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The Third Pillar: How Markets and the State Leave the Community Behind
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The Third Pillar: How Markets and the State Leave the Community Behind

3.85  ·  Rating details ·  771 ratings  ·  101 reviews
From one of the most important economic thinkers of our time, a brilliant and far-seeing analysis of the current populist backlash against globalization.

Raghuram Rajan, distinguished University of Chicago professor, former IMF chief economist, head of India's central bank, and author of the 2010 FT-Goldman-Sachs Book of the Year Fault Lines, has an unparalleled vantage poi
Hardcover, 434 pages
Published March 7th 2019 by William Collins (first published 2019)
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The Third Pillar is a well-written book that makes you think. Yet, its framework is relatively weak and the solutions are impractical. I think the book’s thesis will be repeatedly quoted in the academic circles for coming decades. With Dr Rajan as the champion, the theory could even turn mainstream in economic classes in the best case. That said, let me focus on the issues I have with the book, the framework and their conclusions.

Dr Rajan is a celebrity economist, a renowned central bank governo
Apr 24, 2019 rated it it was amazing  ·  review of another edition
I was pleasantly surprised by this book. I had read his earlier work - Fault Lines - and while I enjoyed it I also thought it could have had a clearer voice and been easier to read and follow. This book is superb - interesting, thoughtful, and clear.

There is an entire literature on what might be called global political economy that covers the current state of macroeconomics, current political messes (such as the US elections, etc.), global trends in the state of work and employment, trends and t
Mar 04, 2019 rated it it was amazing  ·  review of another edition
It was literally a dissertation! Making the state (politics and governing), markets (economy and industries), and community (We the people) as three pillars, RR goes through an exhaustive analysis of the past and present impacts of these three pillars on one another. In particular, he provides historical context with examples from the long past such as Arthashastra, and how markets, community, and states have been functioning. He also provides context in terms of research findings from a wide sp ...more
The author was interviewed on the Freakonomics podcast on 6-Feb-2019 in an episode titled This Economist Predicted the Last Crisis. What’s the Next One? and made a case that aligns intriguingly with Patrick Deneen's Why Liberalism Failed, along with other thoughts I'd been having since reading starting Putnam's Bowling Alone: The Collapse and Revival of American Community.

Update, January 2020 —

The Economist cites the author in their article, Free exchange Economists grapple with rising Amer
Apr 04, 2019 rated it it was ok  ·  review of another edition
Rajan wasted a good thesis here. The book started off well, the introduction was great, he laid out an interesting (if not exactly novel) proposition, but then veered off in all directions. I persisted, hoping that everything would somehow connect at a later point, but it never happened.

There are several history chapters at the beginning that describe the origins of Western political systems. But every adult that picks up this book is already familiar with this history. Unless these chapters ar
Haaris Mateen
Around the time of independence, Gandhiji and Babasaheb Ambedkar clashed over the kind of structure the new nation of India would possess. Gandhiji believed in what would today be called a version of localism as he wanted most of the powers of the state to be vested with villages with the federal government having minimal interference. Ambedkar, having lived a life full of discrimination and social exclusion, did not agree. He saw villages and local communities as regressive centers of oppressiv ...more
Laurent Franckx
In Europe, the name of Raghuram Rajan probably doesn't ring a bell to many people, but this Chicago economist (and former governor of the Reserve Bank of India) became relatively famous in the US when, in 2005, he pointed to the systemic risks that were building up in the financial system. Not only did this prove very prescient (even if nobody took him seriously), but this book is actually building on one the arguments he made back then: that governments were actively promoting risky mortgages t ...more
Harsha Varma
This has been an engaging book to read. The gist is simple: Technological revolution has been largely disruptive. Wage premiums for those with better (read technical) capabilities increased significantly with the best employed by superstar firms in winner take most markets that dominate a number of industries. Concentration leads to a greater distribution of wealth to a select few, widening disparity in wealth. This has put pressure on upper middle-class parents to secede from economically mixed ...more
Aug 11, 2019 rated it liked it  ·  review of another edition
This book establishes a great context to how a balanced society is the outcome of three pillars - the 'state', the 'market' and the 'community'. At various points of time in history, while the community was of relevance, it has given way to a more powerful state and market in recent times leading to a weakened community. While the historical evolution of these pillars across geographies is presented very well, along with many fresh insights into how to think about the globalized future of nation ...more
Ashutosh Dwivedi
Rajan does a great job of trying to explain the rise of populism in the world by delving into the history of the rise of the markets, states and communities. Starting right from Stuart England where feudalism started to see its end till the modern era, he documents quite like a thesis how all these 3 systems interplayed and evolved.

In the 2nd part, he deals with the current wave of populist nationalism and talks of why it has become popular and its dangers while oft citing from multiple studies
Although the Professor claims this is not a textbook, it reads like one to someone who is decades away from reading them. I appreciated the history of how state/market/community has evolved in different situations. His prescriptions for the future are less convincing. Some of them make me wonder if he truly is an economist.
Nov 13, 2019 rated it really liked it  ·  review of another edition
The book presents a coherent historical and present day analysis of markets and state, while leaving "community" as a hand-wavy notion. Sometimes community just seems to represent "local", local markets for goods and services, or local government. ...more
Manasvi Karanam
* Well researched book. Neatly explains the three pillars - state, market and communities. Gives a good history of how they emerged and how historically the society took measures to restore balance amongst them.

* Book has been sprinkled with anecdotes which explain how the empowering the communities have resulted in keeping the state and markets at check. The examples are simple and easy to understand and illustrate Rajan's point well

* The book spends fair amount of time trying to explain
Cary Giese
Jun 24, 2019 rated it it was amazing  ·  review of another edition
First, the author never in his book refers to anonymous persons as he, throughout the book his reference is to she! Impressive and thoughtful of him!

The book attempts to describe the evolution of the three pillars of world order. The nation state, the markets and the community (people)!

Traditionally community and markets were close and coexisted with tributes paid to governments. The community relationships were symbiotic and interdependent and well defined, now comes changes in property owners
Dr. Rajan deconstructs the modern socio-political life along three pillars - State, Markets and Community and goes on to explain how a 'power-balance' between the three is a necessity for a stable system.

He goes on to explain and demonstrate how the central pillars of our society are out of balance today. Rising inequalities and growing class resentment are undermining communities around the world. This is fertile ground for populist insurgents. But their ideal of state-backed nationalism doesn’
Ankur Mishra
Mar 19, 2019 rated it really liked it  ·  review of another edition
The Book is built upon the premise of exploring the inter relatedness of the Community, Markets and the State in modern economies. The chronic issues of inequality, unemployment and growth slowdown as well as issues such as climate change and community displacement are analyzed from the standpoint of 'Inclusive Localism'. Simply put, Inclusive Localism is postulated to be a self-correcting postulate that is more sensitive and keenly attuned to the blind spots of the traditional capitalistic econ ...more
Warren Mcpherson
Jul 09, 2019 rated it really liked it  ·  review of another edition
Shelves: ideas, people-at-work
A thought-provoking review of the relationship between community, markets and the state. The author skims through some familiar history giving a compelling perspective. There are many disparate ideas that are explored. They are probably not all necessary and a better job of editing would likely have improved the book in some ways. But each little niggle was carefully considered. For instance, the author makes a good case for the proposition that international regulations tend to be quite undemoc ...more
Nikhil Kumar
May 26, 2019 rated it really liked it  ·  review of another edition
This book presents a historical perspective into the dynamics of flux between the pillars of society - community, state and markets. It analyses the balance of power between them in the context of changing technology and advocates for revival of the 'community' which has suffered neglect at the hands of the market and the state. While the book presents many fresh insights into how to think about the globalized future of nations, communities and markets, it offers precious little in terms of real ...more
Sunil Kumar
Aug 13, 2019 rated it really liked it  ·  review of another edition
A must read for all the students of politics, economics or public policy or anyone curious enough.
Sean Finn
Exhausting reading
Sudharshan Viswanathan
This book is a good read for anyone with little prior understanding of how economies came to be, and what is to be made of the subject Economics. Suffice to say, while the study of the subject itself is around 200 years old - even the notions that are embedded within the subject are significantly more recent and only less than a 1000 years old.
The book does a good job of laying the story of how capitalism evolved, mostly woven around the British empires of the previous millennium. The concepts
The British vote to leave the European Union and the election of US President Donald Trump in 2016 were shocks which many have yet to recover from. Some continue to fight against both. Only now are we starting to grope, seriously, towards an understanding of why these events occurred. The Third Pillar by the University of Chicago’s Raghuram Rajan is one of the better attempts.

The three pillars Rajan refers to are, broadly, the state, the market, and the community. More or less, these refer to wh
Radhika A R
Why has a wave of populism overtaken countries across the world? How should government handle the grievances against globalisation and immigration? How do we prepare for a world where jobs as we know them will undergo a significant shift?

Raghuram Rajan is known for spotting fault lines that are 'invisible' in plain sight. After his acclaimed books on capitalism and the cracks within, he now turns to a new area of focus: flashpoints in society wrought by the shifts in people, markets, technology
Nov 13, 2019 rated it liked it  ·  review of another edition
Hooter: How modern day economies have the state and the markets playing against the community largely thanks to disruptive technologies and the reasons behind it.

The manner in which the content is structured makes for easy fluid reading for a heavy economics thesis but Raghuram Rajan is very crisp and eloquent with how he shares his thoughts hitting home on the divergence of Markets , the State and we the community. He derives from history various factors that lead what we see today and provide
Wiom biom
Dec 19, 2020 rated it really liked it  ·  review of another edition
The Third Pillar is an insightful and engaging analysis of the social and economic problems of our time by a pretty perspicacious writer who spans the worlds of policy and scholarship, and who, according to a Harvard professor, has been consistently right about the wrong turns the world economy has taken. Being the work of someone who is chiefly a technocrat (former governor of the Reserve Bank of India, former chief economist at the IMF), Rajan's writing is admittedly not the most eloquent but ...more
Pragati Kulshrestha
For a brief while, the clean shaven, youthful and ever-ready-for-a-byte Raghuram Rajan was the poster boy of Indian financial journalism. His abrupt resignation as the RBI governor catapulted his columns and books onto the top of the reading list. If the expectation is of a tell-all tale about the shenanigans in the stately corridors of the RBI’s manors in Mumbai and Delhi, Rajan barely touches on that.

In this tome, he acquires the professorial avatar to which he has retreated after quitting the
Anders Moeller
Not particularly well written or illuminating. In spite of its attempt to look at a general history of capitalism (markets), States and communalism, it is extremely euro-centric and fails to add anything new or illuminating to the conversation. I got about 70% through the book before giving up; I only held out because I wanted to see what his proposed solutions are (i.e. how to bring in/back the community), but the recommendations were both high-level to the point of stating the obvious and ofte ...more
Vikash Anand
Aug 14, 2019 rated it it was amazing  ·  review of another edition
The technological advancement has significantly enriched humanity over the last 250 years. Although the impact of technological advancement varies from country to country, but still the impact is significant across countries ranging from developed to under-developed countries. The advancement has almost eradicated hunger, although the problem is that problem of over nutrition is becoming more and more widespread rather than malnutrition.

Raghuram Rajan in the book The Third Pillar focuses on the
Sajith Kumar
After a decade since the economic recession of 2007-08, the world economy is worried by trade wars and the prospect of slowdown in leading developing economies. A wholesome analysis of the development and future path of the world economy is hence warranted by circumstances. And there is nobody better suited to do it than Raghuram Rajan who is a financial bigwig serving the IMF and US academia. This engineer-turned-economist attempt a survey of human societies by identifying the three pillars on ...more
Steve Watson
"Populism, at its core, is a cry for help, sheathed in a demand for respect, and enveloped in the anger of those who feel they have been ignored." (217)

Rajan sees the rise of populism throughout the world, and catalogs some of the anger and neglect behind it - growing income inequality, fears of rapid change, and especially strong states, strong markets, and weak local communities. Important decisions and trends that impact people's perceptions of themselves and their world, as well as people's
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Raghuram Govind Rajan is a world-class Indian economist who has also served as the twenty-third Governor of the Reserve Bank of India. He also serves as Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. Rajan is also a visiting professor for the World Bank, Federal Reserve Board, and Swedish Parliamentary Commission. He former ...more

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73 likes · 14 comments
“Society suffers when any of the pillars weakens or strengthens overly relative to the others. Too weak the markets and society becomes unproductive, too weak a democratic community and society tends toward crony capitalism, too weak the state and society turns fearful and apathetic. Conversely, too much market and society becomes inequitable, too much community and society becomes static, and too much state and society becomes authoritarian. A balance is essential!” 2 likes
“In the early 1980s, the Reagan administration tasked the National Commission on Excellence in Education to assess the quality of schools. In its widely read report entitled A Nation at Risk, the commission asserted, “If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war. As it stands, we have allowed this to happen to ourselves.” It deplored “the rising tide of mediocrity” in schools, as “more and more young people [graduated] from high school ready neither for college nor for work.”27 Much of this is still true today.” 0 likes
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