An Economist’s Argument for Preserving Communities

These threads dissolve in the hundreds of pages of vaguely sketched economic history that follow. While ably describing how both a growing market and a growing state have eroded the community’s relevance and vitality over time, Rajan gradually redefines the third pillar from “communities whose members live in proximity” to merely democracy or the “voting public.” An intrinsically valuable and varied local institution congeals into a homogeneous tool for ensuring that the market and state behave.

When genuine community does make a return in the book’s section on prescriptions, Rajan sacrifices it willingly. Having shown how the state has weakened community by seizing the role of safety net, he nevertheless wants to go further in that direction. America’s variety of antipoverty programs, “strung together with the help of the state government, the local government, private efforts and charitable funds” (in other words, “community”), are “inadequate,” he says, calling instead for “a basic level of unconditional federal economic support” along with universal health care. On one page, Rajan recommends that “powers should stay at the most decentralized level consistent with their effective use,” but on the next he declares that “when inclusiveness goes up against localism, inclusiveness should always triumph.”

Rajan’s real aim seems to be movement “toward one borderless world,” with stronger communities a perhaps helpful means to that end. “A central concern in this book,” he writes, “is about the passions that are unleashed when an imagined community like the nation fulfills the need for belonging that the neighborhood can no longer meet.” He recalls wistfully the days when “technocrats … did not have to spell out these arguments to the wider public.” Sure, “the elite did not engage” in any debate “as they abandoned the integrated community,” but he finds it “hard to fault their choice.” After all, “the meritocratic markets now demanded it.”

Article source: https://www.nytimes.com/2019/02/27/books/review/raghuram-rajan-third-pillar.html?emc=rss&partner=rss