World on Fire - Brownstein, Michael [10]
What happens when democracy is added to this volatile mixture? Part Two addresses the political consequences of globalization. In countries with a market-dominant minority, democratization, rather than reinforcing the market’s efficiency and wealth-producing effects, leads to powerful ethnonationalist, anti-market pressures and routinely results in confiscation, instability, authoritarian backlash, and violence.
Part Three discusses the phenomena of market-dominant minorities and ethnonationalism in the West, past and present. It also addresses the future: What should be done about the explosive instability that market-dominant minorities inject into the pursuit of free market democracy? I suggest that the United States should not be exporting markets in the unrestrained, laissez-faire form that the West itself has repudiated, just as it should not be promoting unrestrained, overnight majority rule—a form of democracy that the West has repudiated. Ultimately, however, I argue that the best hope for democratic capitalism in the non-Western world lies with market-dominant minorities themselves.
PART ONE
THE ECONOMIC IMPACT
OF GLOBALIZATION
Since the creation of Microsoft, the software industry has produced the largest crop of billionaires and multibillionaires in American history. Now imagine that all these billionaires were ethnic Chinese, and that Chinese-Americans, although just 2 percent of the population, also controlled Time Warner, General Electric, Chase Manhattan, United Airlines, Exxon Mobil, and the rest of America’s largest corporations and banks, plus Rockefeller Center and two-thirds of the country’s prime real estate. Then imagine that the roughly 75 percent of the U.S. population who consider themselves “white” were dirt poor, owned no land, and, as a group, had experienced no upward mobility as far back as anyone can remember.
If you can picture this, you will have approximated the core social dynamic that characterizes much of the non-Western world. Throughout South and Southeast Asia, Africa, the Caribbean and the West Indies, much of Latin America, and parts of Eastern Europe and the former Soviet Union, free markets have led to the rapid accumulation of massive, often shocking wealth by members of an “outsider” or “nonindigenous” ethnic minority.
Americans don’t hate Bill Gates, even though he has owned as much as 40 percent of the American population put together.
1 They don’t feel cheated or exploited by him, or that he has humiliated Americans by making billions “on their soil.” Not so in societies with a market-dominant minority. In these societies, class and ethnicity overlap in a particularly dangerous way. The extremely wealthy stick out—whether because of their origins, skin color, religion, language, or “blood ties”—from the impoverished masses around them, and they are seen by these majorities as belonging to a different ethnicity or people—as “outsiders” who look different, speak differently, or as Fiji’s nationalist leader George Speight recently said of his country’s market-dominant Indian minority, “smell different.”
2
When the U.S. Department of Justice sued Microsoft, accusing it of engaging in monopolistic practices to try to destroy its competitors, Americans did not want to lynch Bill Gates or strip him of his assets or even take him down a few notches. On the contrary, polls found that most Americans wanted the government to leave Gates alone, so that he could “get back to making bucks.”
3 But in the numerous non-Western countries with a market-dominant minority, the plutocrats are ethnic outsiders. And while Bill Gates does not generate mass ethnic resentment in the United States, Indian tycoons in Uganda, Eritrean businessmen in Ethiopia, and Jewish oligarchs in Russia do.
Most Americans—whether ordinary citizens, commentators on globalization, or policymakers—are unaware of this problem. As a result, we have been confidently exporting free market capitalism to the