Yale Professor Amy Chua Globalization Expert Urges Caution In Pushing Democracy, Free Markets in Iraq by John Shaw As ambitious plans are conceived to rebuild Iraq after the devastation caused by Saddam Husseinís long reign and the U.S.-led war to oust his regime, Amy Chua said that global policymakers should carefully study their history books. Chua, a professor at Yale Law School and an expert on globalization, argues that in the last two decades, disasters have occurred when democracies and free markets have been foisted onto nations that have little experience with such principles, especially when those nations are driven by sharp ethnic divisions. Regarding Iraq, Chua says the United States should consider the intense ethnic and religious hatreds that have been bottled up for decades in Iraq and the countryís minimal exposure to modern market economics. ìIím not that optimistic about democracy in Iraq in the short term. There is a long history of horrible massacres and intern al feuds. Just to hold immediate elections would breed scapegoating and violence,î Chua said in a recent interview. ìItís wrong to think we can just install laissez-faire capitalism and free-election democracy in Iraq and expect everything to come out perfectly.î Iraqís ethnic dynamics are very complex, with a history of crosscutting conflicts among Kurds, Shiites, Sunnis and Christians, said Chua. ìFree markets and democracy will have ethnic implications in Iraq, and we have to pay attention to them or we run the risk of ending up with something even worse than Saddam Hussein,î she said. As policymakers confront the challenges of rebuilding a devastated nation, Chua urges them to avoid easy slogans, wishful thinking and facile historical analogies. ìI think the analogies of Iraq to Japan and Germany after World War II are terrible because neither country was ethnically diverse in 1945. In fact, both were strikingly homogeneous. Unfortunately, I think the better analogy is the former Yugoslavia,î she said. Chua says that building the foundation for a modern Iraq will be a difficult task that will require patience and wisdom. ìI also think this can be a huge opportunity for the United States to do the right thing and rebut a lot of suggestions about our motives. The United States should take visible, symbolic steps to be different than Saddam Hussein. We should, for example, let the Iraqi people realize the benefits of Iraqís oil wealth,î she said. A vivacious, cheerful and unpretentious woman, Chua is ethnically Chinese but grew up in Illinois and Indiana as one of four daughters of immigrant parents from the Philippines. She studied at Harvard University and Harvard Law School and then worked for five years as an attorney on Wall Street, where she specialized in privatization projects in Mexico. Chua left Wall Street to become a law professor, first at Duke University and now at Yale. Her husband is also a Yale law professor, and they have two daughters. Chua has gained international recognition for offering a provocative, even a dark view regarding the effects of globalization. Far from accepting the notion that globalization is an unmixed blessing that will generate wealth and opportunities for the entire world, Chua believes it has intensified the collision between the three most powerful forces in the contemporary world: markets, democracy and ethnic hatred. Chua emphasizes that she supports globalization, free markets and democracy but believes they should not be jammed down the throats of all nations. The prevailing view among globalizationís supporters, she said, is that markets and democracy are a universal prescription for the problems of underdevelopment. Chua instead argues that the global spread of markets and democracyóat least in their raw, unrestrained formóis a cause of group hatred and ethnic violence throughout the non-Western world. Chua said that since 1989, the world has seen such disturbing events as the proliferation of ethnic conflict, the rise of militant Islam, the intensification of group hatred and nationalism, expulsions, massacres, confiscations, calls for renationalization and two genocides of magnitudes unprecedented since the Nazi Holocaust. In her academic writings and in a powerful new book titled ìWorld on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability,î Chua identifies an important phenomenon prevalent in the developing world: market-dominant minorities. She has found that in a number of countries, ethnic minorities, for varying reasons, tend to economically dominate the indigenous majorities around them under market conditions. These market-dominate minorities, Chua said, can be found throughout the world: with the Chinese throughout Southeast Asia, Indians in East Africa, Lebanese in West Africa, Ibo in Nigeria, Tutsi in Rwanda, Kikuyu in Kenya, Croats in former Yugoslavia, Jews in post-communist Russia, and whites in South Africa, Zimbabwe and certain Latin American countries. As an example, Chua noted that in Zimbabwe, whites account for only 1 percent of the population, but for generations have controlled 70 percent of the countryís best land and almost all of its commercial wealth. And in the Philippines, the 1 percent Chinese minority controls as much as 60 percent of the private economy. Chua argues that in countries with market-dominant minorities, markets and democracy not only favor different people and classes, but different ethnic groups as well. She said markets concentrate wealth in the hands of market-dominant minorities while democracy increases the political power of the impoverished majority, which has grievances it wants to settle. As a result, the presence of a market-dominant minority can turn ìfree-market democracy into an engine of ethnic conflagration.î Chua is credited with identifying the pervasiveness of market-dominant minorities around the world and with confronting the troubling implications of this fact for free-market democracies. She is also acknowledged with making important and original connections among democracy, free markets and ethnicity and for pointing out that outside of the Western world, it is ethnicity that makes the combination of markets and democracy so fragile and flammable. Chua said international financial institutions and the United States should better understand these connections as they develop political and economic recommendations for Iraq and other developing nations. But she added that since the fall of the Berlin Wall in 1989, U.S. leaders and senior officials at the World Bank and the International Monetary Fund have urged the developing world to embrace a raw form of capitalism that the United States and Europe abandoned long ago. ìItís striking to note that at no point in history did any Western nation ever implement laissez-faire capitalism and overnight universal suffrage at the same time, which is the precise formula of free-market democracy currently being pressed on developing countries around the world,î Chua explained. The law professor said Western leaders have argued that democracy and free markets go hand in hand, but in many cases the two in tandem have been a vehicle for instability, upheaval and ethnic turmoilóespecially in nations with market-dominant minorities, where the joint pursuit of free markets and democracy has led not to widespread peace and prosperity, but to confiscation, autocracy and mass slaughter. In a compelling conceptual leap, Chua argues that in much of the world, the United States is viewed as the global market-dominant minority, possessing vast and unseemly economic power relative to the nationís population. This, Chua says, helps explain the intensity of anti-American sentiment around the world, with the United States seen as the engine and principal beneficiary of international capitalism. This stunning market dominance and apparent invincibility has in turn ignited the envy, fear and resentment of much of the world. In this context, Chua says the Sept. 11 terrorist attacks can be viewed as an act of revenge analogous to the bloody confiscations of white land in Zimbabwe or the anti-Chinese rioting in Indonesia, fueled by the same mix of envy, grievance, powerlessness and humiliation. A popular professor and lecturer, Chua has outlined her provocative views to think tanks, academic groups and even the CIA. She is committed to presenting her ideas in a way that is understandable to the broader public. ìWriting in a way that is accessible to large audiences makes you more honest,î Chua said. ìYou canít hide behind complex models. You have to say what you reall y think. You have to decide what you really think.î Looking to the future, Chua wants to explore more deeply why market-dominant minorities have become such fixtures in the world, and she is interested in considering how these groups can better integrate into their societies to become positive forces for national progress. ìI believe that most market-dominant minorities have worked very hard and have overcome great obstacles. But some show disregard, even contempt, for the poor majorities around them. They behave like outsiders who donít care about the welfare of their nations,î she said. ìMarket-dominant minorities around the world need to find ways to give back to their communities and to do so in a generous spirit. And itís in their self-interest to do so.î Chua wants to study and explain how globalizationís benefits can be spread and how its most destructive features can be restrained. ìWe need to find a way to give the poor majority a psychological stake in global markets. You have to find ways to spread benefits, at a minimum to create a social safety net and some redistribution,î she said. ìIf global markets are to be sustained, we must find ways to spread their benefits beyond a handful of market-dominant minorities and their foreign investor partners. Otherwise, markets and democracy will continue to clash, destabilizing economies and exacerbating ethnic conflicts.î John Shaw is a contributing writer for The Washington Diplomat.