them before. in other words you had newspapers. they worried about television, and movies, you know, causing problems but then television created or jobs for journalists. could we have the same thing happen now? in other words, you have new internet companies starting up by press people themselves were not only writing but now they are owning their little niche oriented newspaper so that in the long term, there would be more jobs for people in the journalism world rather than less. >> this argument which i don't endorse this journal is there like farmers. in other words there are is complaining. there is something i was wrong. there is always something wrong, some threat. [laughter] barrow is about to be wiped out, but the underlying function, i do think 19th century journalism is quite a bit different so journalism, i mean whatever you want to call journalism, news is interesting to humans and so gathering things that people have never heard of before and telling them are things they don't know will always be function that people will pay something for our want. that function will always survive, whether objective journalism can survive, whether newsrooms, truthful journalism can survive, that is a very different question. >> is a question that in our history has not been solved by the miracle of the marketplace. has been solved by all kinds of monopolies and all kinds of subsidies that are quite artful but it made possible the remarkable tradition of journalistic excellence. i think that is important to keep on the table. i think it is one of the issues that will be addressed on thursday because i was a central issue in the columbia journalism review piece. okay, that is a good place to an. >> you want to make one more point? >> i hope that you leave this event stimulated, persuaded that all these kinds of regulatory issues really matter to the future of journalism and that you feel it so strongly that you will come back to this very room two nights from now to hear were the same from commissioner copps if you come tammy you will hear him specifically praise your book and your speech. and a lot -- anyway, thanks a lot to all of you and i urge everybody to read these books in stay off all the stuff. [applause] tim wu is a professor at columbia law school a fellow at the new america foundation and chairman of free press, immediate reform organization. to find out more visit tim wu .org. >> in this encore booknotes program from october of 2001, you yellow so professor amy chua talks about her book, "world on fire" how exporting free market democracy breeds ethnic hatred and global instability. she argues that free markets do not spread wealth efficiently, resulting in vast economic inequality in developing countries around the world. she also questions whether free markets and democracy are always compatible. c-span: amy chua, author of "world on fire," one sentence popped out to me as i read the book, and you say, "americans are unaware of the problem." what problem? guest: well, the book is aboutl, -- most americans tend to assume that markets and democracyans t naturally go together. and the thesis of the book is that in countries with what i call a market-dominant minority, markets and democracy are notdom mutually reinforcing because markets and democracy basically benefit different ethnic groups. so take indonesia as an illustration.ic free market policies in the 1980s and 1990s led to a situation in which the country's tiny, 3 percent chinese minoritt controlled an astounding 70 percent of the country's privatm economy. the introduction of democracy in 1998 produced a violentucti backlash.l five thousand homes and shops of ethnic chinese were looted and burned. two thousand people died. a hundred and fifty chinese women were raped. the wealthiest chinese left the country, along with some $40hi billion to $100 billion of ethnic chinese-controlledbill capital, plunging the country into a crisis from which it hasl not recovered. so in countries with a market-dominant minority -- and indonesia is just one of many examples -- markets and democracy benefit not justn different people or differentmor classes but actually differentt ethnic groups. markets make the resented minority richer and richer, while democracy increases theer political power of the poor,h frustrated, indigenous majorityp and the result is almost invariably tremendous instability and very oftenr violence. c-span: define the termft "indigenous." guest: well, i tend to pute. "indigenous" in quotes because it's a perception. i mean, there is, for example,n the -- indigenous indonesiansa are the pribumi majority, whoh felt that they were there first and that the ethnic chinese are outsiders or invaders. now, i put "indigenous" in quotes because many of the indonesian chinese have livedrs there for four generations the same with zimbabwe. i mean, the indigenous black majority is indigenous in a rea sense, but many of the white zimbabweans have lived there for, again, four generations.a c-span: let me go back to your term because it comes up throughout the entire book -- "market-dominant minorities."k guest: yes. c-span: one of the ones that surprised me was the lebanese in west africa.eb guest: yes. c-span: explain that. guest: well, actually, everybodx from west africa is familiar with this, so it's interesting that many americans, including myself, was not aware of this.tt the west african countries -- for example, nigeria -- thereo are many local indigenous, disproportionately successfulen african ethnic groups, also for example, the ibu in nigeria. but most saliently, most -- almost in virtually every west african country, there is a very small population of lebanese, ethnic lebanese, again, who came over sometimes two or three generations ago, and they are essentially the driving force and the link to global capitalism.l they -- you know, foreigno investors do all the deals with them, and they are extremely disproportionately wealthy. they typically -- in sierraem leone, that i discuss at great length, until the rebels took over, they basically -- the lebanese minority essentially controlled the diamond industryn which was -- and that's often true.n market-dominant minorities tendy to control the most -- thest country's most valuable natural resources, which is another --on the crown jewels, which is another reason that they -- their dominance provokes such hatred and resentment. c-span: you came local with your discussion about koreans in lost angeles.al guest: yes. c-span: explain the market-dominant minority in los angeles being koreans. guest: well, in general, i askae the question -- i talk aboutan. countries outside the united states, and one thing i say is that the united states does nott have a market-dominant minoritys at the national level. whatever one occasionally hears about koreans or jews, the united states economy is not controlled by any ethnic minority. and i actually document that.cot if you look at the 10 wealthiest americans, bill gates and theat other nine...am c-span: and the waltons.n (laughter)ni guest: yes, the family -- none of them belong to any identifiable ethnic group. however, i then get more specific, and i say that, actually, if you look at particular regions or areas in i the united states, you do see echoes of the same phenomenon. and yes, in los angeles and many of our inner cities,l korean-americans are essentiall, a market-dominant ethnice minority vis-a-vis the muchdo poorer and much more populousm african-american majorities pops african-american majorities around them. it's actually very similar because there's a sense of them being newcomers, outsiders that have come in to take away something that's not rightfully theirs, because they are relative newcomers. and the los angeles riots that i discuss and the more recent instance in brooklyn are very familiar. they follow very similar patterns where the poor majorities of these neighborhoods are actually behind of whipped up and stirred into anger by demogogs, often politicians who play on ethnic hatred for their own advantage. >> where did you get the title, "world on fire"? >> my publisher. disblr >> not your idea? >> not my idea. as an academic, i don't think i would have such a stark title. my own title, i can't even remember what it was, but it was long and boring. >> why did they pick this? do you have any idea? >> i think it's because my work originally started off as academic articles, even my mother couldn't understand them, and i think they probably wanted to make people more aware that it's not -- that i'm not writing about distant phenomena but i'm writing about things that affect them including -- i write about september 11th also and the implications of all this for america. >> your book is endorsed by wild spectrum here of people including strobe talbot and tom sole. that's a divergent group from one side to the other. >> that's something i'm actually proud of. i think that a lot of people are very bored of the debate about globalization. it's sort of going nowhere and people are tired of it, and i don't even think it makes sense to talk about the right and the left when it comes to globalization. so i think that both globalization's critics and globalization's enthusiasts overlook -- both make mistakes. they both overlook the ethnic dimensions of free market democracy. so i feel that my book is nonpartisan, or at least along traditional lines, and neither left nor right in any meaningful way, and it's about a phenomenon, the idea of a market-dominant ethnic minority is for not entirely bad reasons, i think it's one that is almost taboo in u.s. society. the idea of writing about an ethnic minority who would tend under free market conditions to dominate economically the indinl indigenous majority around them. so i think it's a topic that's not been addressed by either side, so it's not political that way. by the way, i don't think it should be taboo because the idea of a market-dominant minority is not to be equated with inherent entrepreneurialism. i write about people who owe their dominance to cloal yanism or apartheid. the fact that they are a very small portion of the population, 14%, and have historically controlled all of the best land and all of the major conglomerates, you know, owes principally to the fact that they didn't let the majority vote or live in humane conditions for over a century. >> what do you do for a living full time? >> i am a professor at the yale law school. >> are you a lawyer? >> i -- yes, actually, i went to law school, i passed the bar, and i practiced for four years on wall street at a major international law firm. >> where are you from originally? >> i am -- well, i'm ethnic chie neesese. i was born in champaign, illinois. my parents were both born in china, but they left china with their families for the philippines when they were young children. and most of my relatives are still in the philippines. >> why did they leave china for the philippines? >> for economic reasons around 1936, 1937. they were from a poor province, it's no longer so poor, but many people from that province at that time left. they took a boat and they headed straight and either -- and many of them went to the philippines. >> what years did they come over here? >> well, it was -- my parents actually eloped to m.i.t. in 1961. i was born in 1962. >> and why champaign, illinois? >> my father is also an academic. they came over for advanced degrees at m.i.t. and so my father went to complete his ph.d. at the university of illinois and my parents now live in berkeley, california. >> what are they doing now? >> my father is -- they're probably watching this show. they are -- my father is a professor at berkeley, teaches chaos theory and travels a lot. >> chaos theory? >> yes. >> wha what's that? >> well, he's an electrical engineer, but he works a lot in computers and math m math matmath maparticulars. >> how many years did you live in champaign, illinois? >> just a few years, and then i spent eight years in indiana, where my father taught at purdue. so my three sisters and i lived in indiana for eight years and then moved to berkeley, california. >> that was my hometown. so how long did you live in lafayette? >> seven years. >> and then what? >> and then my father received an offer to go to berkeley, so we then moved to berkeley, california, where i spent another eight years. >> did you go to u.c. berkeley? >> no. that's where my parents wanted me to go but i went to harvard. >> where did you get your law degree? >> harvard. >> what was that like? >> well, which part of it? going -- leaving the family? >> here you find your parents started out in china and you end up at one of the top universities in the united states, both undergraduate and a law degree. hard? come easy to you? >> well, we always worked hard. we always worked hard. >> how many are there in the family? >> three younger sisters. i think in some ways, i think my immediate family is probably a fairly typical immigrant story. my parents came over -- my father was from a very wealthy family, but he left all that and my mother was not. she was from a poor intellectual family, so when they came over to the united states, they were pennyless. no heat in boston. so it was just very natural, we had to work hard and we were all good students. >> i can't leave you without asking about your three sisters. what are they doing? >> one is a lawyer in d.c. another is a post doc at harvard. she's a doctor and a scientist. and my youngest sister lives with my parents, and she is 10 years younger than i am. she as down's syndrome. she's the family favorite. >> all right. back to the book for a moment. "world on fire," the idea for this came when? when did you -- you talked about writing the articles. when did you know you had a book, and this was -- doubleday bought this? >> i actually never imagined that it would be this kind of book. i started off just as an academic, writing academic articles about the relationship between market reforms, democratic refarms and ethnic conflict. so i produced three bar review articles and then i thought i would perhaps put it together, and many people suggested that i do so, so i put together a proposal originally for oxford university press, and, you know, it had -- the proposal was 3,000 pages long and had 2,000 footnotes, and through a series of coincidences, a friend suggested that perhaps i should have an agent look at it, and i have a great agent, and they suggested that -- well, actually it was interesting, my agent kept asking me, is there anything personal in this? and this is only a year and a half ago, before i started writing the book, and i -- answering honestly at the time, i said no, there was nothing personal in this, because i think for me, the whole academic project has been precisely to depersonalize everything. i'm writing about complicated and controversial subjects, so for every fact, i drop a footnote and substantiate it with empirical evidence. the last thing i wanted is for it to be subjective and personal. but as i've thought about it, the book has obviously changed, as probably for every author. of course, it's about what i know and my own background in a sense. >> you say personal because you lead right off with a story about your aunt leona. tell us that story. >> in 1994, this is -- i had just started as an academic -- as a professor at duke, and i had started to write about these issues already, but i received a phone call from my mother, i was at duke and she was in california, and she told me that my aunt, my father's twin sister, leona, his name is leon, had been murdered in the philippines. she was killed by her chauffeur. and my aunt and my whole family in the philippines are part of the very, very economically dominant and entrepreneurial 1% chinese minority in the philippines, and her chauffeur was part of the largely impoverished, much more populous ethnic filipino majority, and so my mother told me about that. >> where did your aunt live? >> she lived by herself in a beautiful home in manila. many of my relatives still live in manila. >> so how did you find out that the chauffeur killed her, and what were the circumstances? >> well, there was actually no dispute. two maids immediately confessed that they had actually been accomplices. i mean, it was pre-me premeditad a few minutes before the murder, they testified that he was sharpening the knife, and after the murder, he reported to them that their employer was dead, and the police were notified and sort of the usual things happened, but the murderer was never apprehended, and both of the maids were released. part of this has to do with the fact that first of all, kidnapping of ethnic chinese in the philippines is extremely common, and very rarely are the suspects apprehended. and part of this is, i think, because of the intense resentment against the ethnic chinese and the fact that the police and the security forces are largely -- or are all ethnic filipino, and they're not that motivated. in some ways, i think there's a lot of sympathy, not necessarily for the murderer but for the circumstances that would lead people to do such things. >> you say in the book she was 58 at the time? >> yes. >> again, the chauffeur has never been caught? >> no. i have the police report. >> what was the motive? >> well, it was interesting, the chauffeur apparently took some jewels, some money, but very stark for me, and this was probably why i open the book with this. i looked at the police report. i was very frustrated both with my family members in the philippines and the police that nothing was happening, and i asked my uncle, you know, were there any developments in the murder case? and the answer was, no, it's been closed. and i asked why. he said, this is the philippines. it's not america. so i actually got copies of the police report, and interestingly, under motive, there was just essentially one word, and it was " revenge," which was striking for me because it could have been robbery, it could have been something else. >> revenge for what? >> well, that's an interesting question. i think revenge for -- my own view is it's a combination, revenge for feelings of humiliation and powerlessness. many of the chinese-filipino families have many servants, and it's a very lopsided situation. the businesses are virtually all dominated by ethnic chinese, along with the very small sort of spanish aristocratic class. all of the peasants in the philippines are filipino, all of the maids and the servants and the chauffeurs are filipino, and when foreign investors come to do investment deals, they deal with the chinese. so i think it's -- well, revenge is a theme of the book, i think. it's an act of revenge rooted in tremendous feelings of anger and envy and grievance and humiliation. >> about 60 million people in the philippines? >> yes, i think that's right. >> and 1% of them are chinese? >> yes. >> what is it about the chinese that they succeed so well in that country? >> well, this is a tricky question that is not the main focus of the book, but many people ask me this. first of all, it's very complex, and i definitely do not think it is a genetic reason or necessarily even a cultural reason. groups can be market-dominant in one context and not in another. for example, the chinese in china were market-dormant for many generations under communist china. as to why the chinese are so -- the chinese minorities of all southeast asia, even burma, malaysia, i think part of it has to do with the immigrant origins that instill a sense of hard work. part of it has to do with family and, i guess, cultural considerations. but in addition, one thing i try to bring out in the book, a lot of it is -- part of it is also favoritism. so it's kind of circular because you have this entrepreneurial group that starts off and has disproportionate entrepreneurial skills, and often in the case of ferdinand marcos, an indij nas leader will actually go into cahoots with this market-dominant minority, and then engage in a sim buy oh particular relationship where i'll protect you, i'll give you these government franchises and licenses, you make a lot of money and you kick it back to me. so i guess the answer is that part of it is through -- part of the reason for the extraordinary market dominance of the chinese is entrepreneurialism, hard work, and i don't know the reasons for that, but at the same time, in some cases, also it's the legacy of colonialism and capitalism. >> i remember you saying that the malay and the chinese do not intermarry? >> that's correct. >> explain malaysia. what is it, 15 million people? >> malaysia is much smaller than indonesia. >> ind done indonesia has a coue hundred million. >> that's right. >> why not the intermarriage between the malay and the chinese? >> one mor important factor is religion. malay majority in malaysia and the indonesian majority in indonesia are principally muslim and the chinese are not, and so one professor friend of mine from singapore was joking but he said it's the pork factor, that muslims don't eat pork and chinese eat pork all the time and, therefore, it's impossible to get along. he was just being facetious, but i think that religion certainly has played a role. and an interesting example is thailand, where this is the southeast asian country where there has been the most assimilation and even intermarriage, and i think that most people agree that one of the factors is the fact that the tai are buddhist and not muslim, and this has made the assimilation easier. >> have you been to that part of the world? >> yes. >> did you ever meet this chauffeur, by the way? did you see your aunt in the philippines? >> yes, i saw my aunt on many occasions in the philippines, and i don't know if i met this chauffeur. i think not. but i've often wondered that. i've met many chauffeurs. i've often wondered if i had. >> let me switch from that part of the world to your trip to lapas, bolivia with your husband, jed, i believe, he's jewish. >> yes. >> and you bring that up in relationship not to the lapaz trip but the trip to russia. why? >> well, i start off with an anecdote. i was actually visiting at another university, and i have a colleague or a friend who was writing about the russian private tieization process. he and some co-authors had been very involved actually important advisors to the government, and he was finishing up an article describing the fiasco of the russian privatization process, describing how the lack of kind of careful planning and kind of laws against, you know, anti-competitive behavior laws against insider trading, how this had led to the looting and chaos that ensued in russia. but something about his article struck me, so i went and asked my friend, i said, is it possible that these 7olegarks and many of the principal players in the privatization process, is it possible that they were jewish? his reaction was to immediately say, no, no, i don't think so. and i then said, but it's interesting, if you look at their names, and he snapped back, you can't tell anything from names. and i was taken aback and i felt bad, but then actually just a few months later, one book came out, "the seal of the century," in which she documented through firsthand interviews the profiles of the seven, and, in fact, it turns out that six of the seven people, most commonly called the olegarks who came to control most of russia's natural resources during the 1990's were, in fact, jewish. this is the term that they use in raw russia for this small group of people who controlled most of the natural resources and then through their economic power, also exerted enormous political influence. for example, to use one of their words, guaranteeing yeltsin's reelection. they also controlled the media, and so they poured huge amounts of money into yeltsin's campaign and were rewarded for that. >> and you suggest this all a came after 1989? >> yes. >> fall of the law and the whole change and all that. >> yes. >> what is the impact, though, in that country? when i was reading it, i was thinking about our own country, that in the early days, there were a few that had all the money. >> yes. >> same thing, as they got on to dem cdemocracy, is this workingn russia? is democracy working at all? >> well, this is tricky. i mean, some of the olegarks, actually their role models are the carnegies. we used to be robert barrons but now it's time for -- a few of them turned to philanthropy, and i think that's a great thing. it's a complicated question, what the state of their democratic institutions are right now. wealth is still very disproportionately concentrated in the hands of a relatively small number. >> is there a percentage, by the way? >> yes. at least sort of in the late 1990's, i would say that these six or 7olegarks controlled, i think, 50 to 60% of the natural resource wealth. i think i'm getting those numbers right. and if you look at fortune or forbes, the list of the wealthiest people in the world, you'll see that that includes three or four of these jewish olegarks. as to the state of democracy, there are different analyses about what putin is doing right now. >> what's the reaction in russia to these seven men? >> there was tremendous antisemitism. just the free speech and kind of instance democratization led to lots of things, lots of positive things, but they also led to just a burst of demagogic behavior. the communist party leaders explicitly spewing antisemitism, campaigning on antisemitic platforms. there's a new party that's just come into existence specifically organized around taking back the wealth from the greedy jewish olegarks. so i think that's one very negative side of the transition. >> lepaz, bolivia, you and your husband and two daughters? >> yes, two daughters. the background to this is, i taught a long development seminar a few years ago, actually three or four years ago, and i had an excellent student from bolivia. i did not know at the time that he was from the elite classes. it makes perfect sense now if you think about it. >> his name? >> well, i call him auguto delgado. >> not his real name? >> no. he's related to many of the presidents, actually. i gave him that option. but he raised his hand in my seminar and said -- he was a fantastic student and i loved him, but he basically challenged me. he said, you know, professor chua, my country is a direct counter-example to you're thee thee this. all these things don't happen when you have democracy in a market-dominant minority. in my country, it's very si simr to zimbabwe or indonesia, we have a very small light-skinned minority, about 3% of the population control virtually everything. they control the economy, politics, culture. all the natural resources and are the foreign investors' partners. and then we have 65% of the population, the majority are impoverished, in many cases illiterate indians. but what he said was, in my country, you would never have an ethnically based populous movement. you would never have an ethno -- he says ethnicity has no mobilizing power in my country. he was very smart and very self-conscious. he said it has to do with a bad ris hit or miss tri of racism. but most indians in my country would rather identify themselves as peasants than indios because that's a derogatory term. so the story is that two years later, this is just actually in 2001, he e-mailed me from lepaz where he was a very successful lawyer and political commentator, and he wrote to essentially take back his words and he said, you know, this is really the time to visit. it's amazing, it's globalization and it's having extraordinary effects on my country, and for the first time in recent history, an imara leader is actually generating support among the indij nis populations on an explicitly racist or ethnically indian-based identity platform, saying whites should get out, should leave the country, the land belongs to the imaras and the catchuwas. and it was very stark and it was also, i think, a direct example of the collision between free market policies that benefited the people like my student in that well educated cosmo poll tan group and then globalization and democratization that not only empowers the majority, but also, you know, there had been an indian movement in ecuador and through cell phones, radio, television, these kinds of ethnic anger can spread too along with capitalism and democracy. so i visited lepaz shortly after that e-mail just to kind of see for myself. >> and how old are your little girls? >> at the time -- well, now they're 10 and 6. >> their names? >> sophia and louisa, or lulu. >> what did they think of the trip down there? >> they really hate it. well, lepaz was fine. it was beautiful. >> 11,000 feet. >> yes. as soon as we got there, the warnings were all right. everybody got headaches. the altitude, it's stunningly beautiful because the city just rises out of a crater. i've never seen anything like it. but it is very, very high, a lot of radiation, and we all felt innervated. no energy. and they felt the same way. everybody had headaches. but then after lepaz, where we were treated beautifully, we met these exquisitely well educated and thoughtful members of the universities. i gave some lectures, and that was very enjoyable, but then we set out for the rest of bolivia on our own and underestimated the level of underdevelopment in that country, and we were stranded in places for days with no heat and no sewage. at one point, we had to drive through a river to get to the airport. quite a raging river. so they weren't -- it was interesting for them to see. >> what does your husband do? >> he's also a professor at yale. >> at yale? >> yes. >> you teach what at yale? >> i teach international business transactions and a class called "contracts," and then a seminar that changes. it's currently called "globalization and law." sometimes it's called "markets, democracy and ethnic conflict." it's where i really get to know and learn from students who are from many different countries, and many of my stories and much of my information actually comes from students from different countries. >> malan, who was she? >> malan -- well, it's not her real name, but it's a friend of mine who is from mainland china, grew up, just left mainland china to marry a native new yorker, and she and i were at a manhattan dinner party, and shortly after september 11th, and this was -- well, her presence created a huge argument that was very striking for me, so i report it in one of my chapters. she asserted with great confidence that 99 percent of the people in china approved of and were happy about the september 11th attacks. and this prompted a furious outcry among the americans. one guest i guess properly asked, 99 percent? what kind of polster produced that statistic? it just seemed not quite right. her response was, let's not get hung up on numbers. face it. americans are hated all over the world and deal with it. and then this conversation deteriorated. >> you say in that chapter, america today has become the world's market-dominant minority. >> yes. >> that goes back to your theme about market-dominant minorities. by the way, what's the impact, in your opinion, of the market-dominant minority worldwide? >> well, market-dominant minorities, first of all, in the book, most of the book, the market-dominant minorities that i write about are within individual nations. so, you know, the whites in sim bab wa, whites in brazil, the crow asians in the form of yugoslavia. the impact of them, it's interesting. again, there's a lot of subtlety here. market-comdominant minorities ae often the principal engines of economic growth in a country. so their economic impact in some ways has been tremendous. they've generated tremendous economic growth over the years. on the other hand, their presence is a source of enormous instability, especially when you combine it with rapid h democratization, because the situation of where the rich people are not just rich but they are viewed as ethnic outsiders, stealing the nation's wealth, is just incredibly destabilizing. so i actually think that market-dominant minorities are -- i say that they're the achilles heel of free market democracy in the nonwestern world. to go back to your question about the united states, that's by analogy whereas in most of the book, i write about individual countries, i suggest by analogy that at the global level, you see a very similar phenomenon, basically the united states has become the world's market-dominant minority. and the analogy has its limit. obviously americans are not an ethnic group. we're a melting pot. and nor is there democracy at the global level. on the other hand, you see just the same kinds of dynamics. i mean, americans are 4% of the world's total population, and yet we wield, just like the chinese in indonesia or the lebanese in west africa, we wield just astonishingly disproportionate economic power relative to our numbers. and from china to the middle east to france, we are perceived, i think correctly, as the principal engines and principal beneficiaries of global can't capitalism. we dominate in many respects. for this, our extraordinary market-dominance and our seeming global visibility, we have earned the envy and fear and deep resentment of much of the rest of the world. >> two statistics you report. 1% -- in this country, bill gates, his income is equal to 40% of the lower income? 40% of the public in this country makes the same amount of money that -- or is worth the same amount of money that bill gates, one person, is worth. >> yes. i put that in because maybe not now but at various points in recent history, bill gates has controlled as much as 40% of the rest of the american population put together, and what's very interesting there is that americans don't hate bill gates. and they've never wanted to lynch him or confiscate his assets. in fact, when the government went after him, i think a poll that i report suggested that many americans just wanted him to be left alone so he could go bacback and make money. what's interesting is that that's because the united states does not have a market-dominant minority. i think it would be very different, and i actually propose this as a thought experiment, for americans to imagine what it would be like if bill gates and, you know, the 10 other wealthiest americans were all -- pick an ethnic group, arab or chinese or indian, and then further imagine that there were -- that the rest of the population, the majority, lived in trench poverty and had experienced no upward mobility for generations. i think that's the basic dynamic that characterizes much of the developing world. we have rags to riches stories here. if you ask a poor person in arkansas why their republican or like bill gates and their answer is that they think that their son could be bill clinton or bill gates. and that's just not the case in countries where the rich people , where all the wealthy people belong to a different ethnic group, a small ethnic minority. >> you tell your own story. when your parents came here, they had no money. >> that's right. >> so you give the background of your own sisters and all, and could you do what you've done as a family in any other country? >> well, in southeast asia, that's exactly what the chinese have done. so there, yes. the chinese were immigrants there, and pretty much became very dominant. >> could you do it in lepaz, bolivia? >> well, interestingly, there are -- the asian communities are fascinating. there's, for example, a very small but very successful japanese minority in peru. they're not market-dominant because i use a very strong definition. they don't control the economy, but they are disproportionately successful. >> could you do it in sierra leone? >> i think not. although again, i think i understand your question. i think the united states is very unique in the myth or the dream of upward mobility or rags to riches is something that is, i think, very unique to the united states. even in our relatively prosperous western european allies, that myth of rags to riches or the dream of rags to riches doesn't -- is not sorrow bust. i think people in the united states really believe in it. or a disproportionate number of americans really believe in it, and i think that's because of our history and reality in some sense. >> other statistics. there's 6 billion people in the world. you say that 1% of the people in the world control the same amount as 57% of the rest of the world. in other words, there's a better way of saying that. >> right. yes, so at the world level, you see what is going on, sort of analogous to what's happening within nations, and that is that global markets have done a lot of good. i mean, i'm very in favor of global capitalism. i think in some ways, some form of market-generated growth is the only hope for developing countries. but at the same time that you see an explosion of growth and what you also see is enormous inequalities of wealth, and this does have to do with the phenomenon of market-dominant minorities. sometimes all boats are lifted. in other words, everybody in the nation gets wealthy. i think a lot of the globalization debate kind of gets stuck in that. but all of the empirical evidence that i have carefully looked at from the world bank and elsewhere show that in many cases, global markets do lift all boats. but the phenomenon of market-dominant minorities becomes very important here because it's perception that's important. and if people watching their televisions and looking around them see that it seems like the only -- the sudden new crop of billionaires all seem to be lebanese or white or ethnic chinese, they don't rejoice in world bank surveys that show that their per capita income has increased by 2 cents a day. so it's a double-edged sword. >> i get the impression that you're not really big on tom friedman's theories of globalization. >> well, i actually -- i'm a great admirer of thomas friedman. >> "new york times" columnist. >> yes. i certainly read his columns and i think he's just a very thoughtful person, especially when it comes to the middle east. i do disagree with some of his recommendations. on the other hand, i think that he has changed his views after september 11th, so that our views are much closer. >> how did he change them? >> well, i think that in his book, "the lexus and the olive tree, h" he presented a picturen which markets and democracy working hand in hand would transform the world into, you know, peace-loving, prosperous nations filled with kind of happy cocitizens, and then in the process, not even subtest but quite explicitly extremism would be swept away. i think if you look at the history of the world in the last 20 years, just the opposite has happened. after the fall of the berlin wall, we have seen -- alongside the spread of markets and democracy, we've seen increasing ethnic conflict, a rise of militant islam, confiscations called for renationalization, and two genocides of magnitudes unprecedented since the nazi halholocaust. i argue that it's because whenever a market-dominant minority is present, markets and democracy are not mutually reinforcing, but on a collision course. >> couple of other statistics. 1 billion people in the world make less than $1 a day. >> yes. >> and a total of 2 billion or half of the world's population, 6 billion people, half of the world's population, which would be 3 billion, earn less than $2 a day. >> yes. >> how do we cope with that? >> i think that one of the great challenges going forward is to find ways to spread the benefits of global markets to more than just a handful of market-dominant minorities, you know, 1% here, 2% here. and their foreign investor partners. >> how do you do it? >> well, i actually propose -- i don't think there are any easy solutions, but i do think, again, in some ways learning from the example of the united states, i think the idea of stake holding, people rebel against markets and vote in anti--market leaders when they feel that they have no stake in the market. they feel like free markets benefit a different ethnic group or foreign investors. >> like venezuela. >> like venezuela. so the majority in free elections vote in an anti-market, anti- -- less leader whose policies on extremism, which has stunned americans, people can't understand how anyone can vote for that, but hugo chavez, the former paratrooper, swept to power in venezuela targeting the market-dominant minority in his country, basically the 20% kind of whites in quotations because this is a very artificial term for people of european features and european pretensions, but he targeted these oil-controlling olegarks, he called them, and he campaigned on a pro-poor, pro -- part oa. platform, the brown-skinned majority that lives below the poverty lines. he attacked the united states. he attacked the olegarks as squealing pigs and degenerates, and they voted for him. and it was very ethnic. it was explicitly ethnic. he called himself the indian from berinas. his biographer focused on his chinese-looking eyes and thick lips, and people said, we want to vote for somebody who looks like us, who's one of us. and the results, i think, have been disastrous. >> go back to that dinner party up in new york with your friend malan who is really somebody else. what was the end of the evening by the time the evening was over? did you agree on why people hate us? >> no. i've been in many arguments about this. it's obviously -- this was shortly after september 11th and emotions run very high, and she, i think, represented the position of many people of the developing world, which is while not -- certainly not necessarily condoning the attacks, she was nonetheless very sympathetic towards the terrorists and understanding of their motives for doing such a thing. and that particular conversation just degenerated into charges of hypocrisy against the united states and followed by, you know, on the part of the american guests, the usual, well, what country isn't self-interested. which country has done more for the rest of the world than the united states? >> do you think we have a claim as a country that we've done more for the rest of the world than anybody else? >> i haven't calculated the costs and benefits, but i think that, yes, i think the united states has done an enormous amount of good, and that's one of the tragedies of -- or the difficulties about market-dominant minorities. it's the same thing with the chinese in indonesia. the 3% population there in the 1980's were really responsible for jump-starting that economy, and they've generated a huge amount of growth, and yet the perception among the majority was that they were siphoning off the wealth of the nation, and they were actually hated and scapegoated. so i think there was a parallel there. >> picking up a quote out of the book, america is arrogant. those are in quotes now. hedgemonic and materialistic. >> these are not my views. i detail in the book, i think that when speaking about anti-americanism, it's important to be very careful, you know, the world is not a mono lytic place, and there are many different forms of anti-americanism, so i've written about there's what i call friendly anti-americanism, and i describe the reactions to the united states in countries like canada or great britain or australia, and this in some ways is just kind of playful resentment. i think that's where the materialistic quote comes from. and then i also discuss anti-americanism in europe, which is, i think, increasingly intense. >> there are an appalling number of australian websites filled with assertions that the united states deserves the attacks of september the 11th. why australia? >> well, this falls into the category of friendly anti-americanism actually. i had a lot of research assistance trying to assess the situation, and i think a lot of americans were surprised. again, these are not people who necessarily condone the attacks, but somehow understood it. and again, you know, the perception even in countries like australia or great britain is that the united states as the sole super power is just too powerful, and displays a lack of concern for other countries. >> one figure that again jumped out of your book, 790 mcdonald's in france? >> i think those actually a number have closed, but that's the statistic as of recently. >> and what is that? i mean, when you think about your whole discussion about globalization and all, is it working? >> well, i actually think that statistic shows the love-hate relationship that is characteristic of many market-dominant -- the reactions towards many market-dominant minorities. on the one hand, while people are criticizing the united states, many people from the developing world are just desperate to come here. in fact, a friend of mine put it recently that the view of americans held by many poor people in the developing world is basically americans get out and take me with you. and i think that's part of what's happening. now in france, it's a little bit different. i think that the french elites are concerned that american culture is having a disproportionate influence in france. >> are there market-dominant minorities in any european countries? >> presently, no. presently, no. like the united states, at the national level, none of the advanced western european countries or, for that matter, and i think this is very interesting, any of the east asian tigers have a market-dominant minority. so i think in some ways, that's sort of very telling that countries with a market-dominant minority have it much harder, that the tensions between markets and democracy which can be overcome in other contexts where ethnicity is not a factor becomes catalyzed. >> moving across the mediterranean, you have 5.2 million jews in israel, you say, and 220 million arabs in some 22 countries. >> right. >> what are you seeing there about market-dominant minorities? >> well, the middle east is a very -- it's a tricky region, and so much else is going on there. i mean, obviously there are religious factors, questions of colonialism, neocolonialism and land claims, so i am just observing one pattern among many, one dynamic, and that is that at sort of, again, the regional level, actually within the individual arab states, there are no market-dominant minorities, so again, those are countries without market-dominant minorities. but at the regional level, it's also very stark that israeli jews are kind of a regional market-dominant minority. they are just a tiny -- again, 5.2 million compared to over 221 million, and israel is viewed as almost like a western enclave. i think i have the statistics, the per capita income i believe is 17,000 compared to, i think, 7,000 in saudi arabia, and maybe 600 in egypt, maybe 300 in yemen. so it's extremely -- i wasn't aware of this until recently, that the -- i wasn't aware of the enormous economic disparate in that region. >> but how could 5 million people upset 220 million people the way they do? why are they so worried about this little tiny piece of land with lots of rocks when you've got so many others over there in such -- they have a vast amount of area compared to israel. >> well, again, this is a huge topic, and others more expert have written about it. i mean, there's a lot going on there with foreign policy and oil and corrupt, repressive regimes. one thing that i think is happening is that the leaders in many of the arab states to deflect criticism away from themselves are deliberately fementing antiisraeli sentiment to target the criticism elsewhere. throughout the middle east, the israeli jews are viewed, a very common way of describing them is as a western colonizing force. they're scribed as the last wave of western colonization and then backed by the united states. >> you talk about hollywood and television. why? >> well, these are more products of globalization and -- >> what image were you transmitting around the world? >> well, i think that people have a distorted view of the united states because what do they see? what is the united states for the rest of the world? they see our president, they see our super models, they i see our multinationals, and that's the slice of america they see. so on the one hand, hollywood creates this image of glamour, this idea that everybody here lives these lives of luxury when, in fact, many americans are not like that and work very hard, and so i do think that's part of the feelings of envy and desire that global markets perpetuate. >> you say that americans expect the rest of the world to adopt democracy overnight when we as a country didn't. >> yes. this is one of the misunderstandings that i frequently get about -- people ask me if i'm against anti-globalization and the answer is definitely not. i'm very much in favor of globalization. i don't know -- i think it would be futile to be against it. and they also ask whether i'm anti-markets or antidemocracy, and i am very much in favor of promoting markets and democracy globally, both of them, but there are many different versions for free market democracy and i think we are exporting the on