Isegoria

I’ve been meaning to read Amy Chua’s World on Fire for some time. Now Foseti reviews it:

Ms Chua’s argument is that countries in the developing world (with a few exceptions) are characterized by: 1) large indigenous populations that are poor and 2) market-dominant minorities. In many countries a small subset of the population controls the vast majority of the country’s wealth. This small subset — the market-dominant minority — also happens to be a distinct racial or ethnic group.

Most countries in the developed world are not characterized by such a relationship — they do not have a market-dominant minority (rather they have a market-dominant majority).

Ms Chua goes on to argue that this difference between the developing and the developed world implies that the policies that created wealth in the developed world — i.e. free markets and democracy — will not work in the developing world.

Instead, free markets will cause more wealth to accrue to the market-dominant minority. While democracy will empower the disgruntled majority. The result is likely to be ugly and violent.

Chua tries to explain with a hypothetical:

Since the creation of Microsoft, the software industry has produced the largest crop of billionaires and multibillionaires in American history.

Now imagine that all these billionaires were ethnic Chinese, and that Chinese-Americans, although just 2 percent of the population, also controlled Time Warner, General Electric, Chase Manhattan, United Airlines, Exxon Mobil, and the rest of America’s largest corporations and banks, plus Rockefeller Center and two-thirds of the country’s prime real estate.

Then imagine that the roughly 75 percent of the U.S. population who consider themselves “white” were dirt poor, owned no land, and, as a group, had experienced no upward mobility as far back as anyone can remember. If you can picture this, you will have approximated the core social dynamic that characterizes much of the non-Western world.

Foseti notes a couple of glaring flaws and wonders if Chua was too politically correct to address the truth:

She is incredibly observant with respect to racial and ethnic differences, yet she fails to notice that the same racial and ethnic groups keep rising to the top regardless of where they are. Is this really an accident? For example, the Chinese are dominant in virtually every southeast Asian economy. China itself — and the other northeast Asian countries — don’t have market-dominating minorities. Isn’t the obvious conclusion that the Chinese are smarter? Jews seem to rise to the top everywhere as well. Ms Chua not only doesn’t draw the obvious conclusion. She rejects it in one sentence.
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Ms Chua is also unfortunately pro-democracy. In reading her book, the reader is confronted by lots of violence that springs from democratic movements. It should not be a stretch to conclude that such a system simply will not work in the presence of “diversity” and free markets. Ms Chua refrains from considering any alternatives — as if such a thought is verboten.

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