Bryan Caplan  

Reflections on World on Fire

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Negative reviews of Amy Chua's Battle Hymn of the Tiger Mother often begin by praising her earlier book, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.  I was inspired to read it - and found the book so hypnotic I finished it in a day.

Chua's thesis is that there is a major tension between capitalism and democracy - especially in the multi-ethnic developing world.  Most less-developed countries have relatively prosperous commerce-oriented minorities; Chua calls them "market-dominant minorities."  The Jews in Russia, overseas Chinese in Southeast Asia, Indians in East Africa, Lebanese in West Africa, and Latin Americans of European descent all qualify.  The impoverished majorities of these countries have long resented their market-dominant minorities. 

Given these initial conditions, both free-market reforms and democratization have negative side effects. 

The negative side effect of free-market reforms: The market-dominant minorities disproportionately benefit, increasing popular resentment.  The negative side effect of democratization: Market-dominant minorities disproportionately suffer, because the majority finally gets a chance to legally enforce its resentment.  Pushing both reforms on developing countries simultaneously - which Chua claims the U.S. government habitually does - gives the worst of both worlds: Increasing resentment - and the opportunity to politically act upon it.  If the stars align badly enough, preaching democratic capitalism gives you Yugoslavia or Rwanda.  

Before I critique Chua's thesis, let me begin with some praise.  World on Fire is a great example of what I call "behavioral political economy."  Her model of politics begins with psychologically plausible assumptions like "Unsuccessful majorities resent economically successful minorities," and "Politicians can win power by satisfying this resentment in ways that make the majority even poorer."  She takes anti-market and especially anti-foreign bias very seriously.  Scientifically speaking, this is light-years ahead of hundreds of obtuse rational voter models.  Even if Chua were completely wrong, she'd still be pointing social scientists in the right direction.

Still, despite many thought-provoking insights, I see two glaring problems with World on Fire.

1. The book actually inspires me to stand up and defend democracy.  Sure, a civilized traditional dictator is better than a genocidal median voter.  But empirically, dictatorships have murdered vastly more people than democracies.  Communist China, the USSR, and Nazi Germany top the list for the 20th century.  The standard runner-ups include Imperial Japan, Cambodia under the Khmer Rouge, Turkey (the Armenian genocide), Pakistan's attempt to hold onto Bangladesh, and Communist regimes in Vietnam, Poland, and Yugoslavia.  While you might argue that a few of these regimes had some democratic elements, none approached free elections based on universal suffrage.

On reflection, dictatorships' bloodthirstiness is no coincidence.  Dictatorships have high variance; if the men at the top happen to want blood, they get it.  Democracy, in contrast, systematically produces moderation.  That's the essence of the median voter theorem.  Even if almost everyone resents a market-dominant minority to some degree, politicians don't win by advocating genocide.  Politicians win by advocating a policy that half the electorate thinks is too harsh and half thinks is too soft.

In theory, of course, resentment could be so intense that even "moderates" favor mass murder.  Chua apparently believes that this is frequently so:
In a frightening number of cases, democratization in the face of a market-dominant minority has led to government-encouraged attempts to "cleanse" the country of the minority altogether.  Strategies for doing so include forced emigration, expulsions, and in the worst cases pogroms, extermination, and genocide... Almost always, such policies are passionately supported by an aroused and angry "indigenous" majority, motivated by tremendous feelings of grievance and inferiority.
But how does she know what the majority actually favors?  As far as I've heard, no country on the verge of genocide has ever run a scientific survey to measure popular support for it.  And even if there were such a survey, people in a country poised on mass murder are extremely likely to engage in preference falsification - to feign support for horrors they inwardly oppose.  Chua blithely assumes the worst about median voters around the globe based on little more than anecdotes and introspection.

Even worse, there is strong indirect evidence that her anecdotes and introspection are unreliable. 

a. Notice how she refers to "government-encouraged" cleansing, not government-enforced cleansing.  Why the distinction?  Because she doesn't offer any examples where clearly democratic governments actually engage in mass murder.  The worst democracies do, rather, is impotently twiddle their thumbs in the face of ethnic riots.  But if the median voter affirmatively wanted genocide, democratically elected governments wouldn't merely "encourage" private violence; they would establish, fund, and staff killing fields and death camps.  Democracies virtually never do this. 

b. The mere fact that democratic governments fail to suppress riots hardly shows that the median voter wants riots.  A more plausible story is that the median voter opposes riots, but - like the typical American during the Rodney King riots - is too squeamish to back the harsh police measures necessary to crush them.

c. Governments engaged in mass murder almost always conceal it from their own populations.  Even the Holocaust wasn't publicized.  The men who ran it operated under orders of strict secrecy.  The most plausible explanation is that even the Nazis realized that they were vastly more murderous than the median German.  

d. If Chua were right about the savagery of the median voter, the fact that democracies almost never fight each other would be completely mysterious.  After all, if the median voter were eager to exterminate the scapegoat within, you'd expect him to occasionally vote to exterminate the scapegoat without as well. 
   
2. World on Fire fails to appreciate how wonderfully free-market reforms seem to work.  Brookings' Chandy and Gertz lay out the basic facts for 2005-2010.  GDP in the Third World is exploding:
The economies of the developing world have expanded 50 percent in real terms, despite the Great Recession. Moreover, growth has been particularly high in countries with large numbers of poor people. India and China, of course, but also Bangladesh, Tanzania, Ethiopia, Vietnam, Uganda, Mozambique and Uzbekistan - nine countries that were collectively home to nearly two-thirds of the world's poor in 2005 - are all experiencing phenomenal economic advances.
Nor is there any reason to believe Chua's repeated claim that market-dominant minorities scoop up most of the gains.  Global poverty is plummeting, too.*  Chandy and Gertz:
We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010. Looking ahead to 2015, extreme poverty could fall to under 600 million people--less than half the number regularly cited in describing the number of poor people in the world today. Poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time.
Now you could admit the reality of massive progress, but deny free-market reforms the credit.  But this course is not open to Chua.  Throughout World on Fire, she freely gives market reforms the credit for enriching market-dominant minorities - and the blame for failing to spread these riches more widely.  Now that the developing world has prospered for eight additional years under these very policies, it seems time for her to change her tune.  There's still plenty of room for further progress, but the global move toward democracy and capitalism is working out amazingly well.

* For 2005-2010, Chandy and Gertz admittedly assume constant income distributions.  But their results are consistent with poverty research based on micro-level data.



COMMENTS (18 to date)
Annonymous writes:

Aristotle observed long ago that democracies exacerbate internal conflicts. Democracy works
best in homogeneous societies having little internal conflict to begin with.

Gian writes:

Prime example of a elected government engaged in government-enforced genocide and ethnic cleansing:

Pakistan in 1947-48 killed half a million Hindus from West Punjab and Sindh and expelled ten million more.

The pattern continued upto 1950 in East Bengal. India and Pakistan were close to war in 1950 over killings of Hindus in East Bengal (that war averted in 50 came in 1971)

Carl Jakobsson writes:

d. If Chua were right about the savagery of the median voter, the fact that democracies almost never fight each other would be completely mysterious. After all, if the median voter were eager to exterminate the scapegoat within, you'd expect him to occasionally vote to exterminate the scapegoat without as well.

Not at all, since there is a huge difference - for democratic (nationalistic) man - between "us" and "them". "We" in our country decide what to do about "our" rich merchants, but if other countries decide to do something different, that's their thing. I haven't read Chua's work, but from what you've written, she doesn't seem to claim that one takes the same types of action toward other peoples governments than to ones own.

Nor is there any reason to believe Chua's repeated claim that market-dominant minorities scoop up most of the gains. Global poverty is plummeting, too. ...For 2005-2010, Chandy and Gertz admittedly assume constant income distributions.

Wasn't her claim that the busy ethnic entrepreneurial class, become more rich than the average person? The fact that everybody's income rises does not invalidate her claim.


In my view, it seems reasonable that a democracy can let the angry mob loose once in a while. If they would stamp down on it, maybe they wouldn't be reelected. No outspoken policy, proposal or sentiment for this is even necessary, since "everybody knows" deep down that the filthy rich folks (who are not one of "us") have had it coming for a long time. Of course, it seems like something that doesn't occur after the average standard of living has risen substantialy - it's more difficult to get angry at someone who has a nicer car than you, then when someone has a car and you don't.

8 writes:

Should you compare multiethnic societies ruled by dictators against democratic multiethnic societies?

Czechoslovakia, Yugoslavia, Albania, Sudan, Indonesia have all voted/fought to separate along ethnic lines.

fundamentalist writes:

I read Chua's book when it first came out and thought that it was very good. But what she fails to recognize is that the successful minorities in dictatorships achieve much of their success through corruption.

I'm not blaming them. It's the only way to succeed. Those minorities would not invest in those countries without some kind of protection of their properties. They can't achieve that through the law, so they must resort to bribery of officials. And they must keep business ownership in the family because they can trust only family members. This structure prevents the benefits from spreading to the large population.

Things would not be much different in a corrupt democracy without the rule of law.

But in a democracy with some limits on what the majority can do, and institutions that protect property rights, the benefits of development are more evenly spread through all parts of society.

RAD writes:

A relatively recent example of ethnic violence targeting a market-dominant minority:

http://news.bbc.co.uk/2/hi/asia-pacific/4930994.stm

My personal take-aways from this case are:

1) All Solomon Islanders will be negatively impacted by this event for many years/generations

2) Its odd that this potential "canary in a coal mine" type story did not get any media play.

Steve Sailer writes:

Why are you so sure that Chua's warnings haven't been heeded in much of the world? Much of Latin America has followed Hugo Chavez's attacks on market dominant minorities (moderately and effectively in Brazil). Turkey has seen economic power flow from Istanbul insiders to Anatolians. Russia has seen a reallocation of power from Yeltsin's favored insiders to Putin's.

Les Cargill writes:

I did not read Chua as generalizing for or against democracy. I read her as saying there are edge conditions in which democracy can produce the raw materials that are necessary for there to be eliminationist politics. These are not sufficient.

In her BookTV, she specifically refers to a relative so murdered by a domestic servant.

What is interesting about Chua's book is that it's a perceived-wealthy ethnic minority that becomes the object of eliminationism.

There's no point in defending democracy*. It either works or it doesn't.

*unless you're in uniform...

Mr. Econotarian writes:

The question is "what is the alternative"? If we don't "export" democracy & capitalism, are we to "export" dictatorship & socialism?

Of course another alternative is not to "export" anything at all, but to try to lead by example in political and economic freedom, and let the world learn by example.

Elvin writes:

Chua is right: democracy can allow an aggrieved majority to abscond wealth from the prosperous minorities or, in the worst case, cleanse them. Democracy by itself has some logical issues (it's cyclical, someone's a dictator, etc.), but more important, it has to be combined with other guarantees of liberty and human rights: rule of law, right of petition, peaceful assembly, property right, right to exit, among others.

I prefer our politicians focus on promoting human rights and rule of law over democracy, at least for nascent states. I'd rather live in a country that protected my property rights, right to criticize (even if limited), and right to leave over one that allowed me to vote, but gave me no other protections. This is why a lot of immigrants come to America: for our basic human rights, not just to vote.

Getting the transition from authoritarianism or totalitarianism it very difficult. The South Koreans and Chileans have done it. The Iraqis are struggling with it. The more tyrannical the regime, it seems the more difficult the transition. The first step (as shown by South Korea and Chile) is probably to establish some prosperity without being too authoritarian. Having homogeneous societies helps a lot.


Steve Sailer writes:

Chua is from the Overseas Chinese with roots in Fujian Province. Her grandparents got rich in the Philippines.

The Overseas Chinese in Southeast Asia tend to befriend native dictators and cut the rulers' family members in on deals. The overthrow of the Suharto regime in Indonesia in 1998 was accompanied by massacres of Chinese by native rioters and a big Chinese outflow to Chinese-ruled Singapore.

johnleemk writes:

As an overseas Chinese with roots in Fujian (my father is a Chinese Malaysian, my mother is a Filipino with some Fujian Chinese ancestry) I have somewhat first-hand experience with what Chua speaks of. To be sure, there is resentment and violence towards economically dominant minorities in the region. I am not opposed to affirmative action for the ethnic majority in Malaysia; it's not ideal but I think some form of redress is necessary for disadvantaged groups. Not being Filipino by nationality I don't know what the best solution is for them. In both countries obviously it would be very ideal to liberalise the economy and grow it; post facto redistribution may not be ideal efficiency-wise, but it would at least ameliorate the sentiment Chua seems to be talking about.

I'm sure there are exceptions to Bryan's point about democracies and genocide. But I don't think they prove his general observation wrong; it seems to me that dictators commit genocide far more often than democratic governments. Thailand and the Philippines had their fair share of anti-Chinese violence but the government did not sponsor it the way Suharto's dictatorship did in Indonesia.

Skepticus writes:

I've not read Chua's "World on Fire...", but found this review and comments very interesting. It seems to me that while we recognize the problems with a democracy (who cannot identify with the tyranny of the majority?) we should also keep in mind our founding fathers recognized this hazard and created a republic form of government. The intention was to form a government that, among other things, protected us from each other and protected us from the government itself. To often we think our form of government is a democracy, when if fact it is not. Perhaps I should read Chua's book.

Skepticus

dcpi writes:

Chua seems to be making an argument that runs parallel to the worries of the founding fathers. Remember, those who wrote the U.S. Constitution were concerned over a possible "tyanny of the majority." That is why the U.S. is structured as a republic rather than a pure democracy. It is further a federal union of states and not a centralized government for a similar reason.

An interesting question today is how far can the U.S. move from those protections and still protect its unpopular minorities from the predations of the majorities?

More broadly, this question is fundemental in all societies.

In response to the question above of what we should export: perhaps the answer is basic rights -- freedom of association, strong property rights, freedom of speech and to publish, freedom of movement and right to contract -- with strong checks and balances on central authority and periodic elections as a means of accountability of those in positions of public authority. Too many people think of U.S.-style democracy being just elections without the checks and balances.

fundamentalist writes:

Steve Sailer, yes the Chinese embrace dictators because none of those nations has anything close to the rule of law to protect their property. They have three choices: 1) get out or 2) bribe dictators and other powerful people to protect their property or 3) lose their property to people in power.

N. Joseph Potts writes:

I reviewed this book eight years ago on mises.org.

Not having read, much less written, The Myth of the Rational Voter, I might gently be said to have been working under something of a handicap.

But, like the present reviewer, I did come to a highly positive conclusion, qualified in a few ways that, as it happens, neither coincide with nor contradict the qualifications in the present review.

Now, I wonder about Tiger Mother.

Ironist writes:

I am surprised that no one has cited Thomas Sowell's work on economics and minorities. Relevant titles include Race & Culture; Preferential Policies; Affirmative Action Around the World; and Markets & Minorities, among others. Briefly, Dr. Sowell posits that some ethnic groups/minorities specialize in aspects of trade that make them more successful than the majority culture and frequent targets of discrimination. There are many examples of this sort of economic differentiation, including Sri Lanka, Malaysia, and East Africa. In the case of Zimbabwe, I suppose whites constituted the successful minority (yes, and previous oppressors), the expulsion of whom impoverished the country.

Ed writes:

I wouldn't quote Rummel on point 1. He has gone utterly mad recently, as his blog shows. I found that he bent over backwards to blame things on governments that were done with no official order. Some of the regimes you've mentioned have killings ascribed to them that were done by soldiers on their own accord rather than following orders: for example, the Japanese army's atrocities in China were never ordered by the Emperor or his ministers, and many of the killings ascribed to Poland were done by ordinary Poles getting revenge on the Germans.

The sad truth is that "ordinary people" can be just as evil as governments.

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