Cover image for World on fire : how exporting free market democracy breeds ethnic hatred and global instability
World on fire : how exporting free market democracy breeds ethnic hatred and global instability
Chua, Amy.
Personal Author:
First edition.
Publication Information:
New York : Doubleday, [2003]

Physical Description:
ix, 340 pages ; 25 cm
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HF1359 .C524 2003 Adult Non-Fiction Non-Fiction Area
HF1359 .C524 2003 Adult Non-Fiction Central Closed Stacks

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Every few years, a book is published about America's role in the world and the changing contest of global affairs that gets everyone thinking in a new way. Amy Chua'sWORLD ON FIREwill have exactly that kind of impact on the debate of how the world has changed in light of the events of last September. Apostles of globalization, such as Thomas Friedman, believe that exporting free markets and democracy to other countries will increase peace and prosperity throughout the developing world; Amy Chua is the anti-Thomas Friedman. Her book wil be a dash of cold water in the face of globalists, techno-utopians, and liberal triumphalists as she shows that just the opposite has happened: When global markets open, ethnic conflict worsens and politics turns ugly and violent. Drawing on examples from around the world--from Africa and Asia to Russia and Latin America--Chua examines how free markets do not spread wealth evenly throughout the whole of these societies. Instead they produce a new class of extremely wealthy plutocrats--individuals as rich as nations. Almost always members of a minority group--Chinese in the Philippines, Croatians in the former Yugoslavia, whites in Latin America, Indians in East Africa, Jews in post-communist Russia--these "market-dominant minorities" have become targets of violent hatred. Adding democracy to this volatile mix unleashes supressed ethnic hatreds and brings to power ethnonationalist governments that pursue aggressive policies of confiscation and revenge. Chua further shows how individual countries are often viewed as dominant minorities, explaining the phenomena of ethnic resentment in the Arab-Israeli conflict and the rising tide of anti-American sentiment around the world. This more than anything accounts for the visceral hatred of Americans that has been expressed in recent acts of terrorism. Bold and original,WORLD ON FIREis a perceptive examination of the far-reaching effects of exporting capitalism with democracy and its potentially catastrophic results.

Author Notes

Amy Chua is a professor at Yale Law School and lectures frequently on the effects of gloabalization to government, business, and academic groups around the world. She lives in New Haven, Connecticut. Her title Battle Hymn of the Tiger Mother made The New York Times Best Seller List for 2012.

(Publisher Fact Sheets) Amy Chua was born in Champaign, Illinois in 1962. She received an A.B. in economics from Harvard College in 1984 and a J.D. from Harvard Law School in 1987, where she was an executive editor of the Harvard Law Review. Before becoming a professor at Duke Law School, she was a corporate law associate at Cleary, Gottlieb, Steen and Hamilton. She is currently the John M. Duff Professor of Law at Yale Law School. Her first book, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, was selected by The Economist as one of the best books of 2003. Her other works include Day of Empire: How Hyperpowers Rise to Global Dominance-and Why They Fall and Battle Hymn of the Tiger Mother. In 2014 she had a new book on the New York Times bestseller list, The Triple Package: How Three Unlikely Traits Explain the Rise and Fall of Cultural Groups in America.

(Bowker Author Biography)

Reviews 3

Publisher's Weekly Review

A professor at Yale Law School, Chua eloquently fuses expert analysis with personal recollections to assert that globalization has created a volatile concoction of free markets and democracy that has incited economic devastation, ethnic hatred and genocidal violence throughout the developing world. Chua illustrates the disastrous consequences arising when an accumulation of wealth by "market dominant minorities" combines with an increase of political power by a disenfranchised majority. Chua refutes the "powerful assumption that markets and democracy go hand in hand" by citing specific examples of the turbulent conditions within countries such as Indonesia, Russia, Sierra Leone, Bolivia and in the Middle East. In Indonesia, Chua contends, market liberalization policies favoring wealthy Chinese elites instigated a vicious wave of anti-Chinese violence from the suppressed indigenous majority. Chua describes how "terrified Chinese shop owners huddled behind locked doors while screaming Muslim mobs smashed windows, looted shops and gang-raped over 150 women, almost all of them ethnic Chinese." Chua blames the West for promoting a version of capitalism and democracy that Westerners have never adopted themselves. Western capitalism wisely implemented redistributive mechanisms to offset potential ethnic hostilities, a practice that has not accompanied the political and economic transitions in the developing world. As a result, Chua explains, we will continue to witness violence and bloodshed within the developing nations struggling to adopt the free markets and democratic policies exported by the West. (On sale Dec. 24) (c) Copyright PWxyz, LLC. All rights reserved

Library Journal Review

Globalization is not good for developing countries, insists Yale law professor Chua. It aggravates ethnic tensions by creating a small but abundantly wealthy new class and it's stimulating a new wave of anti-Americanism. (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.

Choice Review

The thesis of this informative book is that the global spread of the market system is a major cause of group hatred and ethnic violence throughout the non-Western world. Chua (Yale Law School) contends that free markets outside the West are characterized by a concentration of immense wealth and power residing in an outsider, nonindigenous minority, e.g., the Chinese in the Philippines and throughout South Asia, the white-skinned in Latin America, and the Indians and Lebanese in Africa. She details, in the context of globalization, the political consequences of these developments, which lead to ethnonationalist antimarket pressures, confiscation of property, instability, and authoritarian backlash. Chua offers policy prescriptions in the final chapters, among which are warnings that the goal of Western-style democracy creates tension with market capitalism, since the ethnic-hating majority (as in Zimbabwe) tends to abjure market systems. Her bleak outlook is accompanied by recommendations that "market dominant minorities" voluntarily eliminate bribery, discriminatory lending practices, and violation of workplace practices. Other remedies include encouraging equity markets to develop, dispersing ownership of capital, corporate philanthropy by Western multinationals, and more foreign aid from wealthy countries. A comprehensive, wise, and well-written book. ^BSumming Up: Highly recommended. Public; academic, lower-division undergraduate through faculty; and professional collections. H. I. Liebling emeritus, Lafayette College



CHAPTER 1Rubies and Rice PaddiesChinese Minority Dominance in Southeast AsiaIn Burma,* tattoos are traditionally used to protect against snakebite. In 1930 and again in 1938, enraged Burmans applied these tattoos to achieve invulnerability against bullets and then proceeded to slaughter Indians in an orgy of violence. Even monks were said to have participated. At the time, Indians, along with British colonialists, were a starkly economically dominant ethnic minority in Burma and the object of mass antipathy. Killing Indians was an act simultaneously of revenge and nationalist pride among a long-downtrodden people. As a contemporary observer put it, "The average Burman on the street felt that at least once he had proved his superiority over the Indian."Today there is only a small community of Indians left in Burma. Hundreds of thousands fled in the sixties, in response to another wave of ethnic violence. But a new market-dominant minority has taken their place, far wealthier than the Indians ever were.Markets, Junta Style, and the Chinese TakeoverBurma has one of the most repugnant military governments in the world--the State Law and Order Restoration Council, or SLORC,** which seized power in September 1988 after gunning down thousands of unarmed demonstrators. SLORC held multiparty elections in 1990, but then refused to honor the landslide victory of 1991 Nobel Peace laureate Aung San Suu Kyi, placing her instead under house arrest and earning the widespread hatred of the Burmese people.From its inception, SLORC has been aggressively pro-market. Reversing three decades of disastrous, socialist central planning, SLORC in 1989 launched "the Burmese way to capitalism." Apart from enriching corrupt SLORC generals, who are all ethnic Burmans, the ensuing decade of marketization brought virtually no benefits to the indigenous population, the vast majority of whom still engage in traditional agriculture. One group, however, has benefited tremendously.Since Burma's shift to a market-oriented, open-door economy, both Rangoon, the modern capital, and Mandalay, the ancient City of Gems and royal seat of the last two Burmese kings, have been taken over by ethnic Chinese. Some of these Chinese are from families that have lived in Burma for generations. Like the Indians but to a lesser extent, the Chinese were disproportionately wealthy during the colonial period (1886-1948), which was characterized by essentially laissez-faire policies superimposed on Burma's traditional rural economy. Although much of their wealth was confiscated during the socialist era (1962-88), the Chinese remained active in Burma's black markets and, in a few cases, opium trafficking.In Burma's new market economy, the Sino-Burmese minority have been transformed almost overnight into a garishly prosperous business community. In addition, tens of thousands of poor but entrepreneurial immigrants from China, sweeping down from nearby Yunnan, have bought up the identity papers of dead Burmans for as little as three hundred dollars, becoming Burmese nationals overnight. Today, ethnic Chinese Burmese--looking uncomfortable in longyis, the traditional Burmese unisex sarongs--own nearly all of Mandalay's shops, hotels, restaurants, and prime commercial and residential real estate. The same is more or less true in Rangoon. Only a tiny, dying handful of Burman-owned establishments (mainly printing houses and cheroot factories) are left, dwarfed by the Chinese-built and Chinese-owned high-rise buildings around them.Typical of Southeast Asia, the Chinese dominate Burmese commerce at every level of society. Massive joint ventures--such as the Shangri-La Hotel deal between Lo Hsing-han, the Sino-Burmese chairman of the Asia World conglomerate, and Sino-Malaysian tycoon Robert Kuok--have turned Mandalay and Rangoon into booming hubs for mainland Chinese and Southeast Asian Chinese business networks. (Non-Burmese Chinese investors are easy to spot. They're the ones not in longyis but in cowboy boots and sunglasses, walking around with bottles of Johnny Walker Red.) At the humbler end of the spectrum, Chinese hawkers make an excellent living selling cheap bicycle tires from China--often more than thirty thousand tires a month--for rickshaws in Burma. Nor is Chinese dominance only an urban phenomenon. After two years of severe flooding in southern China, large numbers of Chinese farmers--over a million, some estimate--poured into northern Burma. These new Burmese "citizens" now grow rice on the cleared hill country they have taken over. Entire Chinese villages have sprung up in this way.With the United States boycotting Burma on human rights grounds, globalization for Burma has had a disproportionately Chinese face, although the presence of French and German foreign investors can be felt as well. "Name a large infrastructure project anywhere in Myanmar these days and there is a strong possibility it will be in the hands of Chinese contractors," observed The Economist a few years ago. "Chinese engineers are working on improvements to the highway from Mandalay to Yangon. Chinese companies are developing the railway line from Mandalay to Myitkyina, near the Chinese border, and the line from Mandalay to the capital. With the help of chain gangs from Myanmar's prisons, they are also building a line from Ye to Tavoy in Myanmar's far south-east. . . . Against international competition, Chinese contractors have won the contract to build a big bridge across the Chindwin river. Other Chinese ventures range from a new international airport for Mandalay to housing for the armed forces and 30 irrigation dams. It was the Chinese, in association with Siemens, who last year installed a ground satellite station serving the capital."The Chinese in Burma dominate not only legitimate trade and business but also more sordid black market activities. Indeed, the line between licit and illicit commercial activity in Burma, as in many developing countries, is often vague. Some of the country's most influential businessmen are former--possibly current--drug kingpins. "Drug traffickers who once spent their days leading mule trains down jungle paths are now leading lights in Burma's new market economy," lamented former U.S. secretary of state Madeline Albright a few years ago.Burma-born, ethnic Chinese tycoon Lo Hsing-han, for example, was an infamous opium warlord in the 1960s, thought to be responsible for much of the heroin that wound up in American veins. According to Burma scholar Bertil Lintner, Lo started off in his native Kokang Province as a lieutenant to the pistol-toting lesbian opium queen, Olive Yang. In 1989, Lo cut a deal with SLORC, persuading fellow ethnic warlords to accept a cease-fire with the junta in exchange for valuable timber and mineral concessions. Today, Lo's "Asia World" commercial empire includes a container shipping business, Rangoon port buildings, and tollbooths on the resurfaced Burma Road. Lo insists that he is now a legitimate businessman. "Since the market economy appeared in Myanmar," he explains, "it is easier to earn money trading vehicles on the Chinese border."6 Whether or not Lo is clean--and most Western officials believe otherwise--Burma's "Chinese underworld" remains as dominant in drug traffic and money laundering as Chinese merchants are in Mandalay's booming, lawful markets.Chinese Plutocrats, Burman MiseryEver since SLORC embraced markets, Burma has been hemorrhaging natural resources, especially teak, jade, and rubies. Apart from SLORC generals, the beneficiaries have been almost exclusively ethnic Chinese and a handful of hill tribe smugglers.Burma's forests hold more than 70 percent of the world's teak. The Burmese teak is a magnificent tree, sometimes reaching 150 feet, with opposing egg-shaped leaves and clusters of white flowers. Its timber is dark, heavy, oily, of unusual strength and durability. Long the wood of Burmese royalty, immortalized by Rudyard Kipling ("Elephints a-pilin' teak / In the sludgy, squdgy creek, / Where the silence 'ung that 'eavy you was 'arf afraid to speak! / On the road to Mandalay . . . "), teak today is America's wood of choice for boat decking and salad bowls.For over a decade now, Burma's hill tribes, particularly the Shan, have been selling enormous quantities of teak to Chinese buyers at fire-sale prices. Technically these sales are contraband, violating SLORC's official monopoly on timber exports. In reality, SLORC generals struck a deal with hill tribe insurgents a decade ago, granting them economic freedom in exchange for a cease-fire. As a result, since 1989, convoys of trucks loaded with teak logs--sometimes over ten feet in diameter, from trees hundreds of years old--travel daily, snaking along the mountainous old Burma Road across the border into China's Yunnan Province.Meanwhile, SLORC's official timber policy has been aggressive globally-oriented marketization under government concessions. Insisting that teak logging will facilitate Burma's economic development, SLORC has invited the full support of the private sector in promoting "forestry" (i.e., deforestation), even exempting forestry exports from commercial tax. Along with European and Chinese foreign investors, most of SLORC's business partners are Sino-Burmese tycoons who have close ties to Thai Chinese logging companies. Leading industrialist "May Flower" Kyaw Win, born to a poor Chinese family in the Northern Shan State, is a prominent example. Since moving into the timber business in 1990, Kyaw Win--also the managing director of Yangon Airlines and often spotted with top-ranking generals--has become one of the wealthiest men in Burma.By contrast, ethnic Burmans have profited almost not at all from the country's market-driven deforestation. Shan tribespeople continue to earn money smuggling teak to Yunnan, but adding insult to injury, the Shan, along with the paid-off Burmese border officials, spend their proceeds almost entirely on coveted consumer goods imported from China and sold by Burmese Chinese. As a result the Chinese end up with both the teak and the money, while the Shan and the Burmans are left with cheap Chinese-made ghetto blasters, Michael Jackson T-shirts, sports shoes, condoms, and beer.In addition to teak, Burma is famous for her gems: pigeon-blood rubies, ultramarine sapphires, and imperial jade. Prior to 1989, under Burmese-style socialist rule, only the state was permitted to engage in gem mining and gem sales. Thus in the 1980s, when a private miner discovered, and then sold on the black market, a raw ruby weighing an incredible 469.5 carats, he was promptly arrested and imprisoned. SLORC recaptured the ruby in 1990 and proudly proclaimed it the property of the state. Christened Na Wa Ta, or the "SLORC ruby," its picture was displayed across the country in the state-owned Working People's Daily. (Around the same time, the government also announced the discovery of two raw sapphires, one weighing 979 carats, the other around 1,300 carats.) During the socialist period, when all industry was nationalized, the Burmese government sold gems to foreign companies by holding annual "gem emporiums." Private gem sales were conducted underground by hundreds of traders operating largely out of Mandalay's 34th and 35th Street black markets.In a watershed pro-market reversal, the Burmese government in the early nineties privatized much of its gem industry. Since 1995, private mining concessions have been sold on the basis of competitive bidding, costing as much as $83,000 per acre for virgin gem mines. Once again, virtually all the concessionaires have been Sino-Burmese businessmen. One Chinese-owned jewelry company reportedly controls 100 gem mines and produces over 2,000 kilograms of raw rubies a year. Lo Hsing-han's visible holdings, valued at an estimated $600 million, include valuable ruby concessions as well as "a mining stake in the northern 'jade rush' town of Phakent--said to harbor a 300-ton jade boulder, buried so deep in the jungle it can't be moved." Lo's Asia World conglomerate is now the most popular partner for foreigners investing in Burma. Along with private mining, SLORC also legalized private gem sales. Today, Burma's gem industry is dominated by thriving Burmese Chinese at every level, from the financiers to the concession operators to the owners of scores of new jewelry shops that sprang up all over Mandalay and Rangoon. Needless to say, SLORC officials are also handsomely paid off at every level.It is an understatement to say that, in terms of financial and human capital, the vast majority of indigenous Burmans, roughly 69 percent of the population, cannot compete with the country's 5 percent Chinese minority. Three-quarters of the Burmans live in extreme rural poverty, typically engaging in paddy production or subsistence farming. Despite land reforms during the socialist era, an estimated 40 percent of Burman peasants are landless. For rural Burmans, saving money is virtually impossible; anything earned is spent just to stay alive. As a result, most Burmans have little or no capital and have not profited from economic liberalization.Lack of financial capital is not the only problem. Since abandoning socialism in 1988, SLORC has slashed real spending on health and education. According to United Nations agencies, nearly 40 percent of Burmese children never enroll in school and up to 75 percent drop out before the fifth grade. Moreover, because of the ruling junta's paranoia about student-led civil unrest, Burma's universities were closed for three-and-a-half years, until July 2000. Human capital levels among indigenous Burmans are thus abysmal. All these factors, along with possible cultural obstacles--some have suggested that there is a native prejudice against "greedy" profit-seeking--make it extremely difficult for Burmans to compete in a market economy.In urban areas, Burmans may actually have suffered from marketization. Most of the native residents of Mandalay were historically artisans, who made their living weaving tapestry, carving gold leaf, crafting furniture, or polishing precious stones. In recent years, low wages in these traditional industries relative to the skyrocketing prices of consumer goods have pushed the standard of living of thousands below subsistence. Meanwhile, since 1989, the price of rice in Mandalay has been rising steadily--at one point, over 1,000 percent in seven years--with no end in sight. For many Burmans, whose average per capita income is only around $300 a year, this translates into something close to starvation.Further, as ethnic Chinese developers in the nineties snapped up all the prime real estate in Mandalay--making fast fortunes as property values doubled and tripled in the chaotic new markets--indigenous Burmese Mandalayans were pushed farther and farther away from their native homes. (In 1990, SLORC had already forcibly relocated dissidents and Mandalayan monks.) Today, thousands of poor, displaced Burmans live in satellite shantytowns on the outskirts of Mandalay, within eyeshot of the gaudy, fenced-off mansions of the SLORC generals, many of whom are openly parasitic on Chinese businessmen.Free markets are supposed to lift all boats, and indeed often do. But this is distinctly not the perception of Burma's roughly 30 million ethnic Burman majority. In their view, markets and economic liberalization have led to the domination and looting of their country by a relative handful of "outsiders," chiefly ethnic Chinese, in symbiotic alliance with SLORC. Mandalay's central business district is now filled with Chinese signs and Chinese music pouring out of Chinese shops. Burmese-made products have been almost entirely displaced by cheaper Chinese imports. Chinese restaurants serving grilled meat and fish overflow with loud Mandarin-speakers. "To go to Mandalay," snaps a character in a local cartoon strip, "you need to master Chinese conversation." When the sun sets, Mandalay's new money heads to Chinese-owned karaoke bars, where young Chinese hostesses sing along to the latest songs from laser discs made in Hong Kong. On weekends, wealthy Chinese relax in the mountaintop resort of Maymyo, where they have bought up as vacation homes the grand Victorian houses left behind by British colonialists. Excerpted from World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability by Amy Chua All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Table of Contents

Introduction: Globalization and Ethnic Hatredp. 1
Part 1 The Economic Impact of Globalization
1 Rubies and Rice Paddies: Chinese Minority Dominance in Southeast Asiap. 23
2 Llama Fetuses, Latifundia, and La Blue Chip Numero Uno: "White" Wealth in Latin Americap. 49
3 The Seventh Oligarch: The Jewish Billionaires of Post-Communist Russiap. 77
4 The "Ibo of Cameroon": Market-Dominant Minorities in Africap. 95
Part 2 The Political Consequences of Globalization
5 Backlash against Markets: Ethnically Targeted Seizures and Nationalizationsp. 127
6 Backlash against Democracy: Crony Capitalism and Minority Rulep. 147
7 Backlash against Market-Dominant Minorities: Expulsions and Genocidep. 163
8 Mixing Blood: Assimilation, Globalization, and the Case of Thailandp. 177
Part 3 Ethnonationalism and the West
9 The Underside of Western Free Market Democracy: From Jim Crow to the Holocaustp. 189
10 The Middle Eastern Cauldron: Israeli Jews as a Regional Market-Dominant Minorityp. 211
11 Why They Hate Us: America as a Global Market-Dominant Minorityp. 229
12 The Future of Free Market Democracyp. 259
Notesp. 289
Indexp. 329