World on Fire World on Fire World on Fire Read online

  Contents

  Title Page

  Dedication

  Acknowledgments

  Introduction: Globalization and Ethnic Hatred

  PART ONE

  The Economic Impact of Globalization

  1 Rubies and Rice Paddies

  Chinese Minority Dominance in Southeast Asia

  2 Llama Fetuses, Latifundia, and La Blue Chip Numero Uno

  “White” Wealth in Latin America

  3 The Seventh Oligarch

  The Jewish Billionaires of Post-Communist Russia

  4 The “Ibo of Cameroon”

  Market-Dominant Minorities in Africa

  PART TWO

  The Political Consequences of Globalization

  5 Backlash against Markets

  Ethnically Targeted Seizures and Nationalizations

  6 Backlash against Democracy

  Crony Capitalism and Minority Rule

  7 Backlash against Market-Dominant Minorities

  Expulsions and Genocide

  8 Mixing Blood

  Assimilation, Globalization, and the Case of Thailand

  PART THREE

  Ethnonationalism and the West

  9 The Underside of Western Free Market Democracy

  From Jim Crow to the Holocaust

  10 The Middle Eastern Cauldron

  Israeli Jews as a Regional Market-Dominant Minority

  11 Why They Hate Us

  America as a Global Market-Dominant Minority

  12 The Future of Free Market Democracy

  Afterword

  Notes

  Index

  About the Author

  Acclaim for Amy Chua’s WORLD ON FIRE

  Copyright Page

  To my mother and father

  Acknowledgments

  I am grateful to many people for their contributions to this book, but my greatest debt by far is to my husband Jed Rubenfeld, who for a decade has read every word I’ve written. I am the fortunate beneficiary of his kindness and genius.

  I am also deeply grateful to a number of friends and professional colleagues. Strobe Talbott and Russell Pittman both read earlier drafts of the manuscript in its entirety and gave me tremendously helpful criticisms and suggestions. Others who provided invaluable comments on particular chapters include Bruce Ackerman, Yochai Benkler, Owen Fiss, Or Gozani, Jonathan Hecht, Donald Horowitz, Martin Michael, Elchi Nowrojee, Jeff Powell, George Priest, Susan Rose-Ackerman, Jennifer Roth-Gordon, David Steinberg, Alan Tan, and especially Amalia Anaya, Gonzalo Mendieta, and Jorge Patiño, who tried valiantly to correct my North American misconceptions. Errors, of course, are mine alone.

  Many research assistants devoted dozens, in some cases hundreds, of hours to this book. In particular, I would like to thank Ivana Cingel, Alana Hoffman, David Penna, Rory Phimester, Lara Slachta, Brent Wible, and especially Jason Choy, who amazed me with his dedication and willingness to help at all hours. The following former students also provided extremely helpful assistance and often local expertise: Migai Akech, Homayoon Arfazadah, Hubert Baylon, Jennifer Becker, Jennifer Behr, Ikenna Emehelu, Jeff Federman, Ben Hance, Lidia Kidane, Nimrod Kozlovski, Bianca Locsin, Toni Moore, Gonzalo Zegarra Mulanovich, Christina Owens, Caio Mario da Silva Pereira Neto, Tom Perriello, Emily Pierce, Uzi Rosha, Damian Schaible, Bill Scheffer, Daniel Sheridan, Saema Somalya, Suchon Tuly, Anders Walker, Kanchana Wang, and Tammy Zavaliyenko.

  Many individuals were interviewed for this book, and I am thankful to them for their time and frankness. In most cases I have changed their names and other identifying factors to protect their anonymity.

  This book is based on three earlier academic articles of mine: “The Paradox of Free Market Democracy: Rethinking Development Policy,” Harvard International Law Journal 41 (2000): 287–379, “Markets, Democracy, and Ethnicity: Toward a New Paradigm for Law and Development,” Yale Law Journal 108 (1998): 1–107, and “The Privatization-Nationalization Cycle: The Link Between Markets and Ethnicity in Developing Countries,” Columbia Law Review 95 (1995): 223–303. I could not have written those articles without the friendship, support, and generosity of Dean Pamela Gann and Dean Katharine Bartlett of the Duke Law School and Dean Anthony Kronman of the Yale Law School.

  Gene Coakley of the Yale Law School Library awed me with his energy and resourcefulness and has my great admiration and gratitude. I would also like to thank Miriam Abramowitz, Nicole Dewey, Frances Hamacher, and Patricia Spiegelhalter for their assistance and encouragement.

  My love and thanks to Sophia and Louisa Chua-Rubenfeld for their patience and insights and for being my antidotes to despair.

  Finally, I am deeply indebted to my agents Glen Hartley and Lynn Chu for believing in this project and to my brilliant editor, Adam Bellow.

  INTRODUCTION

  Globalization

  and Ethnic Hatred

  One beautiful blue morning in September 1994, I received a call from my mother in California. In a hushed voice, she told me that my Aunt Leona, my father’s twin sister, had been murdered in her home in the Philippines, her throat slit by her chauffeur. My mother broke the news to me in our native Hokkien Chinese dialect. But “murder” she said in English, as if to wall off the act from the family, through language.

  The murder of a relative is horrible for anyone, anywhere. My father’s grief was impenetrable; to this day, he has not broken his silence on the subject. For the rest of the family, though, there was an added element of disgrace. For the Chinese, luck is a moral attribute, and a lucky person would never be murdered. Like having a birth defect, or marrying a Filipino, being murdered is shameful.

  My three younger sisters and I were very fond of my Aunt Leona, who was petite and quirky and had never married. Like many wealthy Filipino Chinese, she had all kinds of bank accounts in Honolulu, San Francisco, and Chicago. She visited us in the United States regularly. She and my father—Leona and Leon—were close, as only twins can be. Having no children of her own, she doted on her nieces and showered us with trinkets. As we grew older the trinkets became treasures. On my tenth birthday she gave me ten small diamonds, wrapped up in toilet paper. My aunt loved diamonds and bought them up by the dozen, concealing them in empty Elizabeth Arden face moisturizer jars, some right on her bathroom shelf. She liked accumulating things. When we ate at McDonald’s, she stuffed her Gucci purse with free ketchups.

  According to the police report, my Aunt Leona, “a 58 year old single woman,” was killed in her living room with “a butcher’s knife” at approximately 8:00 P.M. on September 12, 1994. Two of her maids were questioned and confessed that Nilo Abique, my aunt’s chauffeur, had planned and executed the murder with their knowledge and assistance. “A few hours before the actual killing, respondent was seen sharpening the knife allegedly used in the crime.” After the killing, “respondent joined the two witnesses and told them that their employer was dead. At that time, he was wearing a pair of bloodied white gloves and was still holding a knife, also with traces of blood.” But Abique, the report went on to say, had “disappeared,” with the warrant for his arrest outstanding. The two maids were released.

  Meanwhile, my relatives arranged a private funeral for my aunt, in the prestigious Chinese cemetery in Manila where many of my ancestors are buried in a great, white marble family tomb. According to the feng shui monks who were consulted, because of the violent nature of her death, my aunt could not be buried with the rest of the family, else more bad luck would strike her surviving kin. So she was placed in her own smaller vault, next to—but not touching—the main family tomb.

  After the funeral, I asked one of my uncles whether there had been any further developments in the murder
investigation. He replied tersely that the killer had not been found. His wife explained that the Manila police had essentially closed the case.

  I could not understand my relatives’ matter-of-fact, almost indifferent attitude. Why were they not more shocked that my aunt had been killed in cold blood, by people who worked for her, lived with her, saw her every day? Why were they not outraged that the maids had been released? When I pressed my uncle, he was short with me. “That’s the way things are here,” he said. “This is the Philippines—not America.”

  My uncle was not simply being callous. As it turns out, my aunt’s death is part of a common pattern. Hundreds of Chinese in the Philippines are kidnapped every year, almost invariably by ethnic Filipinos. Many victims, often children, are brutally murdered, even after ransom is paid. Other Chinese, like my aunt, are killed without a kidnapping, usually in connection with a robbery. Nor is it unusual that my aunt’s killer was never apprehended. The policemen in the Philippines, all poor ethnic Filipinos themselves, are notoriously unmotivated in these cases. When asked by a Western journalist why it is so frequently the Chinese who are targeted, one grinning Filipino policeman explained that it was because “they have more money.”1

  My family is part of the Philippines’ tiny but entrepreneurial, economically powerful Chinese minority. Just 1 percent of the population, Chinese Filipinos control as much as 60 percent of the private economy, including the country’s four major airlines and almost all of the country’s banks, hotels, shopping malls, and major conglomerates.2 My own family in Manila runs a plastics conglomerate. Unlike taipans Lucio Tan, Henry Sy, or John Gokongwei, my relatives are only “third-tier” Chinese tycoons. Still, they own swaths of prime real estate and several vacation homes. They also have safe deposit boxes full of gold bars, each one roughly the size of a Snickers bar, but strangely heavy. I myself have such a bar: My Aunt Leona Federal Expressed it to me as a law school graduation present a few years before she died.

  Since my aunt’s murder, one childhood memory keeps haunting me. I was eight, staying at my family’s splendid hacienda-style house in Manila. It was before dawn, still dark. Wide awake, I decided to get a drink from the kitchen. I must have gone down an extra flight of stairs, because I literally stumbled onto six male bodies.

  I had found the male servants’ quarters. My family’s houseboys, gardeners, and chauffeurs—I sometimes imagine that Nilo Abique was among those men—were sleeping on mats on a dirt floor. The place stank of sweat and urine. I was horrified.

  Later that day I mentioned the incident to my Aunt Leona, who laughed affectionately and explained that the servants—there were perhaps twenty living on the premises, all ethnic Filipinos—were fortunate to be working for our family. If not for their positions, they would be living among rats and open sewers without even a roof over their heads.

  A Filipino maid then walked in; I remember that she had a bowl of food for my aunt’s Pekingese. My aunt took the bowl but kept talking as if the maid were not there. The Filipinos, she continued—in Chinese, but plainly not caring whether the maid understood or not—were lazy and unintelligent and didn’t really want to do much else. If they didn’t like working for us, they were free to leave any time. After all, my aunt said, they were employees, not slaves.

  Nearly two-thirds of the roughly 80 million ethnic Filipinos in the Philippines live on less than two dollars a day. Forty percent spend their entire lives in temporary shelters. Seventy percent of all rural Filipinos own no land. Almost a third have no access to sanitation.3

  But that’s not the worst of it. Poverty alone never is. Poverty by itself does not make people kill. To poverty must be added indignity, hopelessness, and grievance.

  In the Philippines, millions of Filipinos work for Chinese; almost no Chinese work for Filipinos. The Chinese dominate industry and commerce at every level of society. Global markets intensify this dominance: When foreign investors do business in the Philippines, they deal almost exclusively with Chinese. Apart from a handful of corrupt politicians and a few aristocratic Spanish mestizo families, all of the Philippines’ billionaires are of Chinese descent. By contrast, all menial jobs in the Philippines are filled by Filipinos. All peasants are Filipinos. All domestic servants and squatters are Filipinos. In Manila, thousands of ethnic Filipinos used to live on or around the Payatas garbage dump: a twelve-block-wide mountain of fermenting refuse known as the Promised Land. By scavenging through rotting food and dead animal carcasses, the squatters were able to eke out a living. In July 2000, as a result of accumulating methane gas, the garbage mountain imploded and collapsed, smothering over a hundred people, including many young children.

  When I asked an uncle about the Payatas explosion, he responded with annoyance. “Why does everyone want to talk about that? It’s the worst thing for foreign investment.” I wasn’t surprised. My relatives live literally walled off from the Filipino masses, in a posh, all-Chinese residential enclave, on streets named Harvard, Yale, Stanford, and Princeton. The entry points are guarded by armed, private security forces.

  Each time I think of Nilo Abique—he was close to six feet and my aunt was four-feet-eleven-inches tall—I find myself welling up with a hatred and revulsion so intense it is actually consoling. But over time I have also had glimpses of how the Chinese must look to the vast majority of Filipinos, to someone like Abique: as exploiters, as foreign intruders, their wealth inexplicable, their superiority intolerable. I will never forget the entry in the police report for Abique’s “motive for murder.” The motive given was not robbery, despite the jewels and money the chauffeur was said to have taken. Instead, for motive, there was just one word—“Revenge.”

  My aunt’s killing was just a pinprick in a world more violent than most of us ever imagined. In America we read about acts of mass slaughter and savagery; at first in faraway places, now coming closer and closer to home. We do not understand what connects these acts. Nor do we understand the role we have played in bringing them about.

  In the Serbian concentration camps of the early 1990s, the women prisoners were raped over and over, many times a day, often with broken bottles, often together with their daughters. The men, if they were lucky, were beaten to death as their Serbian guards sang national anthems; if they were not so fortunate, they were castrated or, at gunpoint, forced to castrate their fellow prisoners, sometimes with their own teeth. In all, thousands were tortured and executed.4

  In Rwanda in 1994, ordinary Hutus killed eight hundred thousand Tutsis over a period of three months, typically hacking them to death with machetes. Young children would come home to find their mothers, fathers, sisters, and brothers on the living room floor, in piles of severed heads and limbs.5

  In Jakarta in 1998, screaming Indonesian mobs torched, smashed, and looted hundreds of Chinese shops and homes, leaving over two thousand dead. One who survived—a fourteen-year-old Chinese girl—later committed suicide by taking rat poison. She had been gang-raped and genitally mutilated in front of her parents.6

  In Israel in 1998, a suicide bomber driving a car packed with explosives rammed into a school bus filled with thirty-four Jewish children between the ages of six and eight. Over the next few years such incidents intensified, becoming daily occurrences and a powerful collective expression of Palestinian hatred. “We hate you,” a senior Arafat official elaborated in April 2002. “The air hates you, the land hates you, the trees hate you, there is no purpose in your staying on this land.”7

  On September 11, 2001, Middle Eastern terrorists hijacked four American airplanes. They destroyed the World Trade Center and the southwest side of the Pentagon, crushing or incinerating approximately three thousand people. “Americans, think! Why you are hated all over the world,” proclaimed a banner held by Arab demonstrators.8

  Apart from their violence, what is the connection between these episodes? The answer lies in the relationship—increasingly, the explosive collision—between the three most powerful forces operating in the world today: m
arkets, democracy, and ethnic hatred.

  This book is about a phenomenon—pervasive outside the West yet rarely acknowledged, indeed often viewed as taboo—that turns free market democracy into an engine of ethnic conflagration. The phenomenon I refer to is that of market-dominant minorities: ethnic minorities who, for widely varying reasons, tend under market conditions to dominate economically, often to a startling extent, the “indigenous” majorities around them.

  Market-dominant minorities can be found in every corner of the world. The Chinese are a market-dominant minority not just in the Philippines but throughout Southeast Asia. In 1998, Chinese Indonesians, only 3 percent of the population, controlled roughly 70 percent of Indonesia’s private economy, including all of the country’s largest conglomerates. More recently, in Burma, entrepreneurial Chinese have literally taken over the economies of Mandalay and Rangoon. Whites are a market-dominant minority in South Africa—and, in a more complicated sense, in Brazil, Ecuador, Guatemala, and much of Latin America. Lebanese are a market-dominant minority in West Africa. Ibo are a market-dominant minority in Nigeria. Croats were a market-dominant minority in the former Yugoslavia. And Jews are almost certainly a market-dominant minority in post-Communist Russia.

  Market-dominant minorities are the Achilles’ heel of free market democracy. In societies with a market-dominant ethnic minority, markets and democracy favor not just different people, or different classes, but different ethnic groups. Markets concentrate wealth, often spectacular wealth, in the hands of the market-dominant minority, while democracy increases the political power of the impoverished majority. In these circumstances the pursuit of free market democracy becomes an engine of potentially catastrophic ethnonationalism, pitting a frustrated “indigenous” majority, easily aroused by opportunistic vote-seeking politicians, against a resented, wealthy ethnic minority. This confrontation is playing out in country after country today, from Indonesia to Sierra Leone, from Zimbabwe to Venezuela, from Russia to the Middle East.