DJ Meatmachine (pigpog) wrote,
DJ Meatmachine

economically dominant minorities

essential reading... i've come across amy chua's work before, but foolishly, only now have i read her stuff properly. she summarises her main conclusions in this article.

some interesting points:

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.


But if global free market democracy is to succeed, the problem of market-dominant minorities must be confronted.

The most obvious step is to try, in consensual ways, to dilute the market dominance of certain groups.


The underlying causes of market dominance are poorly understood and in any event seem highly intractable

Indeed, many of these minorities succeed despite official discrimination against them. Any explanation of their success will include the effect of own-group networking as well as a host of intangibles such as religion and culture.


To level the playing field in developing societies will thus be a painfully slow process, taking generations if it is possible at all.


A more controversial strategy consists of direct government intervention in the market designed to "correct" ethnic wealth imbalances. The leading example of such an effort is Malaysia's New Economic Policy (NEP), a programme established after violent riots in 1969 by indigenous Malays angry over the economic dominance of foreign investors and the country's Chinese minority. The Malaysian government adopted sweeping ethnic quotas on corporate ownership, university admissions and jobs.

In many respects, the results have been impressive.


But few countries enjoy the prosperity to make NEP-type programmes feasible. Affirmative action in favour of disadvantaged majorities - rather than minorities as in the west - also risks alienating the wealthy educated minority who may abandon the country taking their skills and assets. Moreover, such programmes can exacerbate ethnic tensions rather than relieve them, especially when politicians are themselves ethnic partisans. In his own mind, Slobodan Milosevic was conducting a form of affirmative action on behalf of a long-exploited majority.
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