Customer Reviews

World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability

5 star:		(44)
4 star:		(27)
3 star:		(13)
2 star:		(11)
1 star:		(10)

 

 

This book is amazingly clear and well-written (in fact its main weakness is that it is TOO clear, to the point of being mildly repetitive), which is why is amazes me that so many of the reviews here seem to either miss the point or misunderstand it altogether.

Chua DOES NOT blame free markets and democracy for all the evils of the world.

She DOES NOT attempt to propose some 'magic bullet' solution - she is simply providing analysis in attempt to further the discussion.

She DOES NOT claim that wealth redistribution programs are the ONLY reason for the relative success of the Western democracies - ethnic homogeneity is also a major factor, as are situational idiosyncrasies.

If you attempt to view this book as a narrow-minded attempt to shove the complex tangled peg of the world into a smooth round hole, you will have misunderstood it. Obviously, any book with an explanatory scope of this magnitude needs to be taken with a grain of salt. Her principle thesis is extremely powerful, but it does not explain everything since the big bang! In all the low-star reviews I have read, the criticisms have been completely misguided - do not base your opinion of this book on those reviews.

What Chua is trying to show is that - for better or worse - the policies we push onto the developing world far too often result in unintended consequences. We are pushing an extreme ideology onto the world - an ideology we don't practice ourselves and in fact NEVER HAVE IN OUR HISTORY.

Capitalism is about increasing returns - wealth begets more wealth. A small group of wealthy can raise the level for all people, which is generally hunkey-dorey.

This book builds on the concepts of path-dependence, lock-in, increasing returns in socioeconomic networks - all ideas that have been around for years now (see Brian Arthur and the Sante Fe people) but very few, especially in mainstream 'neoclassical' economics, seem to admit these things are real.

I am actually impressed with how even-handed and balanced this book is, with respect to liberal/conservative ideology. She comes off as slightly conservative(in other words, in favor of market 'liberalization') and definitely pro-market. She is NOT some leftist red commie. And the fact that Thomas Sowell - the high priest of conservate economics himself - gave this book an excellent review should be a tip-off to people on the right, who would dismiss this as some leftist rant.

This is an excellent, provocative book, and should be read and understood by many more people than it probably will be, which is unfortunate...

Amy Chua has written an important book on how the accumulation of wealth by what she calls "market-dominant minorities" threatens globalization. By looking at a series of case studies, some of which she has personal experience with, Chua shows that the tendency of some minorities to benefit disproportionately, when their countries' markets open up to the world, inflames ethnic hatred among the ethnicities who make up the bulk of those countries' populations.

Ethnicity is used as a sociological concept in this book, not a genetic or national concept. Thus, the overseas Chinese in Southeast Asia, Lebanese in West Africa, Jews in Russia, whites in Latin America and Africa, and various African tribes in Africa are all considered as case studies of market-dominant minorities, despite their various differences.

Some ethnicities are thoroughly assimilated by their host countries; some are not. Some are citizens of their host country; some are not. Some rely on key cultural differences to take advantage of globalization while others simply had an advantageous history that allowed them to fill key niches in expanding markets.

But however you define ethnicity, and whatever allows these fortunate minorities to take advantage of spreading markets, the key point is that certain minorities, separate from and identifiable to the bulk of the population, have a hugely disproportionate influence in these expanding national economies. And the bulk of the population sees what is going on and is not happy about it.

Chua is comprehensive (perhaps too comprehensive -- more on that later) but doesn't get bogged down in details; as a result, this is an easy book to read. She looks at numerous aspects of ethnicity and globalization, from the economic and political implications, and even examines the question of assimilation and mixed blood with the fascinating case of Thailand's Chinese population.

But "World on Fire" begins to lose some of its force as Chua takes on too many cases. Near the end, she looks at the former Yugoslavia and the Middle East. While she clearly qualifies her remarks here by saying that the problems in these areas do not stem from globalization alone, she nevertheless is too eager to show some connection between them. She would have been better served, I think, to understand the limits of her theory and to apply it only where it clearly had some explanatory power.

Francis Fukuyama famously announced at the end of the Cold War that humanity had reached "the end of history." Unfortunately, he forgot to tell history not to bother coming to work anymore.

Easy as it is to make fun of Fukuyama, where exactly did he go wrong?

Fukuyama's conception was formed by his expensive miseducation in the works of Hegel and other 19th Century German philosophers. History consists of the struggle to determine the proper ideology. Now there are no plausible alternatives to capitalist democracy. History, therefore, must be finished.

Lenin held a more realistic theory of what history is about: not ideology, but "Who? Whom?" (You can insert your own transitive verb between the two words.) History continues because the struggle to determine who will be the who rather than the whom will never end.

Amy Chua's readable and eye-opening new book "World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability" documents just how pervasive ethnic inequality is around the world-and how much that drives the traumas we read about every day.

Chua builds upon Thomas Sowell's concept of the "middle-man minority"-the often-persecuted immigrant ethnic group with a talent for retailing and banking, such as Jews, Armenians, Chinese, Gujarati Indians, Lebanese Christians, etc. She broadens that idea to include other relatively well-off groups, such as un-entrepreneurial hereditary landowners, like the Tutsis of Rwanda and the Iberian-descended whites of much of Latin America. She lumps them all together under the useful term "market-dominant minorities."

Chua begs off explaining why economic inequality exists between hereditary groups. So let me offer a general explanation.

Creating wealth is difficult. People who have wealth tend to pass down their property, their genes, and their techniques for preserving and multiplying wealth to their descendents, rather than to strangers.

In countries without a reliable system of equal justice under the law, clannishness is particularly rational. Businessmen must depend upon their extended families for protection and enforcement of contracts. So they are particularly loath to do serious business with people to whom they have no ties of blood or marriage and who would thus be more likely to stiff them on a deal.

"Globalization," or economic liberalization, tends to make the poor majorities slightly richer and the "market dominant minorities" vastly richer. Sometimes the masses find this an acceptable tradeoff. But sometimes it drives them into a fury.

Often, the minority's post-globalization riches are honestly earned, but not always. American-backed privatization schemes in Russia and Mexico put huge government enterprises into the hands of the most economically nimble and politically well-connected operators at give-away prices.

Chua, a professor at Yale Law School, is herself the progeny of a market dominant minority: the Chinese of the Philippines. Chinese-speakers make up only 1% or 2% of the Philippines' population. But they own the majority of the country's business assets. They seclude themselves in a luxurious world fenced off from the indigenous majority, whom they hold in contempt and wouldn't dream of marrying.

Not surprisingly, the impoverished natives aren't crazy about the rich newcomers. Chua's beloved aunt in Manila was brutally murdered by her chauffeur. The unmotivated cops made little effort to find him.

It's definitely nicer to belong to the minority than to the majority in these countries. But Chua makes clear that, to Americans used to our norms of congeniality and social equality, it would be an awfully depressing way to live.

A grimmer example: Indonesia. The Chinese made up 3% of its vast population, yet owned the great majority of all businesses. The dictator Suharto, whose family had lucrative ties to the Chinese community, fell in 1998. Democratization set off a vicious pogrom against the Chinese, many of whom fled to Chinese-majority Singapore. The government expropriated $58 billion in assets.

Not surprisingly, the native Indonesians proved inept at running the businesses nationalized from the Chinese, and the economy collapsed.

All of which leads to a disquieting conclusion: it can be contradictory for America to demand that other countries simultaneously free their economies and democratize their politics.

We are seeing this in Venezuela right now. The dark-skinned, democratically-elected Hugo Chavez is at war with the fair-skinned rich, who want the national oil company privatized. The Bush Administration ludicrously endorsed the white elite's coup against Chavez last spring as a "victory for democracy," only to be embarrassed when the majority rose up and reinstalled him.

That property rights and one man-one vote democracy don't always mix well would not have surprised Aristotle, Edmund Burke, or Alexander Hamilton. Yet many Americans who call themselves conservatives have forgotten this.

One reason: we are one of the fairly small number of lucky countries with "market dominant majorities." We can have our cake (capitalism) and eat it too (democracy) because our majority group is economically quite competent.

This raises obvious questions about the long term impact of our immigration policy, which, with all the brilliant people in the world to choose among, manages to bring in huge numbers of people who have never seen the inside of a high school.

After reading some of the Customer Reviews, I believe that some of the reviewers may have missed the point of the book. Ms. Chua does not advocate Marxism, is not anti-capitalist, is not anti-globalist and is not anti-democracy. Rather, her simple premise is that the wholesale simultaneous installation of democracy and free markets to developing countries leads to ethnic hatred and often tragic results. She convincingly illustrates this point through the various examples of countries in the book. Furthermore, she claims that her thesis is not the only cause for instability within countries. Other factors also significantly affect the stability of a country (or region).

Her "market-dominant minority" is one of the major sources of a country's potential instability. This group is a minority that controls the vast majority of wealth in a nation. For example, 3 percent of the Filipino population is Chinese yet this 3% controls over 70% of the Filipino wealth. The enormous increase in wealth results from entering free markets and then the gross disproportionate distribution of wealth eventually leads to death and destruction when the poor majority gets the democratic power to physically oust (or kill) the outsider minority.

The book's main shortcoming is a lack of an explanation about how to handle the "market-dominant minority" issue and ultimately avoid bloodshed. But Chua does state that a remedy is beyond her book's scope. Rather, this book provides a different and valuable insight into the rampant spread of globalization and should be read by anyone desiring greater understanding of that topic.

Amy Chuas main thesis in this book, which can be seen in the subtitle on the cover, is indeed a strong and useful one. The doctrinaire democracy and capitalism that the US is pushing on developing nations, usually as a condition for financial or military aid, is nonsensical and barely rooted in reality. First, there has never been unrestricted (laissez-faire) capitalism in the US or any successful Western nation, given minimum wages, subsidies, and other aspects of a social safety net. There also has never been pure democracy in the US, as it took generations for women and minorities to achieve suffrage. One must also consider the structure of the Electoral College that was disastrously evident in the 2000 election (though Chua misses the opportunity to use this very pertinent example). In fact, total democracy and capitalism, which have even been rejected by the US, are extreme ideologies with as little hope for success in the real world as any other type of extremism. However this is exactly what we are forcing on the developing world, with plenty of disastrous consequences.

Chuas main tool of reference here is market dominant minorities which are the main beneficiaries in societies where capitalism is still developing, such as the Chinese in all of the nations of Southeast Asia, or whites in most of Latin America. These peoples are usually seen as greedy outsiders who are concentrating wealth in countries where the ethnic majorities are increasingly exploited and humiliated. Adding unrestricted democracy to this troublesome situation gives political power to the oppressed majority that they can then use to enact revenge on the exploitative ethnic minority. Horrific examples are the confiscation of Chinese businesses by Indonesia (which indirectly led to the Asian financial collapse in 1998) and even the genocide in Rwanda. This ethnic structure is not a problem in the Western world, but breeds instability and violence in non-Western developing nations when extreme American ideals are forced on unready societies.

However, this strong thesis is not the end-all explanation to the worlds ethnic problems, and this can be seen in the weaknesses in Chuas presentation. She is a rather repetitive writer, with the same examples popping up again and again in an attempt to beef up the argument. Also, Chua is far too worried about avoiding critics and continuously tries to prove that she is not anti-American or anti-globalization. In the process she wavers politically and indirectly shoots down many of her own points. Examples are her forced analyses of examples that dont quite fit her thesis but that she tries to use as support anyway, especially Yugoslavia (chapter 7) and her attempt to expand the argument to explain worldwide resentment of America (chapter 11). Chuas thesis in this book is certainly a very strong and believable one, but it probably requires more focus and political muscle to gain acceptance among policy makers.

How did a book written by a heretofore little known law professor on the topic of globalization of all things receive so much acclaim? The answer is that the book is clearly and poignantly written unlike many books on globalization by economists and sociologists. But its clarity and simplicity also subtly and superficially reduces globalization to an oversimplified and hackneyed version of Marxist materialsm. Amy chua is on to something big - really big - in her book: that in nearly every third world nation the transition to a capitalist economy has brought about the rise of a "market dominant majority" that is able to capture most of the wealth and power resulting in ethnic hatred and a viscious circle of violence. Chua starts out the book by writing about the tragic and gripping story of the murder in the Philippines of her ethnic Chinese wealthy aunt at the hands of her chauffer. She then enlarges her story to discuss the economic dominance of Chinese in Asia, Crotians over Serbs in the former Yugoslavia, Europeans in South American and South Africa, Jews in post communist Russia, and the resulting spiral of ethnic conflict. Her overworked thesis is the paradox that "free market democracy" breeds ethnic hatred, genocide, terrorism, and ethnic wars. All of the praise for the book by scholars on the back book cover and elsewhere misses the obvious -- this is an old thesis originally addressed by Marx and Engels over 150 years ago. Substitute the word "bourgeoise" for Chua's "market dominant minority," "the proletariat" for "the poor," and "control over the modes of production" for "market dominance," and you have a new lexicon of Marxism. The words "market" and "laissez faire" are also used in a biased fashion as misnomers to mean their opposite: cartels, monopolies, and elites. Chua says that poverty doesn't make people kill - indignity, grievances, and hopelessness does. But then she proceeds to prove otherwise in case study after case study. But man doesn't live by bread alone. This what social scientists call "legitimation" - which means that society is held together not simply by material needs and interests but also by beliefs and religious theodicies that justify the prevailing social order. What Chua misses is the even bigger issue of not why there is so much ethnic hatred, but why there isn't more or revolution? Chua says that third world globalization invariably ends up with a small ethnic elite subjugating the mass of poor people. She fails to mention that totalitarian government does the same only with a class of muggers instead of a commercial class. Some of her solutions such as stock ownership are naive; others such as creating legal property rights are more promising. For a deeper understanding of the issues I would suggest reading:
1. Peter Berger, The Capitalist Revolution: 50 Propositions about Prosperity, Equality, and Liberty.
2. Peter Berger, Pyramids of Sacrifice: Political Ethics and Social Change.
3. Peter Berger and Samuel Huntington, eds., Many Globalizations.

I agree with Ms. Chua in ...maybe 90% of her ideas. As a citizen of a third world country in latin-america , I have to agree that local minorities sometimes have the control of part of the economy. I also agree that USA is the market-dominant minority in the world, but I do not agree , at least regarding our country ( Dominican Republic) that we hate americans. My country was invaded twice during the last century by USA troops. The first time (1916) in order to collect USA loans and the second time (1965)...just to make sure that the democratic Constitution of 1963 was not reinstated ..and this intervention cost our people thousands of lifes. This was the direct result of the USA backed cup against the democratically elected gov't of Juan Bosch (1963). After the Trujillo dictatorship ( also supported by USA)we suffered the termination of democratic govt's , a civil war and state terrorism almost similar to Argentina's. We KNOW that a great part of this was sponsored by USA. Then in 1978 , the USA ( now with J. Carter as president) helped us to restore real democratic ruling and.. what happened? ..Democracy is not working , at least in promoting equal oportunities ...Who are we going to blame for this??? We only can blame ourselves , this is not the fault of USA or any market dominant minority
(we do not have such a thing here)...This is our fault...plain and simple..We corrupted nearly all public institutions...This really IS our mess and we are guilty... maybe 80% , but guilty anyway. We had for nearly ten years the fastest and higher GDP growth in latin america (1991-2000) and our corrupt politicians ended this..and now we are in deep trouble.

Now,here comes my point..when we refer to USA we are reffering to USA gov't..not to the average american citizen ..who happens to be hardworking , honest and very nice people to have around. Nobody here hates americans...in the past we hated YOUR POLICY for latin-american countries ..yes , we hated Kissinger and still do..but, believe me... he deserves to be hated..But we do not hate your people. Maybe a little envy??? Well, yes. But positive envy. Hey...our second largest city is.....New York
(dominicans died in WTC), we are the largest exporter of baseball players (whom we love) , a lot of them Major League material ( whom we love the most) , you are our main economic partner and we ALL have some relatives living in USA. But nobody can deny that USA policies ,in the past, have been succesful in creating ...hate among the people and wealth just for some dishonest politicians or rulers.

I believe that the main factor in our poverty is not a market dominant minority (chinese , lebanese, USA..etc) , but our inherited culture from the spanish colonial era. We are always trying to get our living from the state...via a nonproductive position in gov't or from corruption. Are we all corrupt people??? No...but , we the majority do not do a thing against the corrupt politician minority that is bloodsucking us. And that is the real problem...as I see it. It is a pity we do not have more libanese people down here....

Amy Chua's book rips the cover off a well-kept secret. In many Third World countries, market dominant ethnic minorities control the economy and abuse the poor majority. This is an explosive issue and I appreciate Ms. Chua for raising it.

That being said, World on Fire is a deeply flawed book that is woefully incomplete. For starters, once Ms. Chua she makes her point, she repeats herself to the point of nausea.

Ms. Chua raises issues that are very important, but her solutions would make things worse. Ethnic violence is exploding in every part of the world. Nevertheless, one comes away from Ms. Chua's book with the strong sense that she wants us to turn back the clock on democracy and free markets.

I had hopped that World on Fire would include a thoughtful discussion of possible solutions. Unfortunately, Ms. Chua's 340 page long book devotes only 20 pages trying to solve the problems that she discusses.

Ms. Chua's best "solution" to ethnic violence is for market dominant ethnic minorities to give more money to charities that serve the people they oppress!

Ms. Chua's hypothesis is that competitive markets and democracy are bad models for most of the world. Ms. Chua thinks the world would be better and less violent if we were to stop the spread of democracy and free trade. That way we could protect market dominant ethnic minorities from their poor brethren for the next two or three generations while the "natives" learn to become more civilized. This is the same argument that racist segregationists used during America's Civil Rights Movement.

Shame on you, Amy Chua!

It is doubly ironic that the daughter of Chinese Filipino abusers of Filipino natives completely ignores the most significant change in global competition. The astounding growth of the economy of the People's Republic of China Chinese economy is changing the world economic order. Nevertheless, Ms. Chua, like other anti-globalization zealots, still looks at the world as though Europe and America were still in control.

China's effort to turn 700 million subsistence farmers into factory workers is something we cannot afford to ignore. Yet Ms. Chua completely misses this issue because she doesn't have a clue about business or international trade. If she did, she might have recommended the elimination of Europe's Common Agricultural Policy and America's farm subsidy system. That one act would generate more jobs for the poor in Third World countries than all of the foreign aid combined.

I have spent the past three decades helping the poor in the United States and 27 countries improve the quality of their lives. The poor think the anti-globalization people are dead wrong. The poor do not want a continuation of the pre-globalization model that consigned them to permanent poverty. They are glad that they finally have a chance to work at jobs that pay them in cash instead of corn. What they want is true "free trade" so they can finally earn their way to a better life.

While Ms. Chua clearly understands the dynamics of race and power in Southeast Asia, her book falters when she leaves SE Asia. Ms. Chua hired law students to do goggle searches on parts of the world that she doesn't understand. Goggle searches can't, however, substitute for first-hand knowledge.

For example, her discussion about Indians in East Africa is offensively misleading. It completely ignores the long history of arrogant, offensive, racist and hostile antiblack behavior by far too many East African Indians. You can't discuss the explosion of anti-Indian ethnic rioting in East Africa without talking about the role of some Indians in fanning the flames of racial hatred.

Amy Chua also doesn't understand the role of the British played in creating a three-class system in East Africa and other parts of their empire. In Africa, Blacks were limited to subsistence farming and chattel labor. The British gave Indians control of the distribution and commerce sectors. Whites kept control of international trade, banking, the government and the military. This divide-and-conquer pattern repeated itself around the world. To undo it will take hard work, but Amy Chua doesn't address this at all.

By the time I finished Amy's book, I was frustrated and deeply disappointed at how she had squandered such a powerful beginning. But then, that is why it pays to read book reviews.

If you do decide to read her book, stop after the first 100-pages. You won't miss a thing.

"World on fire" argues that globalization has made matters worse, not better, in most Third World nations. The spread of laissez faire capitalism has made "market-dominant minorities" even more powerful than before. The introduction of democracy has given the dispossessed "indigenous majorities" a chance to attack the market-dominant minorities. More capitalism and more democracy, introduced simultaneously, therefore mean more instability and ethnic strife.

True, as far as it goes. But what does it all mean? And what should be done about it? It eventually turns out that the author, so seemingly critical of globalization, actually supports it. Her real problem turns out to be...democracy.

Amy Chua denies (!) that the conflicts between "maket-dominant minorities" and "indigenous majorities" are about class. She thinks it's a matter of ethnicity. I don't deny that classes are often ethnically based. But just as often, they are *not* ethnically based. Still, they are classes. From this, I draw the conclusion that "class" or "socio-economic status group" is a more fundamental phenomenon than ethnicity. The author believes the opposite, which simply isn't convincing.

But even as an analysis of ethnic strife, the book oversimplifies. Many of the market-dominant minorities mentioned in the book existed long before globalization. The Whites have long been "market dominant" in South Africa, Namibia and Zimbabwe. The Tutsis in Rwanda and Burundi were dominant even before the advent of European colonialists. Strictly speaking, the Tutsis aren't a *market* dominant minority, but a landed aristocracy. The author points out somewhere that most shops in Rwanda's capital Kigali were owned by East Indians. Nor were the Tutsis actually in power in 1994, when the Rwandan genocide took place. It's also difficult to see in what way the Tutsis have been benefited by globalization. Further, in what sense were the Croats a market-dominant minority in Yugoslavia? The Croats didn't control the Serbian economy. Indeed, the federal army and apparatus were probably dominated by Serbs! Nor do Israelis control the economies of the Arab states.

In Latin America, Chua herself admits that the conflicts were, for an extended period, couched in terms of class rather than ethnicity. However, she never draws the obvious conclusion: that's because the conflicts, at bottom, *are* about class. Nor does she reflect very deeply on the severe class conflicts in the Western world. They obviously weren't about ethnicity, since the haves and the have-nots usually belonged to the same "nation" or "race". The French revolution was as French as the ancien regime, and the Paris Commune was as French as Galliffet. The Russian revolution was more complex, but most people on both sides were Russians. The Spanish Civil War was mostly a straightforward conflict between left-wingers and fascists. And so on! Chua never presents a unified theory about what on earth is going on, but she constantly veers towards the opinion that the bottom line is ethnical. Ethnically homogenous nations supposedly make the transition to stable markets, democracy and prosperity better than ethnically heterogenous ones. But this is empirically disproven by many examples. Bangladesh is ethnically and religiously homogenous but still Hell on earth. Belgium, Switzerland, Finland, Canada and Spain are ethnically heterogenous but stable, democratic and prosperous. (Somebody might respond that these nations aren't "racially" heterogenous. But that is irrelevant, since White peoples have always fought and killed each other, for instance during the world wars or the Balkan wars. Besides, what about the United States, a predominantly White nation with a large Hispanic population that elected a Black African president? But this is a sidepoint, since the author doesn't define ethnicity in terms of "race".)

Other parts of her analysis are equally problematic. For instance, she suggests that the United States is somehow "spreading democracy" around the globe. I disagree. In many nations, the US doesn't promote democracy (Uzbekistan, Saudi Arabia, the other Gulf states) or supports sham democracy (how likely is it that Paul Kagame, a Tutsi, got 90% of the popular vote in Rwanda, a predominantly Hutu nation?). Chua also constantly complains about "crony" capitalism, as if that was some kind of aberration. Outside the dreams of libertarians, *all* large scale capitalism is by necessity crony-ridden. Finally, Chua seems to dislike the Western European welfare states, while grudgingly admitting that they have overcome class strife in the Western world.

At bottom, the author supports globalization, while suggesting that immediate democracy might not be such a good idea, since it gives the "indigenous majorities" a possibility to destabilize the situation. Instead, she hopes that the fraternal associations of the market-dominant minorities realize that, for their own good, they should play it more fairly.

Oh, please...

Since the market-dominant minorities are often targeted by ethnic and class violence, why haven't they come up with this themselves, after all these years? I mean, market-dominant minorities aren't stupid! It's not a co-incidence that they bribe off the corrupted indigenous leadership, while turning the indigenous majority into sweat shop labour, slaves or serfs. That, I think, is the whole point of the operation. And since class society has been working pretty well (more or less) for the past 10,000 years or so, it does have a certain "rationality" as well. As Chua points out when discussing Indonesia: the Chinese tycoons and their families easily avoided the anti-Chinese riots by simply absconding to Singapore, with most of their money, letting the Chinese middle class take the brunt of the attacks. Precisely. So why should they mend their ways, unless forced to, perhaps by a democratically elected "indigenous" government?

When all is said and done, this book, so seemingly critical of globalization and the greed of the dominant groups turns out to be another pro-establishment front for the same processes. The only solution the author can come up with is a more benign, Rotary-humanitarian form of globalization, coupled with a more limited (!) democracy.

As if that could stop the fire...

What bothers me right off about Chua's argument is her choice of examples of market societies- Russia, Indonesia, and so forth. These are not market oriented societies; they are, at best, mercantilist societies in which the government grants privileged status to some groups, seizes capital as they please, and otherwise distort markets. Her discussion of the experiences of the ethnic Chinese around the world puts me very much in mind of the experience of the Chinese in Malaysia, who have suffered exactly the sort of abuse she discusses. But it is not the existence of a market economy that is responsible.

In Malaysia, most seats in Universities are reserved for ethnic Malays, as are all government civil service posts. The result is a culture of privilege and sinecures that discourages innovation and enterprise for Malays, leaving it to the ethnic minorities. Not surprisingly, most businesses are developed and owned by ethnic Chinese Malaysians. This creates the kind of resentment that Chua describes, but the cause is not the existence of the market economy. This pattern is echoed throughout much of the East, wherever the Chinese merchant class exist.

The experience of the ethnic Chinese in the East echoes that of the Jews several hundred years before in Europe from the Middle ages through the 18th Century, and for the same reasons. Being shut out of the three traditional paths to wealth and power- the guilds, government, and the Church- the Jews engaged in banking, and were attacked in exactly the same way as the Chinese. But Western societies changed, becoming less mercantilist and more open, free and capitalist, and today, these economic differences no longer exist. We might thus assume that if these Eastern societies actually became more free and open, we would see them become more like Western democracies. Indeed, we already see this change happening in India, as the Indian economy becomes more open, and Indians participate more in the market. While India's great wealth was once held by royalty and outsiders, today it is ethnic Indian companies like the Tata Group who increasingly own the wealth.

Chua asserts that it is the redistributive policies of Western nations that allow for social stability in a market economy, and it is here that I think history refutes her arguments most strongly. Redistributive policies were not a major part of Western economies prior to WWII, with the exception of a few few economies that pursued unsustainable policies- Germany, most notably, and Italy. (In point of fact, I would argue that Germany in particular is a very strong parallel to countries like Malayasia that carved out privileged status for one ethnic group.) The real cause of stability in Western democracies has been not social programs, but social mobility, created by universal education, democracy, and free entry into the marketplace.