable alpha” strategies is no ordinary dumb shit. He’s P. G. Wodehouse with a regression analysis.
Probably you can imagine what it does for the reader’s expectations when he discovers less than a tenth of the way through a book called Principles that its author has no principles, not even ones governing the use of the word. Dalio nevertheless deserves credit for his obvious dedication to making himself understood despite the severe handicap imposed on him by his anti-talent for clarity and conceptual rigor. No reviewer could ever hope to do justice to the sheer tedious variety of his slogans in bold and italic type, red ink, capital letters (“TO BUILD AND EVOLVE YOUR MACHINE”) and exclamation points, his pull quotes, charts, graphs, tables, summaries, outlines, lists. More than once I had a lingering suspicion that I was holding in my hands the first book in the history of English letters composed in Microsoft PowerPoint.
The Ghost in the Machine
The least nebulous thing here is the autobiographical overture that follows the preface. Here we learn a great deal not only about Dalio’s career (my children have him to thank, it would appear, for that crown jewel of American cuisine, the Chicken McNugget) but about his personality, interests, his politics, and even, such as they are, his metaphysics. To take them in reverse order, it would appear that Dalio has read a great deal of the popular science literature about evolutionary biology without absorbing the determinism that is both the stated conclusion and the logical concomitant of writers like Richard Dawkins and Daniel Dennett. “It’s now clear to me that my purpose, your purpose, and the purpose of everything else is to evolve and to contribute to evolution in some small way.” He seems to be under the impression that evolution is not a biological theory about the development and diversification of organic matter so much as a kind of universe-encompassing treasury to which we all render our tithes. “I am sharing these principles to help you evolve too.” Apparently it isn’t mandatory.
Dalio says he has been dreaming since 1980 of a world in which “there was a computer that could hold all of the world’s facts.” If only, he muses, “it was perfectly programmed to mathematically express all of the relationships between all of the world’s parts, the future could be perfectly foretold.” I for one find it hard to imagine what it would mean for a computer to “hold” such facts as whether my younger daughter is sad or happy today and make predictions on the basis of them about such contingencies as whether she is going to bite her sister the next time we go to the park—but no matter. The point is that Dalio believes “the economic machine is more powerful than any political system in the long run” and that the only thing standing between us and his vision of utopia is the antiquated technology of statecraft. “Ineffective politicians will be replaced and incapable political systems will change.”
Dalio’s nonspeculative political views are difficult to pin down. At one point here he tells us that he has always found John F. Kennedy’s optimistic rhetoric about America’s role in the world inspiring while disliking Nixon for his criticism of Wall Street. More recently his sympathies have been with Lee Kuan Yew, whom he once had to dinner at his home in Connecticut, where the great man confided his belief that the greatest living politician was Vladimir Putin. If Dalio was appalled or even slightly surprised by this judgment he does not tell us about it.
After the memoir we arrive at what is supposed to be the crux of the book, i.e., the long-rumored principles, all of which are expressed in the form of bolded sentences followed by one or more paragraphs of allegedly explanatory gloss. There are several hundred of these. The honest critic can do no more than provide a representative sample of Dalian apothegms:
Success is a double-edged sword.
TRUST IN RADICAL TRUTH AND RADICAL TRANSPARENCY.
Realize that you are simultaneously everything and nothing—and decide what you want to be.
Meritocracy = Radical Truth + Radical Transparency + Believability – Weighted Decision Making.
As the saying goes: “Evolve or die.” [Is that a saying? A Google search suggests that Evolve or Die is simply the title of a book published in 2010. “As the saying goes: ‘Lolita.’”]
Abide by idea-meritocratic ways of getting past the remaining disagreements (such as believability-weighted decision making).
Pop the cork.
Beware of fiefdoms.
Watch out for “Frog in Boiling Water Syndrome.”
Dreams + Reality + Determination = A Successful Life.
It’s up to you to decide what you want to get out of life and what you want to give.
What is fascinating about Dalio is not so much the banality of his expression but the unconscious variety of his source material, the heedless domain-defying verve of a man who effortlessly grafts thirdhand Hobbes (“Everything that happens comes about because of cause-effect relationships that repeat”) onto Oprahisms about “Having the basics—a good bed to sleep in, good relationships, good food, and good sex.” He is the sort of hard materialist who takes the religion part of yoga seriously.
Finally, I would be remiss not to mention the pictures that are so apparently crucial to the explication of Dalio Thought. One looks like a stick-figure reproduction of the frontispiece to Leviathan with “GOALS > MACHINE > OUTCOMES” underneath the Dalio-Sovereign’s smiley-face countenance and “DESIGN < > PEOPLE” just below the arrow-hill. Another is a dead ringer for the stylized number 6 that once emblazoned Mark Martin’s Valvoline-sponsored Ford in the nascar Winston Cup Series of blessed memory, except that the numeral is composed of a series of arrows labeled with typically parallelism-challenged examples of businessese—“GOALS,” “DIAGNOSIS,” “DOING.” Several of the drawings appear to be nothing more than a series of cursive lower-case o’s sloping diagonally either upward or downward. This is how the richest people in the world communicate.
The PowerPoint and the Glory
At this point the reader is probably ready to accuse me of taking a book written by a self-confessed moron too seriously. Principles might barely qualify as a book by the standards of twenty or even five years ago, but it is also the bestselling nonfiction title of the last year not written by or about Donald J. Trump. We are long past the age when would-be finance magnates and budding captains of industry at our esteemed centers of higher learning were Mayflower descendants content to earn interest at 5 percent and leave the office at 5:00 to get plastered on their sailboats. Lord knows how many Harvard undergraduates are working their way through Principles right now, in between exercising and making plans for their summer internships at Goldman or McKinsey, to say nothing of the thousands of first- or second-generation finance majors at the Regionally Distinguished Alumnus School of Business at Directional State University. I would happily see our political and financial elite become slaves of any other ideology, from Wahhabism to Khmer nationalism, if it meant that they would stop reading airport nonfiction.
I do not wish to give the impression that Principles is the worst book I have ever read for professional reasons, or that narcissism, sophistry, and illiteracy are the only things in it. They’re just the only things that I can glean from its nearly six hundred pages, which—radical transparency again—no doubt tells you more about this reviewer and his own principles than about the book’s inherent value. That said, I think that a juxtaposition with an earlier bestseller about a man who had the vision to see his way through a global economic downturn would be apropos here, if only for contextual reasons:
When a man has reached his thirtieth year he has still a great deal to learn. That is obvious. But henceforward what he learns will principally be an amplification of his basic ideas; it will be fitted in with them organically so as to fill up the framework of the fundamental Weltanschauung which he already possesses. What he learns anew will not imply the abandonment of principles already held, but rather a deeper knowledge of those principles. . . . every such development is a new witness to the correctness of that whole body of opinion which has hitherto been held.
This is only one randomly chosen example from among the dozens of passages that might have been copied and pasted seamlessly into Principles, albeit after allowing for the firmer grasp of English syntax and idiom possessed by the translator of Mein Kampf. In fact, it’s probably a better explication of Dalio’s thesis, such as it is, than anything actually in his own book.
Don’t misunderstand me: I’m not saying that Ray Dalio is Hitler. Among other things, he lacks both the führer’s undeniable musical taste and his vegetarianism. I’m just saying that they are both famous for their principles and that if you’ve read one megalomaniacal Darwinist’s confused and confusing account of how he has risen beyond his humble origins and “found or achieved or done something beyond the normal range of achievement”—complete with anagogic epigrams and copious unlearned references to historical figures and the pseudoscience of the day—you’ve read them all. But maybe, like Dalio, I’m just a dumb shit.