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Sixth Annual Grotius Lecture: World on Fire Amy Chua American University International Law Review Volume 19 | Issue 6 Article 2 2004 Sixth Annual Grotius Lecture: World on Fire Amy Chua Follow this and additional works at: http://digitalcommons.wcl.american.edu/auilr Part of the International Law Commons Recommended Citation Chua, Amy. "Sixth Annual Grotius Lecture: World on Fire." American University International Law Review 19, no. 6 (2004): 1239-1253. This Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in American University International Law Review by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. THE SIXTH ANNUAL GROTIUS LECTURE:* WORLD ON FIRE AMY CHUA** Many thanks to all of you for coming this evening. It's a great pleasure and honor for me to be giving the Grotius Lecture this year. I'm very grateful to Hannah Buxbaum, Charlotte Ku, and Anne- Marie Slaughter for inviting me. Many thanks also to Danny Brad- low and to the American University, Washington College of Law for co-sponsoring this event and to Upendra Baxi for commenting. My plan is to speak for about thirty minutes. I'll start by presenting the main thesis of my book, World on Fire,1 and I'll try to illustrate that thesis with examples from specific countries, from Indonesia to Bo- livia to Russia to Sierra Leone. I'll then shift my focus to the United States and how it fits into the picture. I'll conclude with some * Editor's Note: the following is a revised version of the Grotius Lecture presented at the American Society of International Law's ("ASIL") 98th Annual Meeting, which was held March 31-April 3, 2004. The Grotius Lecture Series is co- sponsored by the American University Washington College of Law, ASIL, and the International Legal Studies Program. The purpose of the Grotius Lecture Series is to open the ASIL forum to distinguished scholars for the purpose of discussing new and important topics in international law that might not otherwise be heard. It also provides a forum for participants to create an expanded space, giving them opportunities to explore the intellectual underpinnings of timely issues of interna- tional law. ** Amy Chua is currently a Professor of Law at Yale University. She lectures fre- quently on the effects of globalization to government, academic, business, and NGO groups. She has also lectured widely outside the United States, including in Argentina, Bolivia, Chile, China, Mexico, Taiwan, Turkey, South Africa, and the UK. Her areas of teaching include contracts, law and development, international business transactions, and law and globalization. She holds both an A.B. and a J.D. from Harvard University. 1. AMY CHUA, WORLD ON FIRE: How EXPORTING FREE MARKET DEMOCRACY BREEDS ETHNIC HATRED AND GLOBAL INSTABILITY (2003) [hereinaf- ter WORLD ON FIRE]. 1239 1240 AM. U. INT'L L. REV. [19:1239 thoughts about policy implications for international institutions and international lawyers. Let me begin, then, by taking you back to 1989-the fall of the Berlin Wall, the death of communism. As I'm sure many of you re- member, a kind of consensus-a triumphal consensus--emerged at that time, not only in the United States, but to a considerable extent around the world. And that consensus was that markets and democ- racy, working hand-in-hand, would transform the world into a com- munity of modernized, productive, peace-loving nations.2 In the process, ethnic hatred, religious zealotry, and other "backward" as- pects of underdevelopment would be swept away.3 Unfortunately, if you look at the last fifteen years, something very different has happened. Since 1989, we have seen the proliferation of ethnic conflict, intensifying nationalism, fundamentalism, anti- Americanism, confiscations, expulsions, calls for re-nationalization, and two genocides of a magnitude unprecedented since the Nazi Holocaust. Why? What happened? Part of the answer lies in the relationship-and, increasingly, the explosive collision-among the three most powerful forces operating in the world today: markets, democracy, and ethnic hatred.4 The central thesis of my book is that, contrary to conventional wisdom, markets and democracy-at least in the form in which they're currently being promoted-may not be mutually-reinforcing in the developing world. On the contrary, in many non-Western countries, markets and democracy may be on a collision course. And the reason for this has to do with a phenomenon that is perva- sive outside the West, yet almost never acknowledged, indeed often viewed as taboo. This is the phenomenon of what I call market- 2. See id. at 20 (explaining the development of global organizations like the International Monetary Fund and the Organization for Economic Cooperation and Development for the purpose of "modernizing" and privatizing developing coun- tries). 3. But see id. at 21 (stating that global markets have generally accentuated the dominance of "outsider" minorities, and have fueled ethnic envy and hatred within impoverished majorities). 4. See id. at 16 (noting that the sobering lesson of globalization is that the combination of free markets and democracy has consistently acted as a catalyst for ethnic conflict). 2004] GROTIUS LECTURE 1241 dominant minorities ("MDMs"): ethnic minorities who, along with foreign investors, can be expected under market conditions to eco- nomically dominate the "indigenous" majorities around them, at least in the near to midterm future.5 Examples of MDMs include the Chinese throughout Southeast Asia6 (most recently, unknown to most Americans, ethnic Chinese have literally taken over the economies of Rangoon and Mandalay in Burma); Indians throughout East Africa and parts of the Caribbean; the Lebanese in West Africa and parts of the Caribbean; the Ibo in Nigeria; the Bamileke in Cameroon; Tutsi in Rwanda; Kikuyu in Kenya; whites in South Africa; whites in Zimbabwe; Croatians in the former Yugoslavia; Jews in post-Communist Russia; Tamils in Sri Lanka; and Bengalis in Assam-the list goes on, quite strikingly, as I try to document in my book. Before I go on, let me flag something that I hope is obvious to all of you from this list: groups can be mar- ket-dominant for very different reasons, ranging from "entrepreneu- rialism" and social networks to a history of apartheid or colonial op- pression. For example, if, as with whites in South Africa, a small minority uses force to relegate the majority to inferior education and inhumane conditions for over a century-that minority is likely to be a MDM.7 And this has nothing necessarily to do with "culture." On the other hand, to be clear, by market dominance, I'm not just talking about vague ethnic stereotypes, but rather about starkly- disproportionatecontrol of major sectors of the economy. So, in the Philippines, where my own family is from, the Chinese make up only one percent of the population, but control as much as sixty percent of the private economy, including all the major airlines and virtually all the major banks and businesses.8 Similarly, whites in South Africa currently make up roughly fourteen percent of the population, but 5. See id. at 6 (labeling market-dominant minorities "the Achilles' heel of free market democracy"). 6. See WORLD ON FIRE, supra note 1, at 23-34 (documenting how, unknown to most Americans, ethnic Chinese have taken over the economies of Rangoon and Mandalay in Burma). 7. See id. at 97-100 (contrasting the disproportionate amount of wealth con- trolled by South African whites, which is attributable to the "head start" given by the whites' forbearers, who destroyed blacks' human capital). 8. See id. at 36-37 (describing the obvious presence of the Chinese in the Phil- ippine economy, such as in the Chinese-controlled Manila Stock Exchange). 1242 AM. U. INT'L L. RE V. [19:1239 still own more than eighty-five percent of the arable land and, at least until very recently, owned all of South Africa's largest conglomer- ates.9 Less well-known, but very typical of many Latin American countries, in Guatemala, a tiny minority of light-skinned elites con- trol almost all of the nation's wealth, while the Mayan Indians, nearly seventy percent of the population, live in abject and often illit- erate poverty.10 Similarly, I recently spent some time in Bolivia. At one point, I was having dinner with a wealthy businessman who was actually the brother of the president of the country at the time. He said to me (and I quote): "[t]his is a country where three percent of us run every- thing-politics, culture, the economy-and sixty-five percent of the population have no future."" That was just a few years ago, and I'll say more in a second about what has happened in Bolivia since. But it's very striking, although a majority or near-majority of the popula- tion in Bolivia are Amerindian (principally Aymara and Quechua In- dians), that the president was white, spent much of his life in Con- necticut, was educated at the University of Chicago, and speaks Spanish with an English accent! The phenomenon of MDMs has a number of sobering implications for international policy and international lawyers. Most crucially, in developing countries with a MDM, markets and democracy will tend to favor not only just different people, or differing classes, but differ- ent ethnic groups. Markets magnify the often astounding wealth of the market-dominant minority while democracy increases the politi- cal power of the impoverished indigenous majority. In such circum- stances, where the rich aren't just rich, but also belong to a resented "outsider" ethnic group, the pursuit of free market democracy often 9.
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