Book Review

Globalization and Democratization—A Combustible Mix? World on Fire:How Exporting Free Market Democracy Breeds Ethnic Hatred and GlobalInstability. Amy Chua. New York: Doubleday Books, 2002: 256 pp., ISBN0385503024, $ 26.00 (paperback).

GEORGE MICHAEL

University of Virginia’s College at Wise

The subject of globalization has fascinated scholars for over a decadenow. In essence, globalization involves the movement of capital, goods,services, people, ideas, and even diseases across national borders. Fur-thermore, globalization suggests a greater level of interconnectednessamong the various peoples of the world on a scale never before seen.Integral to this development is the new information revolution, which en-ables people across broad expanses to communicate in real time. Accord-ingly, both democratization and free market economics are thought to flowfrom this process, as information empowers people to seek out new eco-nomic opportunities and control their own destinies via free elections. Forthe most part, American elites and intellectuals have championed global-ization as a trend that promises to lift all boats in the world, albeit notwithout some minor disruptions and inconveniences along the way.However, Yale law professor Amy Chua, herself a paragon of the newAmerican elite, takes issue with this sanguine view of globalization.

Over the years, many observers predicted that the march to modernitywould diminish ethnic and religious affinities among the populaces of thedeveloping world, thus fostering more tolerant and pluralistic societies.However, the central thesis of World on Fire: How Exporting Free MarketDemocracy Breeds Ethnic Hatred and Global Instability is that thisassumption is wrong. For a large portion of the world the combination of

Please address correspondence to George Michael, Department of Administration of Jus-tice, University of Virginia’s College at Wise, One College Avenue, Wise, VA 24293; e-mail:gjm3a@uvawise.edu.

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economic globalization and democratization is a combustible mix. Gen-erally speaking, various free trade policies and the process of globalizationtend to redound inordinately to the favor of what Chua’s dubs ‘‘marketdominant minorities.’’ Chua, through her previous experience as an inter-national consultant, observed an interesting pattern in much of the devel-oping world. Often very small Diaspora communities in a country will ownor control a wildly disproportionate share of that nation’s wealth, industry,and commerce. This of course does not go unnoticed by the indigenouspopulation, which often resents their marginal status in their own home-land. Economic globalization tends to exacerbate these inequities insofar asthe market dominant minorities are better-positioned to take advantage ofnew economic opportunities, have better access to capital, and a culturaltradition of entrepreneurialism, that the vast masses of natives usually do nothave. What is more, these advantages result in a certain ‘‘path dependency’’whereby they tend to increase with each successive generation. Despitetheir predicament, the natives retain one advantage: their numbers. Thus,when democratization is introduced concomitantly with economic glob-alization, the results can be potentially catastrophic. Chua makes a cogentcase that this dynamic is behind much of the ethnic conflict that bedevilsthe world today.

To illustrate her thesis, Chua surveys several regions of the worldincluding Southeast Asia, Latin America, post-Communist Russia, andAfrica. She begins the book with a personal anecdote. Her Aunt Leona, anethnic Chinese, was murdered in her Philippine home, her throat slit by herchauffer. As Chua explains, such violence directed against the ethnic Chi-nese is not uncommon. After all, as one Filipino policeman explained toChua, the Chinese ‘‘have more money.’’ Moreover, many ethnic Filipinosresent that Chinese Filipinos, composing just 1% of the population, controlas much as 60% of the private economy. Hundreds are kidnapped eachyear and many of the victims are murdered even after ransom is paid.

Against the conventional wisdom, Chua warns that democratization isnot the great panacea to effect stability in much of the developing world. Asshe explains, introducing democracy under such volatile conditions doesnot ‘‘transform voters into open-minded cocitizens of the national com-munity.’’ Rather, democracy can become just another battlefield in therealm of ethnic power politics. For example, she cites the case ofZimbabwean President Robert Mugabe, whose government-sanctionedseizures of white-owned farms have alarmed some quarters of the inter-national community. For Mugabe’s part, this approach is consistent with thedesires of much of his country’s population. In fact, he implemented thepolicy for that very purpose–-to gain public support, which had slipped in

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recent years. Contrary to what the Marxists had predicted, more often thannot, indigenous populations organize politically around traditional ethnicand religious lines rather than economic class.

When free market democracy is pursued in the presence of a marketdominant minority, Chua observers that a backlash is almost certain toresult. This backlash will usually take one of three forms. The first typeconsists of a backlash against the market, which targets the market domi-nant minority’s wealth. Mugabe’s seizure of white-owned farms falls intothis category. In the second type of backlash the market dominant minorityrolls back democracy in an effort to protect its wealth and status. Chua citesthe regime of the late Ferdinand Marcos, which protected his wealthyChinese supporters as an example of this category. Finally, the third type ofbacklash involves violence directed against the market dominant minority,which can occasionally reach genocidal proportions. This was most tragi-cally illustrated in both the Balkans and Rwanda during the 1990s. As Chuaexplains, in the former Yugoslavia, Croats and Slovenes traditionally en-joyed a much higher standard of living than ethnic Serbs. She believes thatthis economic disparity was a fertile source of ethnic resentment in theBalkans. Likewise, in Rwanda, the minority Tutsis were far more prosperousthan their Hutu fellow-citizens. Ironically, efforts by agencies such as Am-nesty International to strengthen free speech allowed demagogues, throughmedia including radio and newspapers, to mobilize the Hutu populationagainst the Tutsis. By the time the bloodletting was over, up to 500,000Rwandans had been killed by their fellow countrymen.

Actually other scholars before Chua have taken notice of the potentialhazards of rapid economic and political development. She notes that Lipset(1959), Huntington (1968, 1987), and more recently, Kaplan (2001) rec-ommended a proper sequence of development, in which markets precededdemocracy. Many years ago, Huntington was one of the first political sci-entists to take issue with the so-called ‘‘compatibility theory,’’ which pos-ited that certain laudable political and economic goals complement andreinforce one another—mainly, (a) economic growth; (b) economic equityamong citizens of the population; (c) national autonomy; (d) stability; and(e) democracy. Like Chua, Huntington contended that the conventionalwisdom that ‘‘all good things go together’’ was empirically unfounded. Thatis to say, often these separate components were not complementary andcould actually impede one another. As Huntington saw it, the Westernworld modernized at a relatively slow rate, and as result, these componentswere able to coexist and develop. However, the rapid pace of moderni-zation in the developing world has not created an environment conduciveto the contemporaneous pursuit of these various goals.

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Chua also notes that the history of economic and political developmentin the West has been qualitatively different from that which has occurred inthe Third World. Specifically, she notes the relative absence of marketdominant minorities in the countries of the West today. Be that as it may,Chua points out that historically the Western world has neither been im-mune from these same ethnic dynamics nor free from the core dynamic ofcapitalism, i.e., market wealth concentrated by a minority and democraticpower held by the majority. Although potential conflict inheres in such arelationship, it has manifested itself less frequently in the West as it currentlydoes in the developing world. The principle reason is that the wealthy classis generally not viewed as a distinct market dominant minority despite thedisproportionate economic success of certain ethnic groups. She cites thecase of Microsoft founder Bill Gates, whose wealth is estimated to beequivalent to as much as the bottom 40% of the American population.Generally speaking, his fabulous wealth engenders no widespread resent-ment, as he is seen as just another American. What is more, Chua notes thatracial divisions have in some instances actually served to attenuate majoritydemands for redistributive programs. For example, the Democratic Party’sentreaties to African-Americans and other minorities alienated manyworking class whites, who found a new home in the Republican Party. Chuadoes not seem to believe that the increasing heterogeneity of the Americanpopulation portends inter-ethnic violence based on economic disparities.Although whites may decline to minority status sometime around mid-century, she finds it implausible, owing to a strong, ethnically cross-cuttingnational identity in America, that demagogic politicians could depict whitesas outsiders ‘‘stealing the wealth from ‘true’ Hispanic, black, or Asian‘owners.’ ’’ What is more, the high rate of intermarriage would also tend toattenuate potential conflicts among ethnic and racial groups as well.

However, on some occasions, even the West has experienced some ofthe most violent episodes of ethnic conflict. Chua very gingerly applies hertheory to explain the phenomenon of anti-Semitism in the West. She citesthe case of Weimar Germany. Shortly after World War I, Germany em-barked on an ambitious marketization program concurrently with anexpansion of democracy. Despite the privation of that period, German Jews,as a group fared very well. As Chua points out, although Jews plainly did notcontrol the German economy, they were, however, disproportionatelyrepresented in numerous prestigious professions and occupations, whichcontributed to hostility among ethnic Germans, who felt displaced duringthe economic depression. Not unlike contemporary demagogues in thedeveloping world, Hitler exhorted Germans from all classes to ‘‘take back’’their country from their ‘‘enemies’’ at home and abroad.

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Several interesting parallels between Weimar Germany and post-Communist Russia can be inferred in Chua’s study. Not unlike WeimarGerman after the First World War, Russia introduced radical market reformsconcomitantly with democratization after the fall of communism. ManyRussian Jews acquired enormous wealth in the days of incipient capitalismthat followed. At the time her book was released, six of the seven multi-billionaire ‘‘oligarchs’’ were of Jewish ancestry. However, a backlasheventually emerged as several ultra-nationalist parties and organizationsnow seek to eliminate Jewish influence in Russia. What is more, the currentRussian president, Vladimir Putin, enjoys a spike in popularity each time hemoves against an oligarch. Increasingly, Russians identify Jews as the cul-prits of Russia’s decline.

Regrettably absent in Chua’s study is any discussion of social identitytheory, which can be invaluable in helping us understand the dynamics ofethnic conflict and the development of ethnic group consciousness.1 AsChua points out, ethnic identification is not static, but shifting and highlymalleable. In this regard, MacDonald (1998) draws upon social identitytheory to explain the dynamics of anti-Semitism and the formation of gentilegroup identity. Not unlike Chua, he sees ethnic conflict stemming in largepart from resource competition. In Separation and Its Discontents: Towardan Evolutionary Theory of Anti-Semitism, MacDonald argues that the vari-ous anti-Semitic mass movements that have punctuated the history of theWest were in large part animated by a competition over resources withJews. What is all the more controversial about his theory is his assertion thatthe group interests of Jews and gentiles have on occasion been at cross-purposes, at least in the history of the West. Consequently, as MacDonaldsees it, anti-Semitism is often reactive and arises out of genuine conflicts ofinterest. According to MacDonald, Jewish ethno-centrism and exclusivityhave on some occasions produced a heightened sense of group identity inthe various gentile populations among whom Jews have lived. Some readerswill find MacDonald’s research a useful complement to Chua’s book.

In somewhat of a stretch of her theory, Chua argues that in an era ofglobalization, America is increasingly seen as nation of market dominantminorities pitted against much of the rest of the world. In fact, Chua suggeststhat 9/11 terrorist attacks that were visited upon America can be explainedin large part to America’s preeminent status in world affairs. As she explains,‘‘the September 11 attacks were an act of revenge by the weak against thepowerful motivated by tremendous feelings of humiliation and inferiority.’’Such an assertion on Chua’s part would belie the numerous fatwas andpublic pronouncements of Osama bin Laden, who has consistently enu-merated various policies as the source of his grievances against the U.S. An

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argument could be made that American cultural hegemony engenders acertain level of animosity among both friends and foes alike. As Barber(1996) expounded in his book, Jihad versus McWorld, American culture isvirtually ubiquitous in the world today; however, there is no solid evidencethat American culture or sense of Islamic inferiority fuels Islamic terrorismagainst the U.S. Also, the U.S. trade deficit, which approached a new recordlevel of $ 48 billion in April 2004, would seem to undercut the position ofunmitigated American superiority, at least in the area of commerce.

In Chua’s opinion, American policy towards democratization has beenmisguided. Efforts to foster democracy and voter participation could lead tomore ethnic upheavals in the future. As she points out, as of the year 2000,an estimated 60% of the world’s population living in 120 countries, livedunder democratic rule—a vast increase from a decade ago. The competitionfor votes quite often encourages demagogues to scapegoat resentedminorities and promise to return the national wealth to its ‘‘true’’ owners. Torecapitulate, Chua warns that the simultaneous pursuit of free markets anddemocracy are at loggerheads and quite often lead to confiscation, autoc-racy, and even mass slaughter.

Despite her thorough treatment of the topic on the relationship be-tween ethnic conflict and resource competition, Chua skirts an importantnormative question: Are there authentic conflicts of interests between themarket dominant minorities and the majority population? She does, how-ever, recommend four basic policy strategies to counter the invidious effectsof gross economic inequities in the developing world and conflicts to whichthey give rise. First, governments can spread the national wealth throughtax-and-transfer programs. The second strategy is to grant the poor legallydefensible property rights. A third strategy is to give the poor majorities anownership stake in the country’s corporations and capital markets. Finally,the most controversial strategy is to consciously ‘‘correct’’ wealth imbal-ances in the style of affirmative action programs in the West. As regards themarket dominant minorities, Chua believes that they could amelioraterelations with their majority populations by contributing to the vitality ofcherished national symbols. Such efforts she believes would generate goodwill and serve to mitigate conflict between the two groups.

As for why market dominant minorities arise in the first place, Chua isshort on answers. However, Sowell (1995) has written extensively in thisarea. And like Chua, he notes the role of middlemen that both DiasporaJews and Chinese have played throughout much of their histories. His re-search suggests that the persistence of involvement of particular ethnicgroups in certain occupations can be ascribed to enduring cultural char-acteristics that they exhibit.

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In sum, The World on Fire is a highly readable book that raises severalimportant issues about the course of globalization. Professor Chua bringsthese issues into sharp focus and in doing so, explains the roots of so muchethnic conflict, which afflicts the world today.

NOTES

1. Essentially, social identity involves three central tenets. First, categorization, that is,people tend to place others into groups to better understand their social environment.Second, identification, which can take place at both a personal and collective level.Individuals develop not only a personal identity, but also come to think of themselves asbelonging to particular groups. In fact, one’s group membership can also be an integralpart of one’s personal identity. Finally, the third idea of social identity theory is socialcomparison. Essentially, members of a group tend to draw comparisons between them-selves and members of other groups. Social identity theory posits that individuals perceivethemselves as unique individuals as well as members of distinct groups. Both are equallyvalid expressions of self. For a good summary of social identity theory see Abrams andHogg (1990) and the Social Psychology web site at the Australian National University athttp://www.anu.edu.au/psychology/social/socident.htm.

REFERENCES

Abrams, D., & Hogg, M. A. (1990). Social Identity Theory: Constructive and Critical Advances.New York: Springer-Verlag.

Barber, B. R. (1996). Jihad vs. McWorld: How Globalization and Tribalism are Reshaping theWorld. New York: Ballantine Books.

Huntington, S. (1968). Political Order in Changing Societies. New Haven and London: YaleUniversity Press.

Huntington, S. (1987). The Goals of Development. In M. Weiner, & S. Huntington (Eds.),Understanding Political Development (pp. 3–32). Glenview, Illinois: Scott, Foresman/Lit-tle, Brown Higher Education.

Kaplan, R. D. (2001). The Coming Anarchy: Shattering the Dreams of the Post Cold War. NewYork: Vintage.

Lipset, S. M. (1959). Some Social Requisites of Democracy: Economic Development andPolitical Legitimacy. American Political Science Review, 53, 69–77.

MacDonald, K. (1998). Separation and Its Discontents: Toward an Evolutionary Theory of Anti-Semitism. Westport, CT: Praeger.

Sowell, T. (1995). Race and Culture. New York: Basic Books

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