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May 16, 2004
Review: Recipe for instability
WRITTEN by a Filipino-American, the book under review is about how free market democracy exported by the US to the developing world creates a market dominant alien minority that breeds ethnic hatred between locals and outsiders and creates global instability.
World on Fire lays bare “the conflict between laissez faire and unrestricted majority rule that may have catastrophic consequences”. So the author argues that free market must come first and democracy later. She sees that “the best hope for democratic capitalism in the non-western world lies with the market-dominant minorities themselves”.
Democracy can be inimical to the interests of the market-dominated “outsider” minority. Market dominant minorities do not really want democracy, at least not in the sense of having their fate determined by genuine majority rule.
When entrepreneurial but politically vulnerable minorities like the Chinese in Southeast Asia, the Indians in East Africa and the Jews in Russia call for democracy, they principally have in mind constitutionally guaranteed human rights and property protection for the minorities. In calling for democracy, the outside groups are seeking protection against the “tyranny of the majority”. Democracy is tempered by an overriding concern for the stability of property rights and the status quo.
Throughout the world, global markets are bitterly perceived as reinforcing American wealth and dominance. At the same time, the global populist and democratic movements give strength, legitimacy and voice to the impoverished, frustrated and excluded masses of the world. Markets concentrate enormous wealth in the hands of an “outsider” minority, fermenting an ethnic envy and hatred among the chronically poor majorities.
When free market democracy is pursued in the presence of a market-dominated minority, there is a backlash. Zimbabwe is one example. President Robert Mugabe has encouraged the seizure of 10 million acres of white-owned farmland. As one Zimbabwean puts it, “The lands belong to us. The foreigners should not own our lands here. There is no black Zimbabwean who owns land in England. Why should any European own land here.”
The author is of the view that western critics of globalization have overlooked the ethnic dimension of market disparities. They tend to see wealth and poverty in terms of class conflict, not ethnic conflict. The author concedes that more attention should be paid to the enormous wealth disparities created by global markets. But just as it is dangerous to view markets as the panacea for world poverty and strife, it is also dangerous to see democracy as a panacea. In short-term, however, both are a part of the problem.
Free markets have led to rapid accumulation of massive, often shocking, wealth by the members of outside non-indigenous ethnic minority. Today’s global economy represents the triumph of five decades of American foreign policy. The disturbing reality is that the global markets, even if marginally “lifting all boats”, have consistently intensified the extraordinary economic dominance of certain “outsider” minorities, fueling virulent ethnic envy and hatred among the impoverished majorities around them.
The people of the world hate the Americans because they have become today the world’s market dominant minority. The US is seen as the engine and the principal beneficiary of global marketization. American global armed forces keep the markets and the sea lines open for globalization. Incidentally, the American edition of the book was published three months before the US military attack on Iraq.
In countries with a market-dominated minority and a poor indigenous majority, the forces of democratization and marketization directly collide. As markets enrich the market-dominant minority, democratization increases the political voice and power of the majority. As the popular hatred of the rich outsiders mounts, the result is an ethnically charged political pressure cooker in which some form of backlash is almost unavoidable.
Written from the perspective of the Americans, the book fails to fully comprehend the realities in the developing states. Third World countries like Pakistan need to develop markets with social controls within national frontiers that combine with restrictive international trade practices. This calls for the exercise of the democratic and national sovereign rights in the conduct of global affairs. Majority rule is a must for the social and economic progress of a nation. It is through democracy that conflicting interests are reconciled and all voices are heard including that of the poor. In fact democracy is today about the common man’s right to rule through representatives and exercise his sovereign right to improve his livelihood step by step and day by day.
World on Fire
By Amy Chua
Arrow Books. Available with Paramount Books, 152/O, Block 2, PECH Society, Karachi-75400. Tel: 021-4310030.
Email: paramount@cyber.net.pk
ISBN 0-09-945504-8
346pp. Rs325
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