The Third Pillar: How Markets and the State Leave the Community Behind
"From one of the most important economic thinkers of our time, a brilliant and far-seeing analysis of a critical moment in history that could decide the future of economic progress.
RAGHURAM G. RAJAN – distinguished University of Chicago professor, former chief economist of the International Monetary Fund, former Governor of the Reserve Bank of India, and author of the widely acclaimed Fault Lines – has an unparalleled vantage point on the socio-economic consequences of globalisation and their ultimate effect on politics. In The Third Pillar, he offers a magnificent big-picture framework for understanding how these three forces – the state, markets and communities – interact, why things begin to break down, and how we can find our way back to a more secure and stable plane.
The ‘third pillar’ is the community we live in. Economists all too often understand their field as the relationship between markets and the state, and they leave squishy social issues for other people. That’s not just myopic, Rajan says, it’s dangerous. All economics is actually socio-economics – all markets are embedded in a web of human relations, values and norms. Rajan presents a way to rethink the relationship between the market and civil society, and argues for a return to strengthening and empowering local communities as an antidote to growing despair and unrest.
The Third Pillar is a masterpiece of explication, a book that will be a classic for its offering of a wise, authoritative and humane understanding of the forces that have wrought such a sea change in our lives.
Advance praise for The Third Pillar
A strikingly insightful analysis of the penalties of neglecting the critically important role
of community, by concentrating too much on the perceived efficiency of the markets and
the state. Rajan brings out loudly and clearly why this imbalance needs urgent correction.
– Amartya Sen, Nobel Prize Winner in Economic Science
My parents lived through the Great Depression, the rise in Fascism and World War II. I
thought I was brought up in a world organised in a fundamentally different way. I was
wrong. We all need to start thinking about this issue right now and this book is a place
– James A. Robinson, co-author of Why Nations Fall
The Third Pillar offers an insightful perspective into our most pressing challenges. This book
offers a way forward for all of us. Essential reading for anyone interested in how economies can and should function.
– Linda Yueh, author of The Great Economists
Few economists span the world of policy and scholarship with such distinction, and fewer
still have been so consistently right about the wrong turns the world economy has taken.
Rajan presents a bold, original version that significantly advances our contemporary
debate on the ills of democracies and movies it onto new terrain.
– Dani Rodrik, Professor, Harvard University and author of The Globalization Paradox
Raghuram Rajan has done it again. Fresh, insightful and engaging, The Third Pillar offers a
brilliant reckoning with one of the today’s most important and potentially crippling challenges.
– Mohamed El-Erian, Author of When Markets Collide and The Only Game in Town
The Third Pillar is a must-read for everyone seeking a way to preserve democracy as we’ve
– Janet Yellen, Chair of the Board of Governors of the Federal Reserve 2014–18
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