My Amazon Review of Raghuram Rajan's "The Third Pillar: How Markets and the State Leave the Community Behind"

Inclusive Localism

Raghuram Rajan, a University of Chicago finance professor, former Governor of the Reserve Bank of India, former Chief Economist at the IMF and the one who blew the whistle on the dangers embedded in the derivatives markets at a 2005 Federal Reserve conference has written an important book on the political crisis of our time. Unfortunately it is too long and too dry. That said he is spot on in noting how the state and the market has taken over the historical role of community in our society. No wonder folks are alienated.

He focuses in on the communities that have been left out of the global economy over the past fifty years from rural towns, isolated factory communities and the inner city. All of this being exacerbated by a flood of immigrants who put downward pressure on low end wages and upward pressure on rents and the geographic sorting of the global elites in very expensive neighborhoods and metropolitan areas making upward mobility difficult. Because the major urban centers have become so expensive Rajan focuses on place-based strategies as opposed to people-based strategies to uplift the left behind. He focuses on what he calls “inclusive localism.” By that he means that wealthy communities have to affirmatively loosen up their planning controls and society as a whole has to invest in infrastructure in poorer communities.

However this is all too easy to say and very difficult to implement. Wealthy communities are not opening their doors and for poorer communities to uplift themselves there has to be a requisite amount of indigenous leadership ready and willing to take charge.

My own view is that inclusive localism would be far easier to implement if we returned to the 100 year old ideology of the melting pot. I know this is not politically correct, but it largely worked for white America and probably can work for all of America today. If we are to have inclusive communities there is going to have to a lot give from all corners. It sort of comes down to that old saying of “think globally and act locally.” Further it would help if we had a program of national service where young people of different backgrounds are forced to work together on common goals and it would also help if the elite universities radically increased their class size to accommodate more students.

Rajan closes the book with his global solution to today’s economic problems. To me that is a bridge too far and ought to be the subject of a different book.

For the full amazon URL see: https://www.amazon.com/review/R1XE3YT1K4PGS9/ref=pe_1098610_137716200_cm_rv_eml_rv0_rv