March 14, 2006

Chua - World On Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability

Chau, Amy, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, Doubleday (2003) 340 pp.

In a recent post, Jim Bennett outlined both his concerns and his appreciation for Amy Chua’s book “World on Fire.”

Unlike Jim, I was less convinced that she was offering “one size fits all” model but very much inspired by the utility of her model for understanding the relationship of the world to the United States and the Anglosphere. The US, and its occasional allies, are locked in a passionate love-hate relationship with the rest of the world … a discussion fought now on television that often appears deranged or infantile yet is driven by very real concerns and anxieties. There’s hypocrisy and cant aplenty on both sides of the argument as far as the eye can see. And it is the “do as I say, not as I do” conundrums facing the Anglosphere that will drive new and focused solutions … new legal structures, new ethical propositions, new responses to weapons of mass destruction and hyper-destructive individuals, new balances between individual and social rights, new clarity and, one assumes, a newly-minted sense of self-preservation.

Much of the reading I’ve been doing over the last few months has focused on national productivity figures (cf. Lewis’s The Power of Productivity) and on the EU’s response to the increasing GDP per capita gap between it and the US (The 2000 Lisbon Agenda). To summarize: the United States (with 300 million people) has roughly 30% greater GDP per capita growth each year than all other nations over 10 million in size. Canada (at roughly 78% of the US standard and 30 million people) is the only exception. My reading focus has been on the solutions offered by serious people around the world to close the gap or find a way to accommodate the gap within a successful sustainable social model. At the same time, I’ve been watching the figures, and discussion, on higher education and the “scientific wealth of nations.” In many ways, however, the responses and strategies put forward to catching up with the US, by both the industrialized and industrializing world, have been eerily parallel to those documented in the past by Chua for nations who have struggled to cope with free markets and democracy over the last forty years. There’s a lot more finger-pointing and bad-mouthing than concrete progress.

To quote Chua (p.6):

This book is about a phenomenon – pervasive outside the West yet rarely acknowledged, indeed often viewed as taboo – that turns free market democracy into an engine of ethnic conflagration. The phenomenon I refer to is that of market-dominant minorities: ethnic minorities who, for widely varying reasons, tend under market conditions to dominate economically, often to a startling extent, the “indigenous” majorities around them.

Now, the Anglosphere is no longer an ethnic minority. But it is very much a minority of civic culture and legal approach (cf. LLSV) when judged by global standards. Yet the crux of Jim Bennett’s Anglosphere Challenge is that it is coping better with the approaching Technological Singularity than other cultures and other nations. The United States no longer has companions in this technological current … it has a crowd of slip-streamed commensals and a vast deeply-dispirited school of fish left in its wake. No one is expecting Ireland, Norway or Luxembourg to convert their per capita GDP into market dominance. And for most of the world’s population in Africa, Latin America, and much of Asia (as highlighted in Chua’s book), only an Anglosphere catastrophe could allow them to return to the relative parity they enjoyed two centuries ago. For them, things are bad and getting relatively worse … but now they have their humiliation televised nightly in their living rooms.

I believe Chua’s greatest contribution to this blog is the description of the nature and history of these market-dominant minorities … of identifying Israel and the United States as regional and global market-dominant minorities (MDMs) respectively … and giving us some sense of the rhetoric that will be used (and the self-destructiveness that will result) if those two nations are challenged directly. Zimbabwe and Rwanda writ large is everyone’s nightmare. And Chua’s documentation of the Chinese, Indian, Lebanese, and Jewish MDMs ensconced throughout the Third World promises more turbulence before the story is over.

I think of the current Third World rhetorical arguments as succumbing to the Housecat-Tiger fallacy. In a thousand ways, many no doubt yet undiscovered, the housecat and tiger are identical. Their physiology, anatomy, behaviour, and cruelty are matched feature for feature. So yes, the West is selfish, greedy, indifferent, violent, indolent, dissolute, sanctimonious, arrogant, discriminatory, and so on and so forth.

But the only comparison that really counts is that the housecat will bite your finger. The tiger will bite, and crush, your neck. So too, in the dominance of the Anglosphere over the scientific, technological, cultural, and military (monopoly of power) spheres, there are many cruelties (some of indifference, others intentional) inflicted on the nations and peoples of the world. The alternative cultural and political structures on offer however all appear catastrophic by comparison. And lead back to the “good old days” of despots and tyrants and empires. The real empires, not the much-maligned facsimile of the Pax Americana.

All these global controversies seem more comprehensible if we use Chua’s concept of the “market-dominant minority” and identify the disruptive forces of the free market and democracy as working particularly in favour of the Anglosphere … effectively, according to Chua, America (the global MDM) and its farm team of talented English-speakers.

The statistics are compelling. Just as the ethnic German divisions that Hitler needed to defeat the Soviets were born in Minnesota instead of Bavaria, the European and Asian scientific talent necessary to compete with the Americans works in the US, not the Continent. And the graduates of African educational institutions migrate at very high rates to the industrialized world. With not a single non-English-speaking university in the top twenty (except for the University of Tokyo) … according to the Shanghai Jiao Tong University academic ranking of world universities. … the Anglosphere creates an irresistible magnetic force for the cream of scientific, academic, and managerial talent in the world. Chua, ironically, is a perfect example.

Turning again to her (p.259):

The bottom line is this. Democracy can be inimical to the interests of market-dominant minorities. There were good reasons why the Indians in Kenya and whites in South Africa, Zimbabwe, and America’s Southern states resisted democratization for generations. Market-dominant minorities do not really want democracy, at least not in the sense of having their fate determined by genuine majority rule.

Any more than the US, or the Anglosphere, wants its future determined by the votes of everyone else on the planet.

Chua concludes her book with sections on how markets and democracy might be more humanely and effectively introduced where they currently don’t exist. The case for a nuanced introduction of democracy and free markets, to reduce suffering in the general population, seems unassailable. Unfortunately, in societies firmly established on rent-seeking principles, every delay or fine-tuning in opening up a country provides more opportunities for minority predation (either in the market or in the government). And someone has to police the process. Usually at the barrel of the gun. This sounds a lot like Afghanistan writ large. Without a “big brother” to ensure smooth transitions, the indigenous culture is left to sort things out for itself … a matter that is harder and harder with guns, explosives, and demagogues finding new synergy.

As mentioned above, Chua’s descriptions of how MDMs work, and how they are assaulted, makes for sobering reading but it also gives us a model to understand why Anglosphere culture is simultaneously admired, imitated, and repudiated. This is a well-written book with fascinating and useful summaries of recent events in very different parts of the world. No, it isn’t all things to all people. And, yes, one may quibble with the details of who’s an MDM and what role they play in any given country. But the broader question of how and why free markets and generic democracy unleash ethnic violence, and occasionally massacre and genocide, seems answered with some utility.

I found the description of the US as a non-ethnic market-dominant minority very thought-provoking and a very useful tool for understanding the rhetoric of visceral resentment and plaintive dependency which is now dowsing America with metronomic frequency.


Table of Contents

Part One - The Economic Impact of Globalization

1 Rubies and Rice Paddies - Chinese Minority Dominance in Southeast Asia
2 Llama Fetuses, Latifundia, and La Blue Chip Numero Uno - "White" Wealth in Latin America
3 The Seventh Oligarch - The Jewish Billionaires of Post-Communist Russia
4 The "Ibo of Cameroon" - Market-Dominant Minorities of Africa

Part Two - The Political Consequences of Globalization

5 Backlash against Markets - Ethnically Targeted Seizures and Nationalization
6 Baclash against Democracy - Crony Capitalism and Minority Rule
7 Backlash against Market-Dominant Minorities - Expulsions and Genocide
8 Mixing Blood - Assimilation, Globalization, and the Case of Thailand

Part Three - Ethnonationalism and the West

9 The Underside of Western Free Market Democracy - From Jim Crow to the Holocaust
10 The Middle Eastern Cauldron - Israeli Jews as a Regional Market-Dominant Minority
11 Why They Hate Us - America as a Global Market-Dominant Minority
12 The Future of Free Market Democracy

Posted by jmccormick at March 14, 2006 11:29 PM

You say, "Just as the ethnic German divisions that Hitler needed to defeat the Soviets were born in Minnesota instead of Bavaria" -- interesting point, I've never heard this before. Could you provide some more data or a link or a reference or some key words, so that I can find out more information about this? Thanks!

Posted by: Morgan at March 15, 2006 12:05 PM


I think what he means is that those divisions were in fact US citizens in the US Army and Air Force who happened to be of German ancestry, not some kind of German-American Bund returnees

Posted by: Jim at March 15, 2006 01:23 PM

Reading this post leads me to believe the position of the United States vis a vis the rest of the world is similar to nothing so much as that of the newly born United States looking west in 1790. It would not be surprising if the indigenous cultures fear our presence on the world stage and seek to end it.

Posted by: Richard Heddleson at March 15, 2006 03:23 PM

Richard, with our demographics we're not about to take over and settle any large new areas of land. Independence-era America had probably the highest rate of population increase in its time. (High birth rates, high childhood survival rates.) Not so today.

Posted by: Jim Bennett at March 15, 2006 04:15 PM

Agreed as to those facts. And no one is standing up saying that it is our manifest destiny to settle the rest of the world. But from the other guy's perspective, there is a fair amount of similarity. An energetic, technically adept, agile and absorbtive culture is about to confront them and there is very little doubt about the outcome.

The only thing restraining our demographics is national policy. Were we to loosen our self imposed restrictions, or say to accomodate large numbers of asylees from Western Europe or China, the story could be very different.

Posted by: Richard Heddleson at March 15, 2006 04:46 PM

I am less convinced of the usefulness of the "Market Dominant Minority" model for understanding the USA's position vis-a-vis the rest of the world than is James. The MDMs clasically function as a minority within another society's economy -- they organize it and control trading into and out of it, but they don't actually do the majority of the work. America still manufactures mostly for itself, and, outside of its borders, is most active in the rest of the Anglosphere --and that interpenetration is a two-way street, UK finance (to take one example) is very active in the US. Americans aren't the MDM of the Anglosphere either, it's more like convergence. In other words, globalization is advancing, but the global economy is still nothing like a unified market comparable to a national-scale market -- hell, even the EU does not really have a full single market yet. And in that global market, even to the extent it exists, the American don't really operate like an MDM. (One could argue the Chinese are more likely to become the global MDM in the classic sense, if there ever is to be such. They've had lots of practice.)

Yeah, the US is the unipolar power by a wide margin. But its will and/or ability to impose its say abroad is quite limited, as Iraq demonstrates. It's more like the US has a greater ability to do what it wants internally, a greater ability to intervene than most, and a quasi-veto over certain international situations. But all of these "super-abilities" are in fact quite finite and limited.

In a way it's a pessimal situation -- the US is stronger enough than most that it becomes widely resented, but not so strong that it can prevent the negative effects of that resentment. Even to the extent chua's analogy is true, it's hard to see how it's useful. The US does already do many of the things that Chua perscribes for the MDMs to mitigate resentment - -it's a big, visible donor and always the leader in internatinal disaster relief, as in the recent tsunami and subcontinental earthquake events. But it can't really assimilate itself to the majority culture, as the Chinese did in Thailand, (there is no single majority culture) although one could argue that the internationalization of American corporations is an attempt to do just that.

Posted by: Jim Bennett at March 15, 2006 06:08 PM

Mr. McCormick:

You say that the U.S. "has roughly 30% greater GDP per capita growth each year than all other nations over 10 million in size". Do you mean to restrict this to developed countries? China's and India's GDP growth are both greater than the US's, though both face imposing challenges to maintaining that growth rate.

I'm not sure how much sense it makes even conceptually to treat the US as a MDM. It's open in ways that qualitatively distinguish it from traditional MDMs, as you enumerate them. For example, Americans freely intermarry with those from nearly all cultures. I guess this amounts to another way of saying what Jim Bennett just did.

Posted by: Shelby at March 15, 2006 06:51 PM

Thanks for everyone's comments.

Morgan & Jim: Yes, indeed. I was referring to the 150 years of German emigration to the US that created fervent *Allied troops*.


I think I may have confused you by referring to per capita GDP growth. (The Lewis book review has more detail). Here are some quick numbers from the CIA World Fact Book.

Annual GDP (Purchasing Power Parity) 2005 est. in US dollars [population]

United States $ 12.370 trillion [0.3b]
China $ 8.158t [1.3b]
India $ 3.678t [1.1b]

GDP 2005 Growth (%)
China 9.20
India 7.10
United States 3.50

Current GDP (PPP) per capita [2005 increase] Compound Interest Calc assuming GDP growth sustained (my *very* rough calculations)
United States $ 41,800 [$1463] in 20 years US = $83K
China $ 6,200 [$570] 22 years to US *2005* level
India $ 3,400 [$241] 36 years to US *2005* level

It is highly unlikely that China and India will continue to sustain such high growth rates. It *is* likely that they will continue to have relatively high rates as long as they can mobilize more capital and more people into their economy. But at some point, like the EU and Japan, they reach a point of diminishing returns. In the period 1990-2005, that plateau for the G7/EU is something like 70% of the US GDP (PPP) per capita ... and dropping!

JB & Shelby: I'm quite willing to accept the limitations of the MDM concept but it is worth considering how Chua herself distinguishes between the ethnic MDMs that are symbiotes to pre-Exit cultures, and the global MDM that is setting the terms of the "New Exit" in the first place. The fact that the US doesn't have *total* ability to control the world, or that it is open to substantial interaction with other nations at a financial or intermarriage level, doesn't obviate the reality that it is the tail that wags the global dog. And if the productivity numbers hold up (via a Technological Singularity and/or wisdom of crowds/Army of Davids effect), then the US becomes a "pig that flies" ... a nation that can be traded with by everyone but not a nation that can be emulated or matched.

My focus, in the blog post, is in the rhetoric. Calling the US a global MDM may be clumsy from the perspective of a political scientist, but it is very apt from the perspective of current media discourse. The global rhetoric (and its domestic echo) is schizophrenic in its simultaneous bilious and craven tone. *Just like* the rhetoric of indigenous response worldwide to perceived MDMs. That is: "YOU are the source of all our suffering, and only YOU can fix our problems." So maybe the US isn't an MDM, Jim. It's just going to be treated like one. Distinction, in my view, without a difference. The diagnostic indicator, in my view, is the American public's capacity for international consensus. To the extent that it goes its own way economically and diplomatically, it's declaring its "minority rights" in the Singularity Market.

Thanks for all the comments. A great topic for discussion.

Posted by: James McCormick at March 15, 2006 10:53 PM

Mr. McCormick:

(Please forgive the formality; too many Jims) The GDP growth calculations should have been expressed as you did in your comment, because "increasing GDP per capita gap" is too easily read as one that, if trends continue, will not close. I'm too lazy to do the math right now, but even using your figures China and even India will catch up with the U.S. at some point, if their growth figures don't change (which of course they will). (For what it's worth, I expect the 21st Century to see India eclipse Europe and China both as economic powers, for Anglospheric reasons.)

Posted by: Shelby at March 16, 2006 02:05 AM


I think a case *can* be made that, barring some unknown catastrophe or miracle, "if trends continue, [GDP per capita] will not close". My rough compounding calculation assume unsustainable annual growth for China and India over the course of decades, without disruption ... not too likely. Europe/Japan figures have plateaued for reasons Lewis [The Power of Productivity] outlines carefully. China and India may have huge total annual GDP vs. the US quite soon, but their infrastructure equity and per capita GDP will probably remain relatively low in comparison to the US, for centuries. Most of their population remains on the land, with very low levels of productivity. The capital (financial and political) to move them to factories and services would be gargantuan. We'll see. It's a long timeline in any event. All the best ... JM.

Posted by: James McCormick at March 16, 2006 10:26 AM
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