Amy Chua Interview: Conversations with History; Institute of International Studies, UC Berkeley

The Myths of Globalization: Markets, Democracy and Ethnic Hatred: Conversation with Amy Chua, Professor of Law, Yale, and author, *World on Fire*; January 22, 2004, by Harry Kreisler
Photo by Jane Scherr

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Origins of an Idea

What years were you practicing [international] law?

I graduated from law school in 1987, clerked for a year, so around 1989 to 1994 I was on Wall Street. It was right after the fall of the Berlin Wall, so [everyone was emphasizing] markets and privatization as the answer to everything ...

And globalization?

Absolutely, but the "up" side of it. It was all, "Let's put in stock exchanges around the world, and foreign investment should go everywhere." I worked -- luckily, a fabulous experience -- I spent most of those four years working on the privatization of TelMex, which is Teléfono de Mexico. It was Mexico's national telephone company, which at that time was government-owned. My law firm privatized it, selling it, in part, to Southwestern Bell, and in part to some very wealthy Mexican interests.

What did you learn from that work? Were you surprised by the things that you ran into, not so much the law, but rather the context within Mexico in which this privatization was happening?

Lots of things surprised me. I was young and it was very exciting and glamorous. My firm happened to represent the government of Mexico, which is unusual. Our clients, the people I dealt with, were the Finance Minister and the wealthy businesspeople. On the many trips I made to Mexico, I did notice the unspoken ethnic angle. Often when people talk about Latin America or Mexico, they say, "Look, we don't have the same kinds of ethnic divisions or racial divisions that you have in the United States because everybody here is mixed. We're all Mexicans. There are no ethnic divisions." But one thing I noticed was that all the people I worked with, the finance ministers, certainly all the bankers and the businesspeople, were white, at least by U.S. standards -- they were taller, Spanish-blooded, very Europeanized, spoke many languages, many were educated abroad, very elegant. And the majority of the people ... I mean most of the people doing the copying, and the Xeroxing, and the mopping, were very clearly more indigenous-blooded. They were visibly shorter, darker -- and so that was filed away [in my mind].

Another thing I noticed is that it was a very euphoric moment. I remember writing documents: "Privatizing is going to lift the masses out of poverty. With the proceeds, we're going to build hospitals and schools; it's a win-win situation." After I left Wall Street and following what happened, following the newspapers, then I noticed that privatization isn't a panacea.

I'm ultimately a fan of privatization. I believe that it was a positive thing for the Mexican economy. But the beneficiaries of privatization, at least that one, were ... This was the Salinas [presidential] administration; there was a lot of corruption, and the beneficiaries were much, much more limited than I initially optimistically imagined. In fact, the papers just a few years later said, "Privatization was touted as the solution to poverty. Instead, it's made thirteen families into multimillionaires and billionaires." So I think it's a much more complicated story.

What in your background sensitized you to see what you were seeing? Not everybody in your shoes would have reached these conclusions necessarily. Some might. You've already told us you majored in development studies and economics at Harvard, so that must have played a role.

Right. Well, for better or for worse, I think I've always been a little bit too conscious of ethnic divisions. My own family, my parents, grew up in the Philippines, and they are, as I mentioned, ethnic Chinese. The Chinese in the Philippines are a tiny minority. They represent about 1 percent of the population, but they control about 60 percent of the private economy, including the four major airlines and virtually all the major banks and conglomerates. So, first of all, it's a taboo topic. It sounds like it can't be true, a minority controlling 60 percent of the economy, but it is true. It's well documented. And anybody who works in business and has done work in Southeast Asia sees this, not just in the Philippines but in Indonesia, Malaysia, Thailand, Burma. So I was sensitized to the ethnic dimensions of capitalism.

I didn't grow up in the Philippines, but we visited very often and it's a strange thing for somebody growing up in the United States. I went back when I was one, and then when I was eight, and then many times afterwards. My father's family had a huge hacienda in an all-Chinese community, and living in the basement were fifteen or twenty servants, all ethnic Filipino. And that's very typical. They were wealthy, but not among the wealthiest Chinese. That's a pattern.

So I was ... I think you're right, I never quite thought about it that way, but I think that I was sensitized to noticing when the people who are wealthy in that country aren't just wealthy, but also may have ethnically distinguishing characteristics. I noticed the parallels: "Oh, the wealthy people here look different." It's certainly not just biological; I don't even know how much of it is. Part of it is the clothing, the foreign education, the polished manners. But there is an ethnic dimension to it. Certainly, many of the families [of the Mexican ruling class] were from old Spanish families that never intermarry now these days with the poor indigenous populations. The Spanish colonizers did freely mix with and rape the indigenous populations. I noticed the big differences.

In the Philippines, it's the Chinese, the Spanish-elite, and then it's the huge, roughly 80 million indigenous Filipino majority. And there are very stark differences. In Latin America, it is much more of a spectrum. It is different; the skin color, it's not black and white, but I noticed the parallels as well.

Now we're going to talk about your new book, which I will show, called World on Fire, which has been very well received, recommended by The New York Times and The Economist. Before we talk about the book itself, there's a personal story that was very important for you, that led you to focus on the problem, relating to your aunt. Tell us that story.

Okay. In 1994, I had just started teaching in North Carolina. I received a call from my mother in Berkeley. She told me that my aunt, my father's twin sister, had been murdered in her home in the Philippines, in Manila. She'd been killed by her chauffeur. Obviously, this was a terrible family time for us. We were very close to my aunt. She was my father's twin.

My aunt, as I mentioned, was a member of the Philippines' extremely entrepreneurial 1 percent Chinese minority, and her chauffeur was a member of the indigenous Filipino majority. Everybody was upset, but I, in particular, was very upset by the criminal investigation, because we went back and I asked if there had been any developments in the murder, and my uncle said, "No, the case has been closed. The suspect ... " And, actually, it wasn't even ... You know, the maids ... There were two maids who were also complicit -- they confessed. There was no doubt as to who had done the killing. But the police said the suspect had disappeared, the maids were let go, the case was closed.

I asked my uncle, "How can this possibly be?" And he said, "You're so naïve. This is the Philippines; not the United States." It turns out he wasn't just being cynical. It's true. My aunt's killing was part of a much larger pattern in the Philippines. Hundreds of ethnic Chinese are kidnapped annually, not always killed, but kidnapped all the time. The police force and the military are principally Filipino. In fact, they all are; there are no Chinese. They are sympathetic [to anti-Chinese sentiment], and often they're quoted in the papers as saying, "Look, the Chinese can afford the ransom. It's a form of redistribution." I'm not saying they condoned the murder, but they're sympathetic to the frustration of this very large majority in the face of a tiny, outsider minority that controls so much wealth and has all these servants, and seem very arrogant. The Chinese don't intermarry. They speak a different language.

I decided to open the book with that story because I looked at the police report, because I was so upset about the case being closed. The most striking thing was in a section for motive; I expected it say robbery or something, because jewels were taken. But instead, there was just one word, and that was "revenge." That startled me and got me thinking. In a way, that idea has been an organizing motif for the book. I wanted to be very balanced. It's not blaming one side or the other, but trying to see the picture from either the point of view of the person who killed my aunt, without ever condoning it -- I mean, we're filled with anger still, but at least seeing what his perspective was -- and then seeing it from the side of what I call market-dominant minority, this ethnic minority that does so well in a country economically.

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