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

by Raghuram G. Rajan

Many towns across the developed world have charming streets that, with a little sprucing up, become ‘olde towns’ full of luxury shops and pricy restaurants selling a collective experience to tourists. Other communities have ‘hard’ assets such as power stations producing cheap power without much demand, plentiful cheap land, old industrial buildings that can be repurposed as space for start-ups or loft residences, biking and hiking trails for the health-conscious, and so on. Sometimes the assets are human. The community may have rich entrepreneurs or philanthropists who might be looking for ways to give back to the community that made them. Underutilised well-educated or highly skilled workers might already exist, or might like to return to the community if they see opportunity. With the right vision, even young unskilled workers, capable of being trained and willing to start with moderate wages, are assets. Often the assets are organisations such as a government or defense establishment, a large locally headquartered firm, a hospital, good schools, a community college, or a university – after all, Daniel Patrick Moynihan once quipped, ‘If you want to build a great city, create a great university and wait 200 years.’11 When strong organisations exist in the proximity of declining communities, they typically are shielded off from it – else the community would typically not be declining. One of the tasks for the team engaged in revival is to find ways to bring down the shields.

Ide ntifying community assets