24 Oct 2010 | Amy Chua - World on Fire

Before starting on Chua's treatise, I was rather skeptical of the book which has the subtitle "How exporting free market democracy breeds ethnic hatred and global instability". Published shortly after 9/11, I was assuming the book was riding the wave of America's need to have the attacks explained. Not so much, though I'm sure the book benefited from the related interested upon its release, devoting the last part of the book to the causes of the event in question.
Chua focuses on market-dominant minorities, though it seems the more common term now is simply dominant minorities, which in most non-western economies dominate the economy. In south east Asia, it's the Chinese, in much of south America and southern Africa, it's whites, in west Africa it's the Lebanese, but it's also the Ibo and other regional tribes in regions of Africa which are not historically their own and, to some extent but more importantly, perceived, the jews in Russia.

The issue with market-dominant minorities is that the west's focus on introducing laissez-faire capitalism together with universal suffrage as the cure for the woes of the developing world, in these locales, actually breeds conflict, as a rich, economy controlling, minority is pitted against a poor majority which ends up controlling politics while having little social mobility nor the ability or the resources to lift the bulk of the population out of poverty.
Interestingly, though anti-globalists typically understand that the capitalist modus operandi fosters, to some extent, the poverty gap which is present in many developing countries, they don't see, or perhaps want to see, that making these countries more democratic, would actually be counter productive as it won't give the poor access to the economic power of the select few, who are not just the well-off, but also often a distinct ethnic group.

Chua, who herself comes from a well-off Chinese family with extensive business interests in the Philippines, points out that, in the west, laissez-faire, or cut-throat, capitalism was never introduced hand in hand with universal suffrage, giving developing countries different problems to deal with than the west itself ever had to face. Also, she shows that economies lead by market-dominant minorities are at risk to go down one of three roads:

+ A backlash against markets, by the politically empowered poor, against the market-dominant minority's wealth. An example for this is Zimbabwe.

+ A backlash against democracy, by the market-dominant minority. Examples of this are economies which are characterized as 'crony capitalism', like Ferdinand Marcos' Chinese-protective dictatorship and Siaka Stevens' Sierra Leone.

+ Physical violence directed at the market-dominant minority. An example of this is the Rwanda genocide, where the market-dominant minority was only of a perceived ethnicity, as the barrier between Hutus and Tutsis was very permeable.

Besides economies with market-dominant minorities being powder kegs of revolt, inciting frustration and hatred in the poor, the US has been the market-dominant minority of the world, enforcing their rules on the poor people of the world, either directly or through institutions such as the World Bank or the IMF, which are heavily influenced by the US.
In this context, Thabo Mbeki, in a 2002 speech, talked of global apartheid.

After the book's introduction, most of the rest of it is just a long list of examples supporting Chua's claims, which does get a bit tiring as the central thesis is quite obvious, putting developing countries in a different and more sensible context that 'just makes sense'.

Unfortunately, her list of suggested remedies is rather vague, effectively coming down to her suggesting that the market dominant minorities should take up active roles in alleviating poverties in their respective locales.

Chua points out that, currently, in the west, there are no examples of market dominant minorities but that, in the past, there were, referring to the US south in the first half of the last century and the, in part perceived, market dominant Jews of pre-world war 2 Germany. On top of this, the west deploying mechanisms for wealth distribution to alleviate the effects of capitalism while slowly introducing universal suffrage allowed for the west to construct the welfare states they are.
However, the fact that currently no market dominant minorities exist in the west doesn't mean that no resentment can build up against the market dominant classes. With currently, all western countries slowly dismantling what is the welfare state, dissatisfaction with the market and its effects is growing, which will not unlikely result in both a political backlash and violent protests. Most recently, obvious examples of these are Greece, Iceland and France.

Unfortunately, in the long run, there doesn't seem to be a way to put the capitalist genie back in the bottle without a global catastrophe or global rescinding of capitalist values. If one or a group of countries will try to structurally mitigate the effects of capitalism, the money will just flow to countries with more relaxed laws and, combined with that, more repression of its population, making it practically impossible for any individual country to push the redistribution of wealth, necessary to keep the market dominant classes from becoming excessively powerful over the politically dominant majority.

Tagged with: 9/11 Africa apartheid Asia capitalism democracy France Germany Greece Iceland minorities Philippines Sierra Leone South Africa Zimbabwe

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