Income Disparity -> Ethnic Cleansing?

Amy Chua in "A World on the Edge": "There is in the world today a phenomenon that turns free-market democracy into an engine of ethnic conflagration."

Oh no. It seems like capitalism is always turning out to be an engine of some sort of conflagration. What caused it this time?

The problem is market-dominant minorities, "the Achilles' heel of free-market democracy." Well, ok, yes, that's true. The problem with free markets is that some end up with lots and many end up with little, and that's a difficult pattern to break out of. Those with a lot end up, ostensibly, as "market-dominant minorities," because they dominate the market and are in the minority of the population. But Chua is referring here specifically to ethnic minorities. And when those guys end up controlling the market, it adds a whole other host of problems.

A note: this blog and the project at large focuses on income disparity between nations, not within them. But this article came up in class and is relatively germane to the reasons behind inequality, so I thought it would be worth discussing.

An unsavory quality of humanity is that we're all racists. Yes, even you. We might as well come to terms with it, because historically it's undeniable: there's racism buried inside all of us, just itching to interact with some catalyst that brings it violently to the surface. How else do you explain our long history of ethnic conflict and genocide?

One such catalyst is the accumulation of near-oligarchical power in a society where most of the population is not of your ethnicity. For example: whites in South Africa and Latin America. Croats in former Yugoslavia. Chinese in the Philippines, Myanmar, and Indonesia. Jews in Russia. The British pretty much wherever they set foot for several hundred years. When one ethnic group realizes they have the financial and political capacity to wage ethnic cleansing, or at least the denial of human rights, on another, they invariably will. This is what happened between the Serbs and Bosnians in the early 90s (the Serbs being the perpetrators), during apartheid in South Africa in the second half of the twentieth century, and in many other circumstances throughout history.

Furthermore, Chua states that if an market-dominant minority is already in place for reasons unrelated to free-market democracy (as in South Africa, or for another example, the Philippines), the introduction of that very system does not combat but rather exacerbates the problem. This is because before it starts to combat the divergence in income groups, it almost always results in a backlash perpetrated by an envious and resentful indigenous majority in an attempt to violently overthrow the market-dominant minority. So it cuts both ways: when capitalism and democracy allows a minority to become powerful in a foreign place, it will use that power to subjugate different ethnic groups. And if capitalism and democracy are introduced into a region where a market-dominant minority already exists, that minority is the one that ends up facing violent oppression.

Chua goes on to note that there is a global market-dominant minority: Americans. (Now we're back on topic.) Chua, an American, states that "the best hope for global free-market democracy [i.e., freedom and livable conditions for all] lies with market-dominant minorities themselves [i.e., us]." She suggests that we increase the proportion of our GDP that we devote to foreign aid (which, at 0.1%, is the lowest of any first-world nation; this sentiment is shared by Columbia economist Jeffery D. Sachs, according to the book of his I'm reading for this project, The End of Poverty); restrain our usage of the policies that have given capitalism a bad name, like labor exploitation and discriminatory lending; and invest in the well-being of regions that allow our country to be so rich in the first place. In a perfect world, Ms. Chua. Perhaps in the near future there will be conditions good enough at home to allow this kind of charitable devotion abroad. Until then, I believe that the better solutions are going to be those that are figured out by NGOs in collaboration with the stricken nations themselves.