• Amy Chua: World on Fire; Doubleday; 2003; 294pp.; $14 (paperback)
RALEIGH—The list of complaints against laissez-faire capitalism is very long, including such contradictory notions as that it is guilty of impoverishing the masses and that it enables the poor to escape from their “proper” station in life. In her book World on Fire, Amy Chua adds to the list, arguing that capitalism, when combined with democratization in economically developing nations, has the terrible effect of producing violence. The reason for the violence is that “market-dominant” minorities will amass wealth far in excess of that of the majority population group or groups and thereby unleash resentment against their success. The result, she writes, can be “catastrophic.”
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 whether Chua makes her case, and if so, what conclusions logically follow.
Chua, who is 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 has the indigenous population generally. Tragically, that wealth disparity has been seized upon by demagogues who are 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 the phenomenon of majority hatred directed against “outsiders” who, by virtue of their superior business acumen, become conspicuously wealthy.
The author’s contention is that envy-driven 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 of changes, she says, 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, but free-market opponents will say that nations should keep democracy and forget about capitalism to avoid the violence that inequality brings.
I do not find Chua’s thesis convincing and certainly do not agree that the way to avoid outbreaks of racially driven violence against those who prosper the most under capitalism is to maintain socialism.
First, her supporting examples do not really provide much support for her contention that the combination of laissez-faire economic policy and political liberalization are such an incendiary mix. That is because the world is virtually bereft of instances of significant reforms in both directions. Chua continually writes about nations that have adopted “free-market democracy,” but the cases she cites involve no more than small steps in those directions, especially toward capitalism. For instance, she notes the ethnic violence in Zimbabwe, but that pitiable nation remains a state with little freedom of any kind.
Second, it is easy to find instances of the sort of violence against the economically successful occurring without either of Chua’s two conditions being met. She cites Jews in Russia as a case in support of her argument, and while it’s true that Russia has moved somewhat in the direction of political and economic freedom over the last decade or so, there was a great deal of violence against Jews by majority Russians for centuries under the autocratic rule of the Czars.
A third difficulty with Chua’s thesis is that she attributes ethnic violence to hatred engendered by economic success of a minority group without pausing to consider that the violence may have its roots in simple racism.
Nothing does more to reduce violence and many other social ills than the rising standards of living that capitalism alone makes possible. What a tragedy it would be if nations were to forego the tremendous long-run benefits of capitalism out of fear that there might be violence in the short-run against those who take advantage of business opportunities the earliest.
All that World on Fire proves in the end is that governments cannot be depended upon to prevent violence against people who have been, for whatever reason, demonized by others. That’s nothing new.