Economics 101: Hedge Fund Investor Ray Dalio Explains How the Economy Works in a 30-Minute Animated Video

Want to know how the economy works? It “works like a simple machine," according to Ray Dalio, who explains its mechanisms in the 30-minute video above. The presentation is “simple but not simplistic,” says the site Economic Principles, a research arm of Dalio’s company Bridgewater Associates. The lesson packs in most of the major boldfaced concepts in the average overpriced college economics textbook, “such as credit, interest, rates, leveraging, and deleveraging.” And it does so in that most engaging means of learning things online, an animated video, narrated by an expert.

All that’s well and good, but can we really understand such a volatile beast as “the economy”—an abstraction that sometimes seems like a cruelly rigged game and sometimes like a not-particularly-benevolent (to most people) deity—in only half an hour? Should we trust Dalio to summarize its complexity? The billionaire hedge-fund manager did, he tells us, manage “to anticipate and to sidestep the global financial crisis.” And he has made quite an impression on people like Forbes Senior Contributor Carmine Gallo with his “7,500-word LinkedIn article titled 'Why and How Capitalism Needs to be Reformed.'”

In that piece, the “voracious learner who studies narrative and communication… turns an enormously complex subject into a simple, compelling narrative.” He also makes it clear right in the title that by “the economy” he means a capitalist economy. It’s a point largely taken for granted in the animated explainer but an important one nonetheless given the underlying assumptions of the theory. Serious critiques of capitalism seem much harder to condense because they’re tasked with unpacking all those assumptions.

Marx’s Das Kapital spans three volumes, though he only lived to publish the first one, itself a monster of a read. Thomas Piketty’s Capital in the 21st Century is maybe a little breezier, at 696 pages (though if you let The Economist read it for you, they can sum it up in four paragraphs). By contrast, Dalio offers a comprehensive primer in brief for those of us who skipped that macroeconomics course, or who never got the chance to sign up for one. But elsewhere he has matched capitalism's biggest critics with his own best-selling book Principles: Life and Work, a huge and highly-praised look at economic crises of debt, gross inequality, stagnant wages, etc. See him describe the book, in five minutes, on 60 Minutes, just above.

Capitalism's best-known critics, even those who want to see the current system swapped out for a more equitable, sustainable model, have known they must begin by learning how the current system works, or how it doesn’t. Dalio himself isn’t setting out to build a worker’s paradise or to make financiers like himself obsolete, but he does have some trenchant thoughts on capitalism’s failures—and they are many, in his estimation. Still, he believes he knows how it can be reformed “to produce better outcomes.” Learn more in his compellingly-written essay here.

Related Content:

Free Online Economics Courses

David Harvey’s Course on Marx’s Capital: Volumes 1 & 2 Now Available Free Online

Piketty’s Capital in a Nutshell

Free Online Economics Courses 

Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness


by | Permalink | Comments (0) |

Support Open Culture

We're hoping to rely on our loyal readers rather than erratic ads. To support Open Culture's continued operation, please consider making a donation. We thank you!

Leave a Reply

Quantcast