Amy Chua, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (New York: Doubleday, 2002)

            Amy Chua paints a dark picture of the volatile forces that can be unleashed when three forces, commonly thought of as unalloyed goods, combine—economic free markets, political democracy, and ethnic identities.

           When we look at the world, says Chua, what we observe in many countries are what she calls “market-dominant minorities.”  These ethnic minorities often command and control hugely disproportionate sectors of their country’s wealth by exploiting, sometimes legally and sometimes illegally, free markets.  Traveling in Manila some time back, for example, I remember a snide comment about the Chinese there as “the Jews of Asia.”  The domination of ethnic majorities by market-dominant minorities comes at a huge price, according to Chua.  One of three things typically results.

            First, there can be a backlash against the very idea of free markets by those who feel they have been exploited.  In Zimbabwe, for example, the democratically-elected Robert Mugabe openly encouraged the violent takeover of white-owned farms.  In Venezuela, free elections brought the anti-market Hugo Chavez to power.    Second, in order to protect their market dominance, the powerful ethnic minority will sometimes jettison democracy in favor of some form of autocracy.  Third, horrific violence can be unleashed by the ethnic majority against the dominant minority, as happened in Rwanda in 1994 when the Hutus (about 85% of the country) slaughtered 800,000 Tutsis who controlled the country.

            Contrary to popular views here in the West, the globalization of free markets and the rise of free elections can have disastrous effects.  In Iraq, only time will tell what violent powers the United States has unleashed among Kurds, Shias, and Sunnis.  According to Chua, countries must establish free and stable political economies before they embark upon political democracies.  Some Americans might not like to admit it, but the volatile cocktail of free markets, free elections and intense ethnic identity can cause more harm than good. There might be some places where this threefold combination simply won’t work, or will only work with more patience and nuance than many in the west have exhibited.