I just finished reading the book “The Third Pillar” authored by Raghuram Rajan. As expected, the book has enriched me with significant insight into the subject. I am here just to give you all a glimpse of the book. It revolves around three pillars—state, market and community, and “community” is the third pillar. Rajan’s sole intent in writing this book is to explain the disturbance, harmony, and cooperation among these three, and make the readers see the solution for global problems in balancing of these pillars.
The book starts with a case study of a locality in Chicago which transformed itself from slummy habitations, unhygienic conditions, and crime indulgence to a well-settled area with prosperity, values, and good governance. This was possible through the cooperation and willingness of its people. Rajan explains the meaning of state, market and community and traces the historical events which brought these entities into existence in medieval Europe and the U.S.
The book sheds light on the past circumstances, which made the formation of state and its interaction with market inevitable. The community’s involvement in state affairs to keep an eye on the market also comes into the picture. In this way, the book has opened an arena for discussion on the necessity and importance of balancing these three pillars to build a prosperous and peaceful world.
This book will give you a glimpse into the past 100-200 years of the U.S. and Europe with respect to intermittent disruptions followed by harmonious cooperation among these pillars. The book shows how the dominance of state or market or their cronyism had harmed society in the past, and how the community’s participation had led to reforms. Rajan has also counted the past events of China and India, and how both of them have passed through this complex web of these three pillars.
Through his deep understanding, case studies and references to concepts of sociology and economics, he proved that community should be empowered enough by the state and market to ensure participative democracy and inclusive development. He provides solutions and means to be adopted by the community to ensure balance among all pillars.
Rajan even extrapolates the community at the global level and advocates adequate participation of all nations in international bodies, strategic decision-making, etc. He explains this by detailing the current global events, global trade trends and global issues such as intellectual property rights, labor regulations, and immigration.
In the end, he gives a beautiful concept of “inclusive localism”. In this, he supports solidarity among locally-settled households, which are tied together in a garland of national laws, values, and common market. He strongly assures that such a blend of localism and nationalism would build a developed world.
The book provides enough background for even a layperson like me to understand technical concepts. Rajan encapsulates everything from problems, their root causes, and solutions. It makes the book a complete package for readers who want to understand the current global and national events from the perspective of the three pillars.