Below is a summary of the most important findings from my Great Powers Index: 2024 report, which was just released today. The Great Powers Index shows how each of the 24 leading countries are doing in most dimensions and their prospects for the next ten years.
If you want to see the whole report, you can sign up to read it here.
The Great Powers Index is very thorough report on each of the leading 24 countries, showing readings for several different categories of well-being with many measures of each category. It also uses these measures to provide a prognosis for the next ten years' growth rates.
The report and the indices were originally created to help Bridgewater's investing by having good 10-year future growth estimates for these countries. Then a number of countries' senior policymakers started using the indices as KPIs for helping them shape policies, so I modified the report to help them do that. I decided to use it to update the data series that were shown in my book Principles for Dealing with the Changing World Order so that people could watch the world order unfold.
As always, I welcome your feedback on this summary excerpt and on the full report.
The Most Important Facts and Charts
There is an enormous amount of information in this study that allows you to go from granular pictures within each country up to an aggregate picture of each country and the relationships between countries. My aspiration is to put the whole dynamic thing online to allow the open-source exploration and contributions to what's here, but for various reasons I won't digress into I can't do that now. That leaves me with the challenge of trying to show you the highlights. To do that well, I will summarize the biggest forces and most important pictures as I see them.
To reiterate, my study of history has shown me that there are five big, interrelated influences that are driving the changing world order and that they tend to evolve in big cycles. In order of most concerning over the near- term, they are:
- how well theinternal order (system) works within countries, especially the United States, to influence how well people within them work together,
- how well theworld order (system) works to influence how well countries work with one another,
- how well thedebt/money/economic system works,
- the force ofnature, and
- how well humankind invents and decides to use new and better approaches and technologies.
How these five forces work and interact with each other shapes what happens. In this study, I look at these forces through hundreds of individual indicators to build up a picture for the world and across each major country.Before getting into the detailed assessment of each country, I will lay out how I'm seeing the big forces and how they've shifted in recent years.
1.I put the level of internal disorder first because it appears to be the biggest immediate risk. A few countries, most importantly the US, are experiencing classic big internal conflicts over wealth, values, and power and those conflicts are increasing. The chart below shows the U.S. Internal Order gauge which shows the highest level of internal conflict since the beginning of our data series in 1900. It appears that this will be the greatest near-term risk which will come to a head over the next year with and after the election. For that reason, in a year from now we will know a lot more about how disruptive this risk will be.
2. The international great power conflict risk appears to be the second greatest risk so I put it second. My measures show that the United States and China continue to be the two most powerful countries with high levels of conflict between them. As shown in the chart to the left, the United States is measured as a bit stronger with China rising fast, and the chart on the right shows that the conflict between them is the highest on record.
There are notable differences in the ways they are strong:
a. The United States has much bigger and more developed capital markets than any other country, the leading reserve currency, the strongest military, and the highest aggregate education rating because of excellent universities. It is also the most innovative country and has the largest economy in the world. It also has large wealth gaps, high domestic conflict risks (shown below), high external conflict risks, and an unfavorable economic/financial position (high debts and low expected growth).
b. China has relatively high projected growth (we project 4.0% over the next ten years compared to the US's 1.4%), it has the second largest economy which is nearly as strong as the U.S. economy, a nearly comparable military in Asia though it is much weaker globally, the highest rating on infrastructure, is the largest exporter and trading partner of more countries than any other country and is excellent on innovation and education. China's main weaknesses are its relatively high risk of external conflict and high debt levels (netting high corporate and local government debts against low household debts and a favorable international investment position).
The U.S.-China conflict is only a part of the growing world conflict that are reflected in the sides lining up in allied and axis powers. The next chart shows our global conflict gauge. It includes all countries and goes back to 1825. As shown, it is at moderately high levels vs history, comparable to the highest levels except World Wars 1 and 2. It reflects both a high death toll and flow of refugees from ongoing conflicts in Ukraine and Gaza, and increased military spending.
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