by Amy Chua
Once again, I am making no claims here about the immediate or ultimate causes of the Holocaust. The point is simply that Weimar Germany stands as a somber warning against having excessive confidence in free market democracy as the universal solution to the problems of underdevelopment in societies with a (real or perceived) market-dominant minority. Weimar Germany marketized and democratized with a steadiness that would make most of today’s international policymakers proud. Yet in Germany after World War I, the pursuit of free market democracy fueled an ethnonationalist conflagration of precisely the kind that today threatens much of the non-Western world.
Market-Dominant Minorities in U.S. Inner Cities
Are market-dominant minorities a thing of the past in the West? For the moment, the answer is yes. At the national level, none of the contemporary Western nations has an ethnic minority that comes close to controlling the economy. In the United States, self-identified “whites” make up roughly 72 percent of the population and wield roughly proportionate economic power. On the other hand, the story becomes more complex if we look both within certain pockets of the United States today and at nationwide demographic projections for the future.
In the inner cities of all the major metropolitan areas across the United States, ethnic Koreans represent an increasingly glaring market-dominant minority vis-à-vis the relatively economically depressed African-American majorities around them. In New York City, Koreans, less than .1 percent of the city’s population, own 85 percent of produce stands, 70 percent of grocery stores, 80 percent of nail salons, and 60 percent of dry cleaners. In portions of downtown Los Angeles, Koreans own 40 percent of the real estate but constitute only 10 percent of the residents. Korean-American businesses in Los Angeles County number roughly 25,000, with gross sales of $4.5 billion. Nationwide, Korean entrepreneurs have in the last decade come to control 80 percent of the $2.5 billion African-American beauty business, which—“like preaching and burying people”—historically was always a “black” business and a source of pride, income, and jobs for African-Americans. “They’ve come in and taken away a market that’s not rightfully theirs,” is the common, angry view among inner-city blacks.28
Because Asians are relative newcomers, African-Americans view themselves as the “indigenous” and “true” inhabitants of the inner cities, who are now being ripped off, condescended to, and economically displaced by exploitative “outsiders.” In 1990, a nine-month racial boycott against two Korean produce stores in Flatbush, Brooklyn, eventually drove both stores out of business. Led by the Reverend Al Sharpton, the boycotts fueled Asian-black tensions across the city. Two years later, during the Los Angeles riots that followed the jury acquittal of police officers charged with beating Rodney King, African-Americans burned or looted an estimated two hundred Korean grocery shops, smashing windows and attacking Korean shopowners with knives, guns, and crowbars. In the end, fifty-five people died (many of them African-American), another two thousand were injured, and property losses totaled roughly $1 billion.
Relations between Korean-Americans and African-Americans seem to have improved since the Los Angeles riots, as leaders from both groups have made conciliatory efforts. Nevertheless, periodic bursts of anti-Korean baiting and violence still occur. At a December 31, 1994, rally, Norman “Grand Dad” Reide, vice president of Al Sharpton’s National Action Network, accused Koreans of “reaping a financial harvest at the expense of black people” and recommended that “we boycott the bloodsucking Koreans.” More recently, in November 2000, African-Americans firebombed a Korean-owned grocery store in northeast Washington, D.C. The spray-painted message on the charred walls: “Burn them down, Shut them down, Black Power!”29
Ethnic Koreans, along with other Asian subgroups such as Chinese or Vietnamese, are not the only market-dominant minorities in America’s inner cities. In certain communities—Brooklyn’s Crown Heights, for example—Orthodox Jews are a highly visible “outsider” entrepreneurial minority, deeply resented by the much more numerous, and far poorer, African-American majorities around them. In 1991, after ethnic violence broke out when a Hasidic Jewish driver in Crown Heights struck and killed a black child, anger on both sides ran especially high. “You’re not going to run New York City any longer,” Nancy Mere, an African-American Housing Authority assistant, shouted at Orthodox Jewish leaders at a news conference at city hall. “It was okay when our mothers were cleaning your floors and taking care of your babies—that was okay. But we’re not going to have it anymore.” Mere then added, expressing a typical sentiment, “We hear about the Holocaust, the Holocaust, the Holocaust. Well, the black man has lived through a holocaust in this city and it’s terrible, and we’re not taking it anymore.”
Meanwhile, black community leaders have done their share in fomenting resentment against entrepreneurial minorities. At a series of fiery rallies in 1995, and shortly after calling for anti-Korean boycotts, Reide called for mass boycotts targeting Jewish-owned businesses. “Nobody loves money any more than the Jewish people,” he yelled in a speech that was broadcast live on radio station WWRL. In response to charges that national black leaders like Al Sharpton and Louis Farrakhan were anti-Semitic, Reide threatened, to thunderous applause, that unless the accusations stopped, “we will marshal six million black men and women and boycott every Jewish-owned business throughout the United States.” He then named specific targets: “There are 91 Waldbaum’s stores; we will boycott them. There are 618 nationwide Toys ‘R’ Us stores; we will boycott them. There are 145 New York City Key Food shopping markets; we will boycott them. We will boycott Macy’s.”30
The “Browning of America”
According to the latest census data, in the state of California the number of whites is less than the combined number of Hispanic-, Asian-, and African-Americans. In the United States as a whole, the Census Bureau projects that whites will be a minority by 2060.31 At that point, if these projections hold true, the United States may well have a market-dominant minority at the national level, starting in the latter half of this century.
Nevertheless, anxiety about “the browning of America” must be kept in perspective. There are powerful reasons to think that majority-based ethnonationalist movements targeting a white market-dominant minority are unlikely to develop in the United States. To begin with, given how large a percentage of America’s population will still be white, it is extremely implausible that an antiwhite political movement could be democratically successful in the United States. Moreover, unlike most developing countries, there is a strong, ethnically crosscutting national identity in the United States, which would make it far more difficult for politicians to portray American whites as “outsiders” stealing the wealth from America’s “true” Hispanic, black, or Asian “owners.” (If Native Americans were still a majority in the United States, it might be a very different story.) In addition, rates of ethnic intermarriage and cultural assimilation are relatively high in the United States. While intermarriage is no guarantee against ethnic conflict, it is hard to imagine that American society will ever again look like a South Africa or Indonesia, where ethnic intermarriage rates are virtually nil.
Finally, as in all the Western nations, America’s less well off are rich by comparison to their developing-world counterparts. In the United States, even blue-collar workers have cars, television sets, and some savings. At work they are entitled to health benefits, paid vacations, and disability compensation. Outside the West, great majorities own no property and live in hopeless, open-sewer poverty. As a result, they are much more embracing of anti-market rhetoric and confiscatory policies. In the United States, most people have CD players and a garden, think of themselves as middle-class, and, at least outside our inner cities, believe at some level in the American Dream. For all these reasons, the possibility that there might someday arise within the United States, or for that matter in any of the Western nations, an antiwhite, anti-market ethnonationalist backlash is extraordinarily slim.
Indeed, pre
cisely because American society is so wealthy overall, America has come to occupy the role of a starkly market-dominant minority vis-à-vis the rest of world. We are now the object of intense resentment, even hatred, spurred by globalization. But this is the subject of chapter 11.
CHAPTER 10
The Middle Eastern Cauldron
Israeli Jews as
a Regional Market-Dominant Minority
The events of September 11, 2001, brought home to Americans the reality of Islamic terrorism and the importance of the Middle East conflict to American interests. The roots of that conflict have been attributed to many sources: religious fundamentalism, “ancient” Arab-Israeli animosities, the dispossession of Palestinian land, the nature of Islam, repressive regimes in the Arab states, American support for those regimes based on our need for oil, and so on.
These explanations are all partially true. But they leave out a crucial dimension of the story: the galvanizing effect of globalization on ethnic conflict. In the Middle East as elsewhere, globalization has wildly disproportionately benefited an “outsider” market-dominant minority—in this case, the Israeli Jews—fueling ethnic resentment and hatred among a massive, demagogue-incited population that considers itself the “indigenous” “true owners of the land.” In the Middle East, however, this conflict occurs not at the national, but at the regional level.
Previously throughout this book I have focused on dynamics internal to nations: specifically, the danger, within individual countries, of sudden democratization in the presence of widespread poverty and a resented market-dominant minority. By contrast, the Arab-Israeli conflict spans a number of different countries, and the market-dominant minority is for the most part located in a separate sovereign jurisdiction. Moreover, the Middle East, with only a few exceptions (of which Israel is one), has so far been seemingly immune to democratization—and the United States notoriously lax in promoting it, particularly among our oil-rich Gulf allies.
The Arab-Israeli conflict is about as loaded and complex as any the world has seen, involving religion, land, geopolitics, colonization and decolonization issues, competing claims to self-determination, and much more. To suggest that the Arab-Israeli struggle is principally about economic disparities would be both absurd and offensive. In addition, it is difficult to disentangle Arab animosity toward Israeli Jews from a broader anti-Semitism or from antisecular, anti-Western hostility more generally. Nevertheless, among many other dynamics, the Arab-Israeli conflict—pitting the region’s 221 million, largely poor Arabs against Israel’s starkly more prosperous 5.2 million Jews1—is a classic example of an intensely popular, majority-supported ethnonationalist movement directed against a hated, market-dominant minority. But let’s back up a bit and look first at some of the individual countries in the region.
The Absence of Market-Dominant Minorities
in the Arab Countries of the Middle East
With a few possible exceptions, market-dominant minorities do not exist within particular countries in the Middle East. The ruling elites in the Arab states may be distinguishable in important respects from the poor masses they govern—for example, in their extreme wealth, their Western dress and orientation, or their relative religious moderation—but they are not perceived as ethnically distinct outsiders. Nor does Israel appear to have a market-dominant minority, although the Ashkenazim/Sephardim divide will be discussed in the following section.
Putting aside Israel for the moment, the Middle East can be roughly divided into three subregions: North Africa, the Gulf States, and the “Levant” or “Mashriq” countries. The North African countries include Algeria, Egypt, Libya, Morocco, and Tunisia. The Gulf States include Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman, and Yemen. The Levant, a colonial term (al-Mashriq is the Arabic equivalent), usually refers to the countries of the eastern Mediterranean including Lebanon, Syria, Jordan, and Iraq. In addition, Iran and Turkey, while not always considered part of the Middle East because their populations are not predominately Arab, are often included in the description of the Middle East region as they share the same religious traditions and an interwoven political history.
There are no market-dominant minorities today in North Africa. The major ethnic divisions in North Africa are between Arab and Berber. Self-identified Berbers make up roughly one-quarter of the population in Algeria, where political and economic friction has frequently resulted in mass demonstrations and deadly riots. Estimates of the Berber population in Morocco typically range from 30 percent to 45 percent. Berbers represent much smaller minorities in Libya and Tunisia. It is worth noting that most Berbers are also Muslim and that there has been considerable intermarriage since the rise of Islam and concurrent Arab influx some thirteen hundred years ago. In any event, Berbers are certainly not market-dominant, and if anything, disproportionately poor.
In Egypt, historically, the Christian Copt minority was disproportionately economically successful. Their market dominance, however, was largely broken up by President Gamal Abdel Nasser, whose sweeping (and economically disastrous) land reforms and nationalizations in the 1950s disproportionately targeted wealthy Copts. Today, while there remain some very successful Coptic business families, Egypt’s economic elite, including many military insiders, is heavily Muslim and not perceived as ethnically distinct from the rest of the population.2
Similarly, there are few, if any, market-dominant minorities in the Gulf States. The main religious divide in the Gulf is between Sunni Muslims and Shia Muslims. The vast majority of the population in the Gulf States are Sunni Muslims, although each country has its own distinctive dynamic. In Bahrain, for example, the population is 70 percent Shia Muslim and only 30 percent Sunni. Because the ruling family and those with significant economic power in Bahrain are Sunni, the Shia majority often complains of their second-class status, and the kingdom has been rocked by a number of disturbances and riots over the years. Most Middle East experts agree that the Shia majority would vote out their Sunni overlords were there to be any real democratic opening.
More generally, most of the ruling families in the Gulf States are repressive and appear to be increasingly unpopular in their own countries, where they are widely viewed as morally bankrupt, toadying to the United States and living off the fat of a corrupt capitalism. Although the citizens of the Gulf countries enjoy a significantly higher standard of living than their brethren in the Mashriq, the consensus is that democratization in these countries would probably lead to the ouster of the current regimes. Nevertheless, with a few possible exceptions (such as Bahrain), the fact remains that the ruling families in the Gulf are not ethnically distinct from the majority of their populations.3
In the Levant there are significant group divisions, mostly along religious lines. Christians make up a substantial portion of the population in Lebanon (30–35 percent), Syria (10 percent), and Jordan (6 percent). Other religious divisions exist between various Muslim sects—most notably Druze in Lebanon and Alowite in Syria. In Syria, the Alowite have controlled the presidency through the military dictatorship of Hafez al-Asad and now his son, Bashir al-Asad. As with Bahrain, it is a near certainty that democratization in Syria would severely undercut the Alowite sect’s current political and economic dominance.
Lebanon is perhaps the most religiously diverse country in the region, with its plethora of Muslim and Christian sects. After World War I, for reasons including the establishment by the French of a confessional power-sharing system in which the country’s Christian Maronites controlled the presidency, Lebanese Christians emerged as something of a market-dominant minority, deeply resented by the country’s majority Muslim population. Largely over this issue, bitter civil war erupted in 1976, causing many wealthy Lebanese to flee the country. The extraordinary market-dominance of the Lebanese minorities in Latin America and West Africa has already been noted; many of these successful expatriate Lebanese have been Christians.
Today, Lebanon is generally viewed as being on the
cautious upswing, although military dominance and political interference by Syria remain serious problems. With the 1991 Taif Accord, a new power-sharing system was put in place, in theory giving the country’s Muslim majority political representation more proportionate to their numbers. At the same time, many wealthy Lebanese Christians are returning to the country. Whether the problem of a market-dominant minority reasserts itself in Lebanon’s struggling democracy remains to be seen.4
In sum, with only a few possible exceptions, none of the Arab countries has a market-dominant minority. Few, if any, are democratizing. Rather, throughout the Arab Middle East, economic and political power tends to be concentrated in the hands of a corrupt, repressive, often hereditary ruling elite that deflects popular criticism by fomenting hatred against other, “outsider” targets.
Israel: Ashkenazim as a Market-Dominant Minority?
Israel presents a surprisingly complicated case. This is true even if we bracket off the country’s Arab population for the moment and focus only on Israeli Jews. If the division between Ashkenazi Jews and Sephardic Jews is viewed as an ethnic division—I return to this question later—then the former are arguably a market-dominant minority.
In the Middle Ages, explains Bernard Lewis, the terms Ashkenaz and Sepharad (actually two ancient place names from the Hebrew Bible) were used to refer to Germany and Spain, respectively. Over time, Ashkenazim came to refer to Jews of European or Russian origin, most of whom in the past spoke Yiddish, a German dialect. By contrast, the term Sephardim came to denote Jews who came from the Arab-speaking Muslim lands, even though only a small portion of these Jews actually originated in Spain. Ashkenazim founded modern Israel, but by far the largest immigration to the country after independence was from Muslim countries. At least until recently, Sephardim made up roughly 55 percent of the Jewish population in Israel.5
