World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability

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World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability by Amy Chua Anchor Books/Doubleday * 2002/2004 * 294 pages * $26.00 hardcover/$14.00 paperback

The list of complaints against laissez-faire capitalism is long, including such contradictory notions as its guilt in impoverishing the masses and its role in enabling the poor to escape their "proper" station in life. In World on Fire, Amy Chua adds to the list, arguing that capitalism, when combined with democratization in economically developing nations, produces violence. The reason is that "market-dominant" minorities amass far more wealth than the majority population group does, unleashing resentment against their success.

Understand that Chua is not advocating socialist economic controls. She forthrightly states that "Market capitalism is the most efficient economic system the world has ever known." But her book may be read by opponents of the free market as proving that government policy should be used aggressively to redistribute wealth in order to avoid the kind of violence she describes. For that reason, it is worth examining World on Fire to see if Chua makes her case, and if so, what conclusions logically follow.

Chua, a professor at Yale Law School, begins with a painful personal experience. Her aunt was brutally murdered in the Philippines, a victim of anti-Chinese violence. In the Philippines, as in many other nations, ethnic Chinese have been more economically successful than the indigenous population generally. That wealth disparity has been seized on by demagogues eager to exploit the envy of their less successful countrymen. Consequently, many Filipinos have come to believe that violent "retaliation" against Chinese "exploiters" is justified. Chua points to many examples around the world of majority hatred directed against "outsiders" who, by virtue of their superior business acumen, become conspicuously wealthy.

The author's contention is that eiivydriven violence against "market-dominant" minorities is apt to occur when a nation moves from political authoritarianism to democracy at the same time it moves from a centrally planned or highly regulated economy to capitalism. That combination, she maintains, leads to rapid accumulation of wealth for a few, but the breaking of the political restraints that had previously held outbreaks of racist envy in check. How to deal with that problem is a question she leaves unexplored.

I don't find Chua's thesis convincing and certainly do not think that the way to avoid outbreaks of racially driven violence against those who prosper the most under capitalism is to maintain socialism.

First, her examples do not provide much support for her contention that the combination of laissez-faire economic policy and political liberalization is an incendiary mix. …