World on Fire

by Amy Chua

Doubleday, New York, New York; 2003; ISBN 1-0-385-50302-4; 340 pages; $26.00

Reviewed by John D. Trudel, www.trudelgroup.com

World on Fire is the most profound book on global business and international trade policy that you’ve not read and probably never even heard of. It deserves deep consideration.

The book links the two greatest trends in the world today: globalization and violence. There have been a few good books on globalization from the perspective of theory, but this one is a pragmatic report on what’s actually been happening.[i]

Professor Chua is well credentialed to write such a book.  She teaches at Yale, but her experience is more than academic. She comes from one of the prominent Chinese families in the Philippines, was trained almost from the cradle in global trade, and rose to employment with organizations like the World Bank. She fuses compelling research with firsthand experience to build her case, and her conclusions are sobering. 

This book is a study in unintended consequences: “How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.” What happens when you combine the unfettered essence of the two most fundamental precepts of the West, democracy and free market economics? Most would expect good to result. 

“After the fall of the Berlin Wall a common political and economic consensus emerged, not only in the West, but to a considerable extent around the world. Markets and democracy, working hand in hand, would transform the world into a community of modernized, peace-loving nations. In the process, ethnic hatred, extremist fundamentalism, and other “backward” aspects of underdevelopment would be swept away.”[ii] As Ms. Chua says, “The consensus could not have been more mistaken.” [iii] 

It does not please professor Chua to report this. She’s not an anti-globalist. 

What caused her to notice something was badly wrong wasn’t reading headlines about protests, riots, or terrorism. It was more personal. Her aunt Leona, her father’s wealthy, unmarried twin sister, was killed in her home in the Philippines. 

The police interviewed the witnesses. The household maids confessed that the chauffer planned and executed the crime with their knowledge and assistance. At the time of the interview the chauffer was wearing bloodied white gloves and still holding the bloody knife. It was murder most foul. With premeditation, the burly six foot two chauffer had brutally killed his four foot eleven, 58-year-old employer in her own living room. 

The maids were released after questioning, a warrant was issued, and the chauffer “disappeared.” He’s not been found and the case is, in effect, closed. As Ms. Chua says, “The policemen in the Philippines, all poor ethnic Filipinos themselves, are notoriously unmotivated in these cases.” [iv] 

Ms. Chua found her family’s reaction more shocking than the murder. They were matter-of-fact, almost indifferent. It turns out that Aunt Leona’s murder fits a common pattern. 

“Hundreds of Chinese in the Philippines are kidnapped every year, almost invariably by ethnic Filipinos.” The Chinese community hired more guards and upgraded their security systems. 

Why are the Chinese targeted? As one grinning policeman explained, “Because they have more money?” [v] At 1% of the population, they control 60% of the private economy. The motive the police listed was one word, “Revenge.” 

With that comment, I’ll skip past this murder, which is but a pinprick in a larger pattern of global violence. As Ms. Chua says: “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 market dominant minorities.” [vi] 

The book is divided into three parts: Economics, Politics, and “Why it matters to the West.” 

Economics 

The richness of this section is outstanding. In region after region (though not everywhere) the result of democracy and free markets has been to consolidate wealth in the hands of a privileged minority, usually an ethnic minority, as with the Chinese in the Philippines and Southeast Asia. 

In Latin America there is resentment about “white” wealth – interestingly those in this category may have black skins. In Russia, the billionaires are Jewish, while in Africa it is the “Ibo of Cameroon,” also known as the “Jews of Nigeria.” In East Africa, it’s the Indians, while in West Africa it’s the Lebanese. The Mid East, especially Palestine, fits the pattern. 

Ms. Chua works her way around the world: her research is detailed and compelling. She finds market-dominant minorities virtually everywhere. Who are hated by the masses around them. 

One key point is that the United States of America is “everywhere perceived as the world’s market-dominant minority, wielding outrageously disproportionate economic power relative to our size and numbers.”[vii]  We’re credited (or blamed) for sponsoring globalization, and hated for it by many. Hence the terrorist acts of 9/11. 

We don’t think that way, of course. Most people in the U.S. are supportive of people becoming wealthy. That’s the America Dream. We believe at our core this is a good thing, that anyone who prepares themselves and works hard can better their situation. 

Few Americans curse Bill Gates for his wealth (perhaps for other things, but not for being wealthy). Most are envious and motivated by his successes. Indeed “poor and lower-middle-class are often capitalism’s biggest fans.” [viii] 

The American Dream is unique, and, indeed, it may even be eroding here as we watch high wage jobs being exported and intellectual property law being massively shifted from enabling the new to protecting the old.[ix] In any case, “outside the West, in countries with widespread poverty and a market-dominant minority, the dream of upward mobility is largely a nonstarter.” [x] 

If large-scale entrepreneurship is rare, crony capitalism and cartels are not. The book argues this dark side of capitalism, especially when combined with practices such as sweatshops and plundering natural resources, leads to resentment, hopelessness, and rage. When a minority can be blamed, the mix is explosive. 

Violence (“The Political Consequences”) 

Ms. Chua argues that globalism as presently practiced, has unleashed a veritable bloodbath all over the world. “In America we read about acts of mass slaughter and savagery; at first in faraway places, now coming closer and closer to home. We do not understand what connects these acts. Nor do we understand the role we have played in bringing them about.” [xi] 

Recent years have seen genocides unparalleled since Hitler’s Nazi Germany. In a period of some 90 days, in Rwanda, ordinary Hutus killed some eight hundred thousand Tutsis, typically by hacking them to death with machetes. Patients hacked their doctors, students their teachers.  

In Sierra Leone there was a decade of violence that killed some 75,000 and left 4.5 million displaced. Rebels gave farmers a choice: they could either rape their own daughters or have both hands cut off. Much the same happened in Kenya, Indonesia, South Africa, Namibia, and Rhodesia (now Zimbabwe), etc. 

Many describe the violence directed at Zimbabwe’s white farmers and their black farmhands as “anarchy.” If so, it was an anarchy born of democracy. Mugabe was a hero of Zimbabwe’s national movement, elected overwhelmingly in the closely monitored elections of 1980 and every election since. [xii] His platform was to seize land from the “white exploiters.” 

Serbia was worse. There the genocide spread to neighboring countries engulfing the entire region in civil war and ethnic cleansing. It’s important to note that  Milosevic was duly elected – in fact, reelected even after being put on trial as an international war criminal. 

Ms. Chua argues that laissez-faire markets and rapid democratization would be a very high-risk strategy for the Middle East. She sees it as a recipe for extremist politics, dominated by ethno nationalist or fundamentalist parties unified in their hatred of Israel and the West. Iraq may test this thesis. 

Ethno Nationalism and the West

Ms. Chua notes that the export of free markets and democracy has repeatedly not led to peace and prosperity, but instead to ethnic or bureaucratic confiscation, authoritarian backlash, and mass killing. Should we just give this up as failed policy? She says, “No.” 

I’m skeptical. Until quite recently, we had national sovereignty in trade matters, high tariffs, strong unions, and intellectual property and antitrust law set to protect new things. We had high wage jobs and economic prosperity without global carnage and hatred. We had more freedom to pursue the American Dream. Perhaps a public debate on economic and trade policy is needed. 

This part of the book presents speculative adjustments to improve current policy: all reasonable, most compassionate, and none likely to be adopted. Still she has some good points. The best of which is that we’ve forgotten our own history. 

For twenty years, we’ve been promoting instantaneous democratization and Wild West capitalism. “In doing so, we are asking developing and post-Communist countries to embrace a process that no Western nation ever went through.” It’s a good point. 

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