In World on Fire, Yale law professor Amy Chua fails to prove her thesis that "the global spread of markets and democracy is a principal, aggravating cause of group hatred and ethnic violence throughout the non-Western world." World on Fire does, however, present convincing evidence for a somewhat different thesis: that modern democracy is no solution to long-standing ethnic, religious and racial conflict. This book also leaves no doubt that racial, ethnic and religious divisions will be a force in world politics for some time to come, contrary to what the wishful thinkers of the world would have us believe.

World on Fire focuses on the phenomenon of "market-dominant minorities" and the social and political problems that revolve around them. Examples include: the Chinese in the Southeast Asia, Lebanese in South America, Jews in post-communist Russia, and miscellaneous market-dominant minorities in Africa. Freeing up these economies tends to increase the wealth of these commercially-savvy minorities. Democratic pressures then eventually lead to a political backlash, often violent.

There is little doubt that democratization has tended to lead to backlashes against economically-successful minorities. Democracy is a system in which the majority and its manipulators get to force their will on minorities. Thus, coercion against minorities is an inherent part of democracy. As I argue elsewhere, many civil wars have resulted from the desire of a minority ethnic group to secede from a state controlled by a hostile ethnic majority.

Chua’s thesis that "free markets" lead to or cause violence, is problematical. She must prove that the free market – peaceful trade – leads to its opposite – violence. One of her problems in this regard is lack of a consistent definition of free markets. She admits this is difficult to define but repeatedly uses words that suggest she is speaking of very free markets indeed – the type libertarians support: "raw, laissez-faire capitalism," "unrestrained, laissez-faire," "raw, globally-oriented free market policies," "laissez-faire market conditions." The problem is that when we look at the actual economies in these countries after alleged "free market" reforms, we see not free markets but mixed economies and crony capitalism. The author herself spells this out, thus creating a disparity between the labels she uses and the realities she describes. Moreover, this disparity is critical to understanding the hostility directed at dominant minorities.

For example, Chua writes that Chinese businessmen in Burma benefited from crony capitalism and shared the proceeds with the junta. In Indonesia, "Chinese plutocrats accumulated great wealth by exploiting their corrupt ties with the increasingly hated Suharto." In Mexico, according to Chua, the main beneficiaries of privatization were the President and his cronies including Lebanese businessman Carlos Slim. If shrewd minorities get rich through political pull, that can engender ethnic hatreds that have nothing to do with free markets. Also, in true free markets, great fortunes cannot be made without also improving the living standards of the masses. Better living standards militate against ethnic violence. Crony capitalism of the type that is common in the third world is a zero sum game or worse. Thus, Chua fails to prove that the free market caused these ethnic backlashes. (If she is saying that crony capitalism – which allowed financially-savvy ethnic minorities to get rich quick through corrupt privatization schemes – exacerbates ethnic tensions, she is on firmer ground.) Chua does deserve credit for placing greater emphasis on democracy, rather than markets, as a stimulus to retaliation against market-dominant minorities: "Adding democracy to markets has been a recipe for instability, upheaval, and ethnic conflagration."

There is an additional problem for Chua which she makes no effort to ignore. These ethnic hatreds precede the state capitalism or crony capitalism that came later. Certainly, Jewish and Chinese minorities have been attacked for centuries in various countries. In other cases such as the Spanish in South America, a minority is resented because it gained its economic advantage through invasion and confiscation. If such resentment continues today under "markets," how can we say that markets are a cause of the hatred and violence?

Also, in many cases, the same minorities that did well for decades or even centuries also did well under crony capitalism. Thus, it seems that in many countries, certain ethnic minorities simply outperform the majorities in any system and are hated for it, and they tend to be subject to retaliation even under modern democracies. Again, the main lesson of the book is that, contrary to what the Enlightenment mind would like to believe, ethnicity, race and religion still count in politics, and democracy does not, contrary to popular and academic belief, assuage these tensions.

There are two important and timely ramifications of these truths. First, poor, economically-unsuccessful majorities tend to use their voting strength, and their physical strength, to beat up on economically-successful ethnic minorities. Thus, those who advocate virtually unlimited immigration into the United States, which eventually will lead to just such a prospect here, should tell us why they desire such a dismal American future. This is a practical and empirical argument against open immigration that transcends the theoretical debate among libertarians over open borders.

Second, given that democracies allow ethnic majorities to beat up on ethnic minorities, it is critically important to support the right of ethnic and religious minorities to secede and form their own nations. Secession turns out not to be a crackpot 19^th Century doctrine, but a sophisticated modern theory vindicated by a large body of contemporary scholarship of which World on Fire is merely the latest example.

The fact that the federal government of the United States is on the wrong side of this issue is currently causing chaos and the killing of American troops in Iraq, an artificial country created at gunpoint by American ally Great Britain, maintained by Saddam at gunpoint and now patrolled by Americans who presently hold three captive nations: the Kurds, the Sunnis and the Shiites.