A new book argues that when Third World countries embrace democracy and free markets too quickly, ethnic hatred and even genocide can result.
The case Amy Chua makes in “World On Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability” is so clear and persuasive it almost seems as if it had been obvious all along. Yet her argument, that rapid switches to majoritarian rule and free-market democracy in many Third World countries benefit certain ethnic groups over others and lead to vicious sectarian strife, is quite new, if occasionally overstated. Writers such as Robert Kaplan have long argued that the Western obsession with exporting democracy to countries without the institutions to support it is naive and often dangerous, fostering demagogues and communal hatreds. Chua builds on this argument in an essential way, showing how expanding markets exacerbate the problem by enriching already-dominant minority groups even as democracy empowers angry majorities.
“World On Fire” is about a phenomenon Chua calls “market-dominant minorities,” groups like the Chinese in Southeast Asia, Jews in Russia, whites in Zimbabwe and Indians in East Africa and Fiji. Market-dominant minorities control hugely disproportionate percentages of their countries’ resources. Filipino Chinese comprise just 1 to 2 percent of the Philippines’ population, but control all of the country’s major supermarkets, fast-food restaurants and large department stores, and all but one of the nation’s banks. A similar situation obtains in Indonesia. Jews make up a similarly tiny proportion of Russia’s population, but of the seven “oligarchs” who control virtually all of the country’s business, six are Jewish. Lebanese dominate the economies in Sierra Leone and Gambia, while Indians dominate the economy in Kenya, along with a smaller, indigenous minority tribe called the Kikuyu. Similar examples abound worldwide.
It’s enormously touchy to talk about the economic element of communal violence, especially regarding Jews, since rhetoric about one ethnic group exploiting another is so often a precursor to atrocity. But that’s exactly why Chua’s book feels so urgent. No matter how politically incorrect it is to talk about, her book makes clear that minority market domination is a reality in much of the world, one that’s tied up in many ways with smoldering group hatreds and explosions of mass slaughter, and one that’s made worse by Western policies.
Chua, a professor at Yale Law School, is a careful, precise writer, and she makes it very clear that she’s not blaming prosperous ethnic groups for violence directed against them, or blaming capitalism alone for fomenting genocide. It’s a point she makes over and over again. (Her lawyerly penchant for summing up and reiterating her main arguments far too many times is the book’s greatest flaw.)
“The point, rather, is this,” she writes. “In the numerous countries around the world that have pervasive poverty and a market-dominant minority, democracy and markets — at least in the form in which they are currently being promoted — can proceed only in deep tension with each other. In such conditions, the combined pursuit of free markets and democratization has repeatedly catalyzed ethnic conflict in highly predictable ways. This has been the sobering lesson of globalization in the last twenty years.”
Nevertheless, “World On Fire” is not an anti-globalization screed. Chua is a former Wall Street lawyer who worked to help developing countries privatize their resources, and she continues to believe that, in the long term, markets offer the best hope for developing countries. Her scathing assessment of the way the West has foisted liberalization on the rest of the world is driven not by ideology, but by a careful examination of globalization’s unintended consequences.
“Back in the early nineties,” she writes, “I believed that the proceeds of privatization, as a World Bank official put it, would go to roads, ‘potable water, sewerage, hospitals, and education to the poor.’ Like many in the 1990s, however, I was viewing emerging market privatization through a rose-colored lens.” Later, she adds, “Even assuming that free market democracy is the optimal end point for most non-Western countries, in the short run markets and democracy are themselves part of the problem.”
Explaining why market-dominant minorities exist would probably require another volume, and Chua makes only a cursory attempt to do so. In some cases, of course, it’s obvious — the white minority in South Africa and Zimbabwe accumulated capital and expertise at the expense of the grotesquely exploited majority, who cannot now catch up without massive government help. Elsewhere group prosperity is attributable to superior business networks. Cameroon’s Bamileke, for example, “operate an informal capital market so efficient it constantly threatens to put government-owned banks out of business,” Chua writes. The reasons for Jewish economic success are more mysterious — especially in Russia, where they’ve been repeatedly subjected to vicious pogroms — and “World On Fire” does little to illuminate them. Chua is less interested in how minority groups come to dominate than what happens when they do.
She argues that when economic liberalization and democracy are rapidly introduced to countries with market-dominant minorities, the two forces necessarily come into conflict. “Markets concentrate enormous wealth in the hands of an ‘outsider’ minority, fomenting ethnic envy and hatred among often chronically poor majorities,” she writes. “Introducing democracy in these circumstances does not transform voters into open-minded cocitizens in a national community. Rather, the competition for votes fosters the emergence of demagogues who scapegoat the resented minority and foment active ethnonationalist movements demanding that the country’s wealth and identity be reclaimed by the ‘true owners of the nation.’”
In Indonesia, for example, free-market policies undertaken under Gen. Suharto, the U.S.-backed dictator, vastly enriched the country’s tiny Chinese minority, who in turn supported the strongman. By 1998, Chua writes, Chinese made up 3 percent of the population but controlled 70 percent of the private economy. That was the year democracy protests and riots forced Suharto to resign. His fall was accompanied by orgies of anti-Chinese violence — Chinese women began wearing “anti-rape corsets,” locked steel chastity belts. “[T]he prevailing view among the pribumi majority was that it was ‘worthwhile to lose 10 years of growth to get rid of the Chinese problem once and for all,’” she writes. “Meanwhile, the U.S. State Department called resoundingly for free markets and democratic elections.”
Many other countries share elements of this dynamic, though Chua sometimes seems to be stretching her thesis in order to fit in as many places as possible. She’s overreaching somewhat when she says, early on, “markets and democracy were among the causes of both the Rwandan and Yugoslavian genocides.” Clearly democracy was a factor in both, but the economic factors are much trickier. The gap in status between minority Tutsis and majority Hutus is indeed attributable to globalization, but of the old-fashioned, colonial kind — Belgian colonizers favored minority Tutsis over majority Hutus because of what was seen as their Caucasian-like features. And while Serbian hatred of the Croats was fanned by Croatian economic dominance, the Bosnians they butchered were as poor as they were. Chua makes these caveats herself in the relevant chapters, but they dilute some of the grand claims she lays out in her introduction.
Still, her larger point, that the policies seen as panaceas by the West can actually make things worse, holds true. Electoral democracy is often touted as an antidote to the tyranny and tribalism ravaging much of the globe. “For globalization’s enthusiasts, the cure for group hatred and ethnic violence around the world is straightforward: more markets and more democracy,” Chua writes. She notes that after Sept. 11, Thomas Friedman wrote of the Middle East, “Hello? Hello? There’s a message here. It’s democracy, stupid! Multi-ethnic, pluralistic, free-market democracy.”
This one-size-fits-all prescription for curing the world’s ills is implicated in the Rwandan genocide of 1994. As Chua writes, Hutu dictator Juvénal Habyarimana, who ruled from 1973 until the early 1990s, may have been corrupt and totalitarian, but he did protect the Tutsi population. Once he responded to Western — particularly French — calls to adopt multiparty democracy, though, Hutu supremacy became a potent weapon for Habyarimana’s political enemies. The genocidal Hutu Power movement was buoyed on a groundswell of popular support. Meanwhile, Chua points out, the “freedom of the press” encouraged by the West stopped the government from shutting down the hugely influential, rabidly anti-Tutsi newspaper Kangura.
“Sudden political liberalization in the 1990s unleashed long-suppressed ethnic resentments, directly spawning Hutu Power as a potent political force,” Chua writes.
The idea that democracy, America’s most cherished value, has exacerbated the last century’s bloodletting is terrible to contemplate. Yet Chua’s book ultimately supplies a tiny measure of hope. Unlike Kaplan, Chua doesn’t believe that enlightened autocracy is the answer for the developing world. For her, the problem isn’t democracy itself but the speed at which it’s implemented. Rushing it, especially without protections for individual rights or institutions for upholding the law, can be dangerous.
Kaplan believes that the right kind of despots can sustain a stable environment for capitalism to flourish, creating the middle-class institutions necessary to sustain democracy. One of his models is prosperous, undemocratic Singapore. Chua’s analysis, though, shows us that no amount of economic growth will turn countries that have market-dominant minorities, like Indonesia, into countries like Singapore, that don’t. Prosperity and stability won’t come to those countries until they find a way to narrow the chasm between rich minorities and poor majorities.
To that end, Chua argues for sweeping reforms that would give disenfranchised populations a stake in their nation’s resources, as well as massive affirmative-action policies of the kind being undertaken in South Africa and, with notable success, in Malaysia. Such a policy is a huge departure from the free-market evangelism of people like Thomas Friedman, but one more likely to lead to prosperous societies that can, eventually, turn into real democracies.
Of course, it’s not terribly likely that her recommendations are going to be implemented in most places anytime soon. In the end, “World On Fire” is valuable less for its prescriptions than for the perspective it offers on the seemingly incomprehensible violence shaking the world. With the fall of communism and the emergence of al-Qaida, it’s no longer fashionable to see ethnic conflict in materialist terms — the new battles are framed as a clash of civilizations rather than a scramble for resources. It’s a scarier opposition, because it’s so intractably defiant of reason. “World on Fire” suggests these conflicts might not be so primordial and irrational after all. It might be cold comfort to realize how atavistic enmities abroad have been inflamed by our own government’s policies, but at least these policies can, ultimately, still be changed.
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