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World On Fire: a Discussion with Amy Chua Watch Video Connection Speed: High Speed Low Speed Audio    Event Title : World On Fire: a Discussion with Amy Chua Date : 3/25/2004 Duration : 84 minutes Language  : English Country/Region : World Keyword :  Globalization  Trade  Poverty Presenter : Amy  Chua Gobind Nankani | Related Material | Recommendations |Related B-SPAN Videos |  DESCRIPTION  There is a consensus that free markets and democracy, working hand in hand, can transform the world into a community of modernized, productive, and peace loving nations. In her new book, Yale Law School professor Amy Chua investigated how democracy and free markets, in an increasingly globalized world, may in fact contribute to an increase is ethnic violence, resistance to capitalism, and anti-Americanism. During this event, Chua explained her view that the answers to many of the past decade’s events lie in the relationship or collision of markets, democracy, and ethnic hatred. Her central thesis suggests that markets and democracy, in their current form, may not be mutually reinforcing in the developing world and in non-Western countries they could be on a collision course. Chua explained that this situation is largely due to the phenomenon of what she calls “market-dominant minorities.” According to Chua, these market-dominant minorities, while largely absent is Western countries, often dominate the economies of developing countries. She then noted that groups can be market-dominant for many different reasons including established social networks or the remnants of colonial systems and should not be thought of in terms of vague ethnic stereotypes. Afterward, Chua described how this phenomenon has a number of implications for development policy. She noted that when these circumstances exist, markets and democracy favor particular ethnic groups. Markets magnify the wealth of the market-dominant minority, while democracy increases the political power of the impoverished, indigenous majority. As a result, the rich are often viewed as members of an outsider ethnic group. In regards to free market democracy, she said that it often does not follow the same course as it has in the United States. Instead, a process of ethno-nationalism occurs, pitting the poor indigenous majority against the wealthy outsiders (both the wealthy nationals and their foreign investors). She then described the case of Indonesia where a small Chinese minority controlled the national economy. When democratic reforms where enacted several years ago, an ethnic backlash occurred against both the Chinese and markets. The free and fair elections actually gave rise to ethnic “scapegoating” by demagogic politicians who rather than detailing rational economic policies, called for the confiscation of Chinese assets and creation of a “people’s economy” that would return wealth to the majority. As a result, many Chinese fled the country taking their capital with them and plunging Indonesia into an economic crisis. Throughout her book, Chua argues that whenever such instances of free market democracy are pursued in the presence of a market-dominant minority, the invariable result is backlash. She then described how the backlash usually takes on one of three forms: confiscation or nationalization of assets, a backlash against democracy by forces favorable to the market-dominant minority, or majority-supported violence aimed at killing off the hated minority (ethnic cleansing). Chua then focused on the role of the US. She stated that at the world level, the US has come to be viewed as a global market-dominant minority wielding disproportionate economic power relative to its population. She acknowledged that many Americas, while supporting democracy around the world, would not support decisions about US financial or foreign policy being made by foreign or world institutions such as the UN. As with market-dominant minorities in developing countries, the US, as a whole, does not trust others to make decisions for it. At the same time, some non-Americans view the US as a small minority of the world’s population that uses its economic power to control the politics and economies of other countries. Despite all of the negative examples, Chua suggests that it would be unwise to stop promoting markets and democracy in developing countries. She said that clearly some form of market-generated growth and foreign investment offers the best hope for developing countries. She then emphasized that there are many forms of free market democracy and that the US has been exporting the wrong version. She said no Western nation has the true liaise faire system that developed countries have been pushing on poorer countries. Additionally, Chua said that democracy has to be more than just access to ballot boxes and must include provisions for minority rights, constitutionalism, and human rights.  RELATED MATERIALS   Amy Chua’s homepage The World Bank and Globalization RELATED B-SPAN EVENTS Globalization (69) Trade (78) Poverty (258) RELATED WORLD BANK LINKS Joseph Stiglitz and Kenneth Rogoff Discuss: Globalization and Its Discontents Kumi Naidoo: Civil Society, Governance, and Globalization