7/1/2019 Have Power, Respect Power, and Use Power Wisely

Sign in Join now

Have Power, Respect Power, and Use

Power Wisely
Ray Dalio Follow
Co-Chief Investment Officer & C… 7,247 242 0

I believe that the following principle about power is important in helping us reflect on the
dynamics behind the conflicts that we are seeing today, including the geopolitical conflicts
between countries, the political conflicts within countries, the conflicts between and within
organizations, and the conflicts between people. I also believe that this principle is relevant to
the relationships that you have. 
Having power is good because power will win out over agreements, rules, and laws all the time.
That’s because, when push comes to shove, those who have the power to either enforce their
interpretation of the rules and laws or to overturn the rules and laws will get what they want.
The sequence of using power is as follows. When there are disagreements, the parties
disagreeing will first try to resolve them without going to rules/laws by trying to agree on what
to do by themselves. If that doesn’t work, they will try using the agreements/rules/laws that they
agreed to abide by. If that doesn’t work, those who want to get what they want more than they
respect the rules will resort to using their powers. When one party resorts to using its power and
the other side in the dispute isn’t sufficiently intimidated to knuckle under, there will be a war. A
war is the testing of relative powers. Wars can be all out or they can be confined; in either case
they will be whatever is required to determine who gets what. A war will typically establish one

https://www.linkedin.com/pulse/have-power-respect-use-wisely-ray-dalio/ 1/5
7/1/2019 Have Power, Respect Power, and Use Power Wisely

side’s supremacy so that it will be followed by a peace because nobody wants to fight the clearly
Sign in Join now
more powerful entity until that entity is no longer clearly the most powerful. At that time, this
dynamic will begin again. This dynamic is timeless and universal.
It is important to respect power because it’s not smart to fight a war that one is going to lose; it
is preferable to negotiate the best settlement possible (that is unless one wants to be a martyr,
which is usually for stupid ego reasons rather than for sensible strategic reasons). 
It is also important to use power wisely. Using power wisely doesn’t necessarily mean forcing
others to give you what you want—i.e., bullying them. It includes recognizing that generosity,
love, and trust are powerful forces for producing win-win relationships which are fabulously
more rewarding than lose-lose relationships. In other words, it is often the case that using one’s
“hard powers” is not the best path and that using these “soft powers” is preferable. For example,
though I always had and retained the ownership power to make decisions at Bridgewater
autocratically, I chose to not use those powers. Instead I created and operated an idea-
meritocratic system (that I described in Principles). I also chose to be far more generous with the
people I worked with than I had to be while maintaining extremely high standards because I
knew that operating that way would produce the amazing relationships and outcomes that we
experienced – far better than if I used my “hard powers” more forcefully. So, it’s important to
remember that great relationships gives one great powers, and that they are wonderful rewards
in and of themselves. There is nothing more powerful and rewarding for the individual and the
collective than a community of capable people who care for each other and will give each other
all they can. 
If one is in a lose-lose relationship, one has to get out of it one way or another, preferably
through separation though possibly though war. 
To handle one’s power wisely, it’s usually best not to show it because it will usually lead others to
feel threatened and build their counter-threatening powers which will lead to a mutually
threatening relationship. Power is usually best handled like a hidden knife that can be brought
out in the event of a fight. But there are some times when push comes to shove that showing
one’s power and threatening to use it is most effective in improving one’s negotiating position
and preventing a fight.
Of course it is valuable to know what matters to the other party most and least, especially what
they will and won’t fight for and how they will fight. That’s best discovered by looking at the
types of relationships they have had and the ways they used power in the past, by imagining
what they are going after, and by testing them through trial and error. 
Sometimes mutual testing leads to tit-for-tat escalations and eventually dangerous
brinksmanship. These tests can be dangerous because they put the other party in the difficult
position of having to choose between fighting and being caught bluffing. Escalating tit-for-tat
wars often takes conflicts beyond where either side would logically want them to go. 
Knowing where the balance of power lies – i.e., knowing who would gain and lose what in the
event of a fight - should always be kept in mind because it is essentially the equilibrium level
Ray Dalio Follow
that parties keepInvestment
Co-Chief in the back of their
Officer & C… minds when considering what a “fair” resolution of a
dispute is – like thinking about what results a court fight would lead to when considering what
the terms of a negotiated agreement should be.
Though it is generally desirable to have power, it is also desirable to not have the powers that
one doesn’t need. That is because maintaining power consumes resources, most importantly
your time and your money. With having power comes having the burden of responsibility. While
https://www.linkedin.com/pulse/have-power-respect-use-wisely-ray-dalio/ 2/5
7/1/2019 Have Power, Respect Power, and Use Power Wisely

most people think that having lots of power is best, I have often been struck by how happy less
Sign in Join now
powerful people can be relative to more powerful people.  
When thinking about how to use power wisely, it’s important to also think about when to reach
an agreement or when to fight. To do that, it is important to imagine how one’s power will
change over time. It is desirable to use one’s power to negotiate an agreement, enforce an
agreement, or fight a war when one’s power is greatest. That means that it pays to fight early if
one’s relative power is declining and fight later if it’s rising.  
Of course there are also times that wars are logical and necessary to keep or get what one
needs. In such cases, having enough power to win the fight while preparing for the painful
consequences that will follow is most appropriate.
Besides being the best advice I can give for you for whatever difficult relationships you might
have, this principle helps me to figure out what others in conflicts are likely to do. 

242 comments

Sign in to leave your comment

Peter Thorsteinson 2h
Software Dev Instructor/Author

A large amount of aggregate political power can be spread over a decentralized mass
population who share common interests and goals, but if that power is not
coordinated, it is feckless, and it cannot win against a much smaller power that is
concentrated within a self-interested centralized elite ruling class. In some cases, a
rallying cry calling to arms can suddenly coordinate the masses, enabling it to topple
the elite ruling class, but this virtually always backfires, and a new ruling thug class
emerges out of the chaos that ensues. I tend to be pretty cynical about the prospects of
such revolutions, but the amazing thing about blockchain protocols is that this
coordination and trust seems to be within reach, and without the death and destruction
of traditional revolution… at least in the digital world. I wonder if there is a way to
extend it to government at large? BTW, AI and Robotics will eventually delete all
political power of humans, so it may not matter :(
Like Reply

Angelica Figueiredo White 3h

AngelicaI create social-environmentally conscious innovation.
Figueiredo
White "There is nothing more powerful and rewarding for the individual and the collective
than a community of capable people who care for each other and will give each other
all they can." 

https://www.linkedin.com/pulse/have-power-respect-use-wisely-ray-dalio/ 3/5
7/1/2019 Have Power, Respect Power, and Use Power Wisely

Like Reply
Sign in Join now

Daniel J Knight 5h
Daniel Founder & Head, Five Star Decisions Institute
J
Knight A good guide on how to develop and use power wisely
Like Reply

peter james 6h
peter Marine Engineer
james
P over C = C why is it so
Like Reply

Ed Ed Dailey 8h
Dailey Executive seeking Leadership team to share victories with

I believe we have tried enough conflict, maybe we should use the true benefit of power
through peaceful objectives. Think of all the issues, war on drugs, war on foreign soil,
building walls....lets help each other.
Like Reply

Alireza Pirayesh 14h

Alireza Investment Strategist
Pirayesh
Dear Mr. Dalio, I think you should address TRUMP and KHAMENEI Directly!!!... Thanks
for your wise insight.
Like Reply 1 Like

Show more comments.

More from Ray Dalio

What I Have For You Beyond the China-U.S. Trade War Life Principle 1
people are those
What I Have For You Beyond the China-U.S.
above themselve
June 17, 2019 Trade War
objectively and m
May 29, 2019
things to shape c

Life Principle
Successful pe
May 28, 2019

https://www.linkedin.com/pulse/have-power-respect-use-wisely-ray-dalio/ 4/5
7/1/2019 Have Power, Respect Power, and Use Power Wisely

Sign in Join now

© 2019 Copyright Policy

About Brand Policy

User Agreement Manage Subscription

Privacy Policy Community Guidelines

Cookie Policy Language

https://www.linkedin.com/pulse/have-power-respect-use-wisely-ray-dalio/ 5/5