"World On Fire" by Amy Chua

A new book argues that when Third World countries embrace democracy and free markets too quickly, ethnic hatred and even genocide can result.

By Michelle Goldberg

Jan 13, 2003 | 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.'"

Next Page: Orgies of anti-Chinese violence in Indonesia

• View blog reactions