Amy Chua: World on Fire
The continuing remarkable developments in North Africa and the Middle East sent me back to my bookshelves to dig out a critical book about neo-liberalism that I purchased some time ago but never read — Amy Chua’s World on Fire. If you want some context for the upheavals presently occurring there and elsewhere, Chua’s critical assessment of globalisation provides (with a few reservations on my part) an excellent backgrounder.
Juan Cole at Informed Comment has already linked much of the present turbulence to the blowback effects resulting from the imposition of neo-liberal policies on non-Western nations. This policy misleadingly goes under the name “free trade”, whereas it is actually forced trade, (as Canadian sociologist Peter Urmetzer pointed out in his own book From Free Trade to Forced Trade: Canada in the Global Economy). Like the phrase “science-based” in reference to genetic engineering, “free trade” is also designed to confound perception and to obscure motives and disguise the instruments of compulsion and coercion. “Free trade” itself is not free.
Chua criticises, quite compellingly, what she calls the “naive” view of globalisation (such as that espoused by Thomas Friedman of the New York Times in The Lexus and the Olive Tree) that “a rising tide lifts all boats”. Far from it. She notes that what she calls “market-dominant minorities” (often “outsider” or non-indigenous minorities) are actually greatly empowered, initially, by neo-liberal policies at the expense of dispossessed and disenfranchised majorities. (The same is happening in the Western nations, of course, but that doesn’t seem to figure in Chua’s overall critique). Although she describes these “market-dominant minorities” in terms of ethnicity (such as the very wealthy and powerful Chinese minorities in Southeast Asia, or in Indonesia, the Philippines, or Malaysia), ethnicity can be more broadly defined as “a greatly extended form of kinship,” emphasising the importance of “subjective perceptions” (those things implicated in what I’ve referred to as ethnocentrism being a form of narcissism). Ethnicity could be racial, geographic, linguistic, religious, or tribal. In other terms, though, a “market-dominant minority” can just as well be described as an economic elite.
I will quote a few important passages from the initial pages of Amy Chua’s book,
“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.” (p. 6).
Here, however, I have my first criticism. Although it is worthwhile to highlight the tension and social crisis that erupts between wealthy ethnic elites and the dispossessed “indigenous” in some countries (the breakup of Yugoslavia is cited) resulting from the imposition of neo-liberal policies, the characterisation of “market-dominant minorities” in terms of ethnicity is somewhat too narrowly focussed, valid in some circumstances though it may well be. Chua avoids the issue of “class”, but certainly “class” is one overall aspect of this.
What Chua wants to highlight, though, is the contradiction of simultaneously promoting “free market economics” and “democratization”. The former further empowers the elite market-dominant minority (often an “outsider” minority), while the latter empowers those in the majority (often an “indigenous” majority) who are in a subordinate political and social position to the market-dominant minority (what C. Wright Mills called “the power elite“). This sets up conditions for a social conflict, the pattern of which we are seeing today in the Middle East and North Africa, as well as in the confused and waffling rhetoric emanating from Western capitals which has, on the one hand, forged strong economic and market alliances with the power elites in those countries (for pragmatic ends of “stability”) while also promoting greater democratic reform (as a matter of principle). This contradiction emerges as a rhetorical tension between pragmatism and principle and is reflected in double-talk, because “free markets” and “democracy” are not necessarily compatible nor identical (Chile under Margaret Thatcher’s good friend Augusto Pinochet, for example, and with the guidance of neo-liberal economists from the “Chicago School”, had “free markets” but no democracy. Interesting how the great champion of neo-liberal economics could reconcile herself with that apparent contradiction).
The worldwide spread of markets and democracy is the meaning of ‘globalisation’ (although others have perhaps better described this as “corporate rule”). This worldwide evangelism for free market economics, says Chua, has “at times… bordered on the absurd”. Chua provides an example:
“There was also the time that the US government hired New York-based Burson-Marstellar, the world’s largest public relations firm, to help sell free market capitalism to the people of Kazakhstan. Among other ideas, Burson-Marstellar developed a television soap opera mini-series glorifying privatization. In one episode, two hapless families desperately want a new house but don’t know how to build it. Suddenly, a hot-air balloon descends from the sky, bearing the name ‘Soros Foundation’ in huge letters. Americans spring out, erect the house, and soar away, leaving the awe-struck Kazakhstanis cheering wildly.” (p. 7)
This kind of propaganda is more likely to inspire contempt rather than awe, I suspect.
Chua describes the “naive” evangelical view of globalisation (or perhaps it is more the case of cunning than naivete?),
“The prevailing view among globalization’s supporters is that markets and democracy are a kind of universal prescription for the multiple ills of underdevelopment. Market capitalism is the most efficient economic system the world has known. Democracy is the fairest political system the world has ever known and the one most respectful of individual liberty. Working hand in hand, markets and democracy will gradually transform the world into a community of prosperous, war-shunning nations, and individuals into liberal, civic-minded citizens and consumers. In the process, ethnic hatred, religious zealotry, and other ‘backward’ aspects of underdevelopment will be swept away.”
But in actuality, says Chua, “the sobering thesis of this book is that the global spread of markets and democracy is a principal, aggravating cause of group hatred and ethnic violence throughout the non-Western world [not just the non-Western world]. In the numerous societies around the world that have a market-dominant minority, markets and democracy are not mutually reinforcing. Because markets and democracy benefit different ethnic groups in such societies, the pursuit of free market democracy produces highly unstable and combustible conditions. Markets concentrate enormous wealth in the hands of an ‘outsider’ minority, fomenting ethnic envy and hatred among often chronically poor majorities. In absolute terms the majority may or may not be better off — a dispute that much of the globalization debate fixates on — but any sense of impoverishment is overwhelmed by their continuing poverty and the hated minority’s extraordinary economic success. More humilitating still, market-dominant minorities, along with their foreign-investor partners [my italics], invariably come to control the crown jewels of the economy, often symbolic of the nation’s patrimony and identity — oil in Russia and Venezuela, diamonds in South Africa, silver and tin in Bolivia, jade, teak, and rubies in Burma.” (pp. 9-10).
And, of course, oil in the Middle East. But just as Thomas Friedman provided a golden age (and Golden Arches) “myth of globalisation” that was counterfactual, so did Francis Fukuyama provide a naive framework mythology of globalisation in his book The End of History and the Last Man.
The key, of course, is this “foreign-investor partners” who are the big promoters of “open markets” to begin with, mainly for predatory purposes.
“Ironically…. for the last twenty years the United States has been promoting throughout the non-Western world, laissez-faire capitalism — a form of markets that the West abandoned long ago.” This process includes “privatization, elimination of state subsidies and controls, and free trade and pro-foreign investment initiatives. As a practical matter, they rarely, if ever, include any substantial redistribution measures. [my italics]” (p. 14).
Not surprisingly. Social justice doesn’t figure large in the self-seeking calculus of neo-liberalism and corporate capitalism. In fact, the promotion of laissez-faire economics abroad, when this form of capitalism was “abandoned long ago” in the West because it is predatory and exploitative — is deliberate imperialistic policy. It’s not surprising that there would be backlash, just as there was in the West. Chua makes the astute point,
“… I will use the term ‘democratization’ to refer to the political reforms actually being promoted and implemented in the non-Western world today. Thus, ‘democratization’ will refer principally to the concerted efforts, heavily U.S.-driven, to implement immediate elections with universal sufferage. Needless to say, an ideal democratic society would surely include more substantive principles, such as equality under law or minority protections, but to build such principles into the definition of democracy would be to confuse aspiration with reality. It is striking to note that at no point in history did any Western nation ever implement laissez-faire capitalism and overnight universal sufferage at the same time — the precise formula of free market democracy currently being pressed on developing countries around the world.” (p. 14).
And which is the precise point of contradiction that is resulting in the “perverse outcome” (in the perspective of Western politicians anyway) of promoting neo-liberal economics with calls for greater “democratization” (but, as Chua points out above, an unsubstantial and deficient form of democratisation).
“In the numerous countries around the world that have pervasive poverty and a market-dominant minority, democracy and markets — at least in the form in which they are currently being promoted — can proceed only in deep tension with each other. In such conditions, the combined pursuit of free markets and democratization has repeatedly catalyzed ethnic conflict in highly predictable ways, with catastrophic consequences, including genocidal violence and the subversion of markets and democracy themselves. This has been the sobering lesson of globalization over the last twenty years…. Contrary to what its proponents assume [or espouse], free markets outside the West do not spread wealth evenly and enrich entire developing societies. Instead, they tend to concentrate glaring wealth in the hands of an ‘outsider’ minority, generating ethnic envy and hatred among frustrated, impoverished majorities.” (p. 16).
That sounds pretty much like the situation in Bahrain, today, especially. It is a serious indictment of neo-liberalism.
Of course, the evangelists and “true believers” for neo-liberalism and free market economics never bother to actually test their theories against their performance in the global reality. As Chua puts it sardonically, that “would be to confuse aspiration with reality”. Touchè. The backlash or blowback here is the result of having confused aspiration (which might include acquisitiveness, avarice, and greed as well) with reality.
All in all, Chua’s book seems a worthwhile read for helping, in part, to comprehend the unfolding events in the Middle East, North Africa, and elsewhere.