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.

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6 responses to “Amy Chua: World on Fire

  1. Scott says :

    After reading further into Chua’s book, I do have one overriding criticism. Her thesis suffers from a bias and a distortion for the fact that it omits to mention (or at least, very rarely mentions) the violence — psychological and physical — of “market-dominant minorities” against subjugated and subordinated majorities. In most of her examples, it is always the terror of exploited majorities “scape-goating” (as she puts it), the minority power elites. Eh? In fact, she never uses the term “tyranny” to describe the “success” of market-dominant minorities at all, although she provides some examples (only occasionally mentioning that many of these “market-dominant minorities” were economically “successful” because of rapine, theft, violence, pillage, and crime).

    Significant short-coming, I think.

  2. xraymike79 says :

    An article from the other day goes into a bit of detail how the neoliberal economic implementations have created such a gaping social divide in Bahrain:
    “Bahrain: The Social Roots of Revolt Against Another US Ally”
    http://hamsayeh.net/society/371-bahrain-the-social-roots-of-revolt-against-another-us-ally.html

    Up to 20 per cent of Bahrain’s total land area has been reclaimed from the sea over the past three decades.

    However, this vast reclamation and development drive has, according to local environmental groups, devastated the island’s marine ecology and fish stocks in particular. The rampant development – which has made fortunes for the country’s elite – has had an equally devastating effect on local communities who have depended on the sea for their livelihoods. While these communities have suffered the blight of unemployment and poverty, they also have witnessed roaring property development, land prices and profits benefiting the ruling elite.

    “These communities have watched their country’s oil wealth being directed to serve elite interests with development plans that are geared to lure international capital. This has led to swathes of coastal areas being confiscated by members of the extended Al Khalifa royal family, to be earmarked for future reclamation and skyscraper development. That is how Bahrain has become something of a paradox – an island without any beaches. And it is this lopsided, elite-orientated development that is fuelling deep social grievances among the masses, grievances that are now being directed at those elites. Further state repression against such protests can only amplify these grievances.”

    • Scott says :

      Thanks, xray. Helpful article, although there’s no mention of one of the main greivances reported in other articles: a Sunni “market-dominant minority” not just subjugating a Shia majority, but apparently actively trying to eliminate that majority by importing more Sunnis. If so, it’s a case which Chua’s thesis doesn’t really cover effectively — the case where a minority attempts to eliminate a majority as a majority.

      “Bahrain is the only country in the Gulf region to have signed a free trade agreement with the US”. Interesting, although probably connected with the fact that Bahrain provides a home for the US Gulf fleet. Another case, though, where neo-liberal assumptions about “free trade” lifting all boats fall flat, given the gross disparity in wealth.

      On the other hand, neo-liberals might point to these instabilities, uprisings, and insurrections as being proof of the democratising effect of neo-liberal policy, rather than perverse outcome and unintended consequence. That might be just retrospective rationalisation, though.

  3. Scott says :

    I stated I had some reservations about Chua’s thesis going further in to it. In fact, the further I go into it the more I detect a double-standard somewhere, although I’m unable to completely sniff it out, as yet.

    First of all, Chua further along seems to forget her own preliminary thesis that the kind of “laissez-faire”, lawless (ie unregulated) capitalism being foisted on non-Western nations was, as she acknowledges, “abandoned long ago” in the West itself. With good reason. It was blatant piracy and pillage. It caused the same sort of social and political turmoil and upheavals that it does presently in the countries Chua examines. Yet she seems to start making excuses for it. Perhaps because her own very rich Chinese aunt in the Philippines was murdered by her (badly maltreated, it seems) Filipino servants, this seems to colour her approach to the “vengeful”, “resentful”, “envious”, dispossessed “indigenous” majorities in those countries ravaged by crony capitalism and whose obscenely wealthy “market-dominant minorities” often came by their wealth not by hard work and civic-minded values but through confiscation, expropriation, and exploitation?

    In fact, Chua does mention that imperialism and colonialism were in most cases the source for the disparity between the wealth of the market-dominant minority and impoverished and destitute majority — the ‘wretched of the earth’. But that seems to be also forgotten in her seeming primary identification with the wealthy, concerned as she is that minority wealth not also be confiscated or expropriated (through nationalisation, say).

    Case in point — one that (so far) doesn’t appear in her book (although she does briefly address the Spanish rape and pillage of South America — but not the total genocide of the Caribe Indians in a few years — 12 to 15 million souls, by witness Bartoleme de las Casas’ estimates). The initial surplus capital and wealth of European-descended North Americans was not even principally acquired by hard work or cultural values, but by confiscation, expropriation, and dispossession of the “indigenous majority” of their lands, in some cases accompanied by outright extermination of entire peoples (a policy that was only discontinued around 1986, actually, with the final closure of “Indian Residential Schools” — which were really cultural extermination camps). And so far, in any case, she hasn’t even mentioned the massacre of an estimated 1 million “communists” by Suharno (backed by Western advisers and financial organisations) in Indonesia in 1965 – 66 (see John Perkins’ book Confessions of an Economic Hit Man for details or visit JohnPerkins.org. In fact, his new book (which I just discovered) Hoodwinked puts it this way,

    The real cause of our global financial meltdown is what Perkins calls predatory capitalism – the mutant form of an economic system that encourages widespread exploitation of the few to benefit a small number of already very wealthy people. A new geo-politics has emerged; today the CEOs of big corporations, rather than governments, control human and natural resources around the globe, as well as politicians and the media. Their arrogance, gluttony, and mismanagement have brought us to the perilous edge. The solutions will not be “return to normal ones”

    Might be interesting to

  4. Scott says :

    By the way… don’t want to be seen as dis-ing Chua’s book completely. It has some merit. However, given her own background — from a wealthy “market-dominant minority” in the Philippines, as a Wall Street lawyer and a former World Bank official — I’m not surprised that her perspective is somewhat tinted by her personal history and class position.

    I have also provided a link in the side-bar to John Perkins’ website. Perkins is somewhat my “ideal” of what we might call a “post-modern revolutionary”, a man who (like the late Chalmers Johnson) has witnessed the inner workings of the Imperium, repudiated it, exposed it, and now works for a “shift in consciousness” as the solution for it (see, for example, his essay “The Global Message of Egypt”. His attack on “predatory capitalism” and the “corporatocracy” is less muted and softball than Chua’s, who it seems can only bring herself to describe neo-liberalism in neutral terms as “laissez-faire” capitalism. And, unlike Perkins, Chua often overlooks, understates, or downplays the interlinkages between “market-dominant minorities” and the broader global corporatocracy — a serious shortcoming, in my view.

  5. xraymike79 says :

    Getting back to a prior comment here:
    https://longsworde.wordpress.com/2011/02/19/amy-chua-world-on-fire/#comment-754

    Genocide by population dislocation. A current example is China’s policy of inundating Tibet with an external population:
    http://www.vinaylal.com/ESSAYS(GP)/china5.pdf
    “China plans to use the railway to transport Chinese migrants directly into the heart of. Tibet in order to overwhelm the Tibetan population and tighten its stranglehold over our people.”

    3-6-2010
    Chinese policy of Cultural Genocide continues apace in Tibet …
    http://www.tibetcustom.com/article.php/20100306210019115

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