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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Understanding U.S. Myopia

Your book is beautifully written, very clear. Speaking as a political scientist, and you being an attorney, both of our professions are into jargon, and there's none of that in this book. I was reminded of the Hans Christian Andersen story, The Emperor's New Clothes, the young boy saying "The emperor has no clothes." This leads me into this question: Why was this brilliant but simple argument not more obvious before you laid it out? Why have we -- and especially the United States -- failed to comprehend that the very good that we're trying to do is such a volatile mix? Why are we so bad at seeing what you're talking about?

It's two things: First of all, the topic of ethnic minorities economically controlling sectors feels taboo to people in the West. There just seems to be something wrong to talk about that.

It's not PC.

It's not PC, so we steer away from it. Lots of times I'll read about the same groups I write about and the discussion is just in class terms. There's a "disproportionate income inequality," but there's no mention that it's the Chinese that control it all. But the more I think about this issue, the deeper reason is this: most people in the United States, including academics, tend to assume that markets and democracy must naturally go together, that they're mutually reinforcing. It makes sense if you look at our own society. Sometimes people in the United States talk about free market democracy like it's one thing. And it's very important to note that our social ethnic structure is totally different. We don't have a market-dominant minority. For that reason, we have a strong ethic of upward mobility.

My thesis is not just about inequality, because in the United States we have a lot of inequality. You know, there have been periods in recent history where Bill Gates has owned as much as 40 percent of the rest of the American population. But Americans don't hate Bill Gates; they want him to be able to make money.

The reason for this is exactly what I was talking about. Our rich people are not an ethnic minority. A poor person in Tennessee or Arkansas can say, "I'm not wealthy, but maybe my son or my daughter can grow up to be Bill Gates, or Bill Clinton." That's absolutely not true in countries like Zimbabwe, or Burma, or Indonesia, or Bolivia, where the majority of the people look around and they say, "Everybody who's rich belongs to a different ethnic group."

And as a thought experiment -- this is how I start my book -- I say, "Imagine if Bill Gates and the ten wealthiest people in the United States were all ... " just pick a minority -- they were all Arab, or they were all Chinese -- "and picture at the same time that the [ethnic] majority lived in entrenched poverty and experienced no upward mobility for generations." That's the dynamic that you have in most of the developing world. I think it's really hard for people in the West, particularly Americans, to imagine a system so different from ours, because we feel like everybody can make it. It's a very strong ... I don't know if it's a dream or a myth, but it's partly substantiated that anybody can make it in this country. There are enough success stories for that to be believed. That's the reason that there's this assumption that free markets and democracy go together all the time.

Our own founding fathers were very aware that markets and democracy might not go together. That's why we didn't have universal suffrage [at first]. If you go back and look at the Federalist Papers and the debates around the time -- Adam Smith and David Riccardo, all the people that we admire -- Thomas Jefferson -- all debating these things, and they were all saying, "We'd better not let the poor vote right now, because they don't own property, and they're just going to vote to confiscate the wealth of the rich." So we, actually, had property exclusions. We disenfranchised lots of groups. That's another part of the picture. We forget our own history.

In fact, we built a governmental structure that emphasizes checks and balances.

Right. We have very complicated checks and balances, separation of powers. Democracy in the United States, or anywhere in the West, is not just overnight majority rule. It's about a lot of other things, for better or for worse.

You talk about the emphasis on doing things rather quickly; that is, bringing markets to underdeveloped places and having a timetable that says, "Let's do it with a big bang." And the same with democracy. How do you account for that? Is it that we often want to get out rather quickly? That seems to be the case in Iraq, that we don't want to give the time for evolution, it's not on the agenda. That is the key to all of this history you were just talking about.

I think that's right. It goes back to the fall of the Berlin Wall and the death of communism. The former Soviet Union collapses, and it seemed clear to a lot of people that communism is dead. We don't want a dictatorship, so the only thing left is free market democracy. So in that feeling of euphoria, right after 1989, the idea was to bring markets and democracy as fast as we could to everybody, because obviously that's the right thing. People didn't pay attention to the tension between them, and again, as you say, democracy and markets is the way we did it in the West.

On the market side, it was just absurd. Dropping -- practically airlifting! -- stock exchanges into Mozambique and Tanzania, and Xeroxing our foreign investment laws, and privatizing everything, very naively ... I mean, I'm actually an optimist, because I think we did things so badly during that stage that now in the law, in political science, people are saying, "Along with bringing privatization and free markets, we need to have anti-fraud laws. We need anti-insider trading legislation." None of that was thought about in the initial phases of the free market euphoria.

On the democracy side, I think it's much tougher. I do think there was the same kind of naiveté, which is, let's just have elections. That brought Slobodan Milosevic to power. It brought Hugo Chavez to power in Venezuela; there were free and fair elections, for better or for worse. I think part of it was naiveté, which is, "elections have got to be good; majority rule; we need universal suffrage."

Part of it is the other thing you mentioned. When it gets tough then, often we find ourselves taking things back. We find ourselves backpedaling. We tell people to have elections, and then we suddenly realize who might be elected, and then there's a lot of backpedaling and stalling that, sadly, leads to more resentment against the United States, because then you get charges of hypocrisy and self-interest. And there may be some of that; it depends on the case. But in the United States, we're so isolated. There's a tendency and arrogance to assume that other countries are just like us, so let's prescribe what worked for us.

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