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Will U.S. Retain Its "Market-Dominant Majority"?
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February 02, 2003, 04:00 AM
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Francis Fukuyama famously announced at the end of the Cold War that humanity had reached "the end of history." Unfortunately, he forgot to tell history not to bother coming to work.

Easy as it is to make fun of Fukuyama, where exactly did he go wrong?

Fukuyama`s conception was formed by his expensive miseducation in the works of Hegel and other 19th Century German philosophers. History consists of the struggle to determine the proper ideology. Now there are no plausible alternatives to capitalist democracy. History, therefore, must be finished.

Lenin held a more realistic theory of what history is about: not ideology, but "Who? Whom?" (You can insert your own transitive verb between the two words.) History continues because the struggle to determine who will be the who rather than the whom will never end.

Fukuyama may be the only major nonwhite American intellectual who does not write primarily about race. This is admirable in many ways, but it`s a fatal shortcoming in a thinker of such expansive ambitions. Race remains enormously relevant in this world.

Amy Chua`s readable and eye-opening new book "World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability" documents just how pervasive ethnic inequality is around the worldand how much that drives the traumas we read about every day. (See also Paul Craig Roberts` review of her book here.)

Chua builds upon Thomas Sowell`s concept of the "middle-man minority"the often-persecuted immigrant ethnic group with a talent for retailing and banking, such as Jews, Armenians, Chinese, Gujarati Indians, Lebanese Christians, etc. She broadens that idea to include other relatively well-off groups, such as un-entrepreneurial hereditary landowners, like the Tutsis of Rwanda and the Iberian-descended whites of much of Latin America. She lumps them all together under the useful term "market-dominant minorities."

Chua begs off explaining why economic inequality exists between hereditary groups. So let me offer a general explanation.

Creating wealth is difficult. People who have wealth pass down their property, their genes, and their techniques for preserving and multiplying wealth to their descendents, rather than to strangers.

In countries without a reliable system of equal justice under the law, clannishness is particularly rational. Businessmen must depend upon their extended families for protection and enforcement of contracts. So they are particularly loath to do serious business with people to whom they have no ties of blood or marriage and who would thus be more likely to stiff them on a deal.

"Globalization," or economic liberalization, tends to make the poor majorities slightly richer and the "market dominant minorities" vastly richer. Sometimes the masses find this an acceptable tradeoff. But sometimes it drives them into a fury.

Often, the minority`s post-globalization riches are honestly earned, but not always. American-backed privatization schemes in Russia and Mexico put huge government enterprises into the hands of the most economically nimble and politically well-connected operators at give-away prices. (Chua and her brave editor Adam Bellow, who published The Bell Curve, deserve praise for calling attention to the ethnic makeup of the post-Soviet "oligarchs," something I was completely unaware of.)

Chua, a professor at Yale Law School, is herself the progeny of a market dominant minority: the Chinese of the Philippines. Chinese-speakers make up only 1% or 2% of the Philippines` population. But they own the majority of the country`s business assets. They seclude themselves in a luxurious world fenced off from the indigenous majority, whom they hold in contempt and wouldn`t dream of marrying.

Not surprisingly, the impoverished natives aren`t crazy about the rich newcomers. Chua`s beloved aunt in Manila was brutally murdered by her chauffeur. The unmotivated cops made little effort to find him.

It`s definitely nicer to belong to the minority than to the majority in these countries. But Chua makes clear that, to Americans used to our norms of congeniality and social equality, it would be an awfully depressing way to live.

After anti-Chinese riots in 1969, the Malaysian majority voted itself affirmative action at the expense of the Chinese. Chua considers this quota system a success. Malaysia has avoided subsequent violence.

Still, long-time Prime Minister Mahathir Mohamad, the world`s pre-eminent Muslim statesman (granted, the competition isn`t stiff), has become disillusioned with his plan.  As he put it recently:  "I feel disappointed because I achieved too little of my principal task of making my race a successful race…"  The same week that President Bush tacitly endorsed college admissions quotas, the strong-willed Mohamad ended them.

A much grimmer example: Indonesia. The Chinese made up 3% of its vast population, yet owned the great majority of all businesses. The dictator Suharto, whose family had lucrative ties to the Chinese community, fell in 1998. Democratization set off a vicious pogrom against the Chinese, many of whom fled to Chinese-majority Singapore. The government expropriated $58 billion in assets.

Not surprisingly, the native Indonesians proved inept at running the businesses nationalized from the Chinese, and the economy collapsed.

All of which leads to a disquieting conclusion: it can be contradictory for America to demand that other countries simultaneously free their economies and democratize their politics.

We are seeing this in Venezuela right now. The dark-skinned, democratically-elected Hugo Chavez is at war with the fair-skinned rich, who want the national oil company privatized. The Bush Administration ludicrously endorsed the white elite`s coup against Chavez last spring as a "victory for democracy," only to be embarrassed when the majority rose up and reinstalled him.

(Chua shows that all across South America since the year 2000, brown and black people are finally developing ethnic self-consciousness and solidarity in the struggle against the whites who have so easily held them down for so long. This historical shift will probably be reflected among Hispanic immigrants in the U.S., most likely to the electoral benefit of the Democrats. Similarly, Beijing`s sponsorship of anti-white racialism following Tiananmen Square has translated into a shift to the Left among Asian-Americans.)

That property rights and one man-one vote democracy don`t always mix well would not have surprised Aristotle, Edmund Burke, or Alexander Hamilton. Yet many Americans who call themselves conservatives have forgotten this.

One reason: we are one of the fairly small number of lucky countries with "market dominant majorities." We can have our cake (capitalism) and eat it too (democracy) because our majority group is economically quite competent.

America`s perpetual trouble has been a less-productive black minority. Black-white economic inequality is not a problem that America is going to be able to solve any time soon. But, due to our market-dominant majority, our country is rich enough to live with it.

In contrast, if our current mass immigration system is allowed to continue, America will become just another country with a market dominant minority. Through government policy, we will have inflicted upon ourselves the kind of ugly society seen in most of the rest of the world.

[Steve Sailer [email him] is founder of the Human Biodiversity Institute and movie critic for The American Conservative. His website www.iSteve.blogspot.com features his daily blog.]