2007 December 17 Monday
On The Market Dominant Minority Revolt In Bolivia

In Bolivia the more successful ethnic group wants to escape from the predations of the less successful ethnic group. In this case that means the lighter colored people want to escape from the tyranny of the darker colored people.

Four Bolivian departments are on collision course with the leftwing government of President Evo Morales after declaring radical autonomy statutes at the weekend.

The legislation, declared illegal by Mr Morales, would insulate the wealthier and mainly mixed-race eastern part of the country from parts of a controversial new constitution that grants greater powers to the country's majority indigenous groups.

On Saturday, tens of thousands of people took part in rallies in Santa Cruz and departmental capitals to celebrate the autonomy measures, while similarly large numbers of pro-government supporters demonstrated in favour of the new constitution in La Paz.

Rather, the market dominant (i.e. smarter and more economically successful) minority get treated as unfair and deserving of fleecing by the less intelligent and less successful majority.

The dispute in Bolivia has strong racial undertones.

Morales purports to represent the indigenous "majority," although others say most of Bolivia's population actually is mixed-race, not fully indigenous. Many immigrants from Europe, the Middle East and even Japan settled in and around subtropical Santa Cruz during the 20th century.

Morales, an Aymara Indian who grow up in poverty, has viewed his election as an opportunity to reverse centuries of domination by what he calls a European-descended, light-skinned elite.

The highlanders are Amerinds who are much poorer than the partially and fully Spanish low landers.

Morales' core support comes from the poor, indigenous majority that lives primarily in arid Andean highlands.

The country's first indigenous president, Morales considered his December 2005 election victory a mandate to reverse what he considers centuries of discrimination by a European-descended elite.

Vice President Alvaro Garcia, addressing leaders of the revolting states on national television Thursday, called on the scores of opposition members engaged in hunger strikes to cease them. He said he feared "a catastrophic standoff" had been reached in a power struggle of unforeseeable consequences.

The events in Bolivia fit a much larger and tragic pattern which Amy Chua, author of World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability, has described. Chua sees a world where in many countries the biggest political rift is between between ethnic majorities and market dominant minorities and this rift is made deeper by a combination of democracy and free markets.

There exists today a phenomenon - pervasive outside the west yet rarely acknowledged, indeed often viewed as taboo - that turns free market democracy into an engine of ethnic conflagration. I am speaking of the phenomenon of market-dominant minorities: ethnic minorities who, for varying reasons, tend under market conditions to dominate economically, often to a startling extent, the indigenous majorities.

Market-dominant minorities can be found in every part of the world. The Chinese are a market-dominant minority throughout southeast Asia. Whites are a market-dominant minority in South Africa - and, in a more complex sense, in Brazil, Ecuador, Guatemala and much of Latin America. Indians have historically been a market-dominant minority in east Africa, the Lebanese in west Africa and the Ibo in Nigeria. Croats were a market-dominant minority in Yugoslavia, as Jews are in post-communist Russia (six of the seven biggest "oligarchs" are of Jewish origin). India has no market-dominant minority at the national level but plenty at the state level.

Market-dominant minorities are the Achilles heel of free market democracy. In societies with such a minority, markets and democracy favour not just different people or different classes but different ethnic groups. Markets concentrate wealth, often spectacular wealth, in the hands of the market-dominant minority, while democracy increases the political power of the impoverished majority. In these circumstances, the pursuit of free market democracy becomes an engine of potentially catastrophic ethnonationalism, pitting a frustrated indigenous majority, easily aroused by opportunistic politicians, against a resented, wealthy ethnic minority. This conflict is playing out in country after country today, from Bolivia to Sierra Leone, from Indonesia to Zimbabwe, from Russia to the middle east.

Since 11th September, the conflict has been brought home to the US. Americans are not an ethnic minority. But Americans are perceived as the world's market-dominant minority, wielding disproportionate economic power. As a result, they have become the object of the same kind of popular resentment that afflicts the Chinese of southeast Asia, the whites of Zimbabwe, and the Jews of Russia.

Global anti-Americanism has many causes. One of them is the US-promoted global spread of free markets and democracy. Throughout the world markets are perceived as reinforcing US wealth and dominance. At the same time, global populist and democratic movements give strength and voice to the impoverished masses. The result is that Americans have directed at themselves what the Turkish writer Orhan Pamuk calls "the anger of the damned."

For globalisation's enthusiasts, the cure for group hatred and ethnic violence around the world is more markets and more democracy. Together, markets and democracy will gradually transform states into a war-shunning, prosperous community, and individuals into liberal, civic-minded citizens and consumers. Ethnic hatred and religious zealotry will fade away.

I believe, rather, that in the numerous societies around the world that have a market-dominant minority, markets and democracy are not mutually reinforcing. Because markets and democracy benefit different ethnic groups in such societies, the pursuit of free market democracy produces highly combustible conditions. In absolute terms, the majority may or may not be better off - a dispute that much of the globalisation debate revolves around - but any sense of improvement is overwhelmed by its continuing poverty relative to the hated minority's economic success. More humiliating still, market-dominant minorities, along with their foreign investor partners, invariably come to control the crown jewels of the economy, which are often symbolic of the nation's patrimony and identity - oil in Russia and Venezuela, diamonds in South Africa, silver and tin in Bolivia, jade, teak and rubies in Myanmar.

America's promotion of democracy and free market capitalism around the world has unleashed conflicts between ethnic groups. The more of a market a country has the greater will be the differences in levels of success of different ethnic groups. This is a very strong argument against letting in immigrant groups who will do worse than the existing market dominant majority. But it is also an argument against letting in immigrant groups that will do better than the existing majority. Homogeneity (or at least heterogeneity with small differences in ability between groups) is the formula for peaceful democracy and capitalism that does not breed deep resentments.

Share |      By Randall Parker at 2007 December 17 09:38 PM  Ethnic Conflict

TGGP said at December 17, 2007 10:05 PM:

Thomas Sowell's "Black Rednecks & White Liberals" has some good sections on the issue, as does Amy Chua's "World on Fire". I have hosted "Are Jews Generic?" from the former here.

John S Bolton said at December 17, 2007 10:22 PM:

Egalitarian rabble-rousers have an easy time when quickly-identifiable groups are juxtaposed while differing significantly in ability. A general law counld be stated:
for each point of IQ that two such groups differ, the lower has extra incentive to try to shift status competition towards violence, but especially away from any contest, the outcomes of which, correlate positively with IQ,
and a corollary:
the more strongly positive the correlation with IQ, the more the lower group will tend to try to cancel or reverse the results of that competition.
There is another dimension which might be called militarism/pacifism, in which the groups differ in ways with real wildcard potential.
In Indonesia the overseas Chinese dominated the IQ-correlated activities, except the top levels of the military and police.
There is a Jewish story like this as well.
The Chinese were repeatedly slaughtered, rioted against, and eventually cleared out altogether from Indonesia.
This is the situation Chua probably has especially in mind.
Latin America and other areas are different though, since one doesn't see Jews and/or Asians overrepresented in for example service academies.
What I mean is, the worst happens when the high IQ group is not only a minority, but 'pacifistic' in the above sense.

TJ said at December 18, 2007 6:16 AM:

"In Bolivia the more successful ethnic group wants to escape from the predations of the less successful ethnic group"

Interesting. Sounds almost like another country that I am more familiar with. On another topic, where does the army stand in this whole thing and what is their ethnic makeup?

Loki on the run said at December 18, 2007 10:56 AM:

One of the things I noticed in Chua's book was her very unsympathetic treatment of the wives of Chinese Indonesians. Almost as if they deserved the treatment meted out to them by the ethnic Indonesians just because they were Chinese or something.

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