## Book Review: The Third Pillar by Raghuram Rajan – IMF F&D ## Source details **Canonical URL:** [Book Review: The Third Pillar by Raghuram Rajan – IMF F&D](https://www.imf.org/en/publications/fandd/issues/2019/09/book-review-of-the-third-pillar-by-raghuram-rajan) ## Other formats - [Markdown version](/en/publications/fandd/issues/2019/09/book-review-of-the-third-pillar-by-raghuram-rajan/index.md) - [Structured JSON version](/en/publications/fandd/issues/2019/09/book-review-of-the-third-pillar-by-raghuram-rajan/index.json) - [Bundle manifest](/en/publications/fandd/issues/2019/09/book-review-of-the-third-pillar-by-raghuram-rajan/bundle-manifest.json) ## Bibliographic details - Authors: PRAKASH LOUNGANI - Published: September 1, 2019 --- ### Review metadata and framing - Reviewer: PRAKASH LOUNGANI; director of the applied economics master’s program at Johns Hopkins University. - Publication: F&D Magazine — Fixing Capitalism. - Date: September 2019. - Read time indicator on page: Less than a minute(0 words) Read. - Book cited: The Third Pillar: How Markets and the State Leave the Community Behind, Penguin Press, New York, 2019, 464 pp., $30.00. - Reviewer note: Opinions expressed are those of the author; they do not necessarily reflect IMF policy. ### Core thesis summarized - Rajan argues for restoring the “third pillar” of society: the community, defined as a social group residing in a specific area that shares government and often a common heritage. - Markets and the state remain indispensable, but when markets, the state, and the community are “appropriately balanced” … “society has the best chance for providing for its people,” particularly those who lose out from the effects of trade and technology. - Power should be devolved from global and national levels to the community. ### Diagnosis of problems with current balance - Rajan highlights harms from international trade and technological change: - US job loss from increased foreign competition has contributed to lowering the life expectancy of middle-aged non-Hispanic white males. - Rajan’s rhetorical framing: “It is as if ten Vietnam wars were simultaneously taking place, not in some faraway land, but in homes in small-town and rural America.” - Historical perspective: - Markets and the state overcame feudal communities that provided stability but left most in abject poverty. - Modern communities can also be harmful by erecting walls; overemphasis on tradition and fear of strangers and new ideas can leave people “trapped by the past.” ### Prescriptions and implications - Restore and rebalance the role of community alongside markets and the state to better support people hurt by trade and technology. - Policy implication: provide mechanisms that let communities play a stronger role in economic and social life, including devolved power and local responses to dislocation. - Labor and technological change outlook: - As machines and robots begin to produce more goods and services, human work “will center once again around inter-personal relationships.” - Rajan suggests communities could become “the workplace of tomorrow.” ### Author background and prior warnings - Rajan has been a consistent critic of unfettered financial globalization despite being a believer in free markets. - Earlier work and statements: - In Saving Capitalism from the Capitalists he argued victims of competition should get help: “Markets need a heart for their own good.” - In a 2005 speech he warned that excesses of financial globalization raised the odds of a “catastrophic meltdown,” for which Larry Summers rebuked him as “slightly Luddite” and “largely misguided.” - The global financial crisis and recent discontent with globalization are cited as validating Rajan’s earlier warnings. *IMF F&D Magazine — Book Review by PRAKASH LOUNGANI, September 2019.* --- ## Content in this bundle - **استعراض الكتب** - [استعراض الكتب (Markdown version)](/-/media/files/publications/fandd/article/2019/september/ar/book.pdf.md){rel="alternate" type="text/markdown"} - [استعراض الكتب (PDF)](/-/media/files/publications/fandd/article/2019/september/ar/book.pdf){rel="external" type="application/pdf"} - **Book Review: The Third Pillar by Raghuram Rajan – IMF F&D** - [Book Review: The Third Pillar by Raghuram Rajan – IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2019/september/book-review-of-the-third-pillar-by-raghuram-rajan.pdf.md){rel="alternate" type="text/markdown"} - [Book Review: The Third Pillar by Raghuram Rajan – IMF F&D (PDF)](/-/media/files/publications/fandd/article/2019/september/book-review-of-the-third-pillar-by-raghuram-rajan.pdf){rel="external" type="application/pdf"} - **Críticas de libros ● Finanzas y Desarrollo ● Septiembre de 2019** - [Críticas de libros ● Finanzas y Desarrollo ● Septiembre de 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/september/es/book-review-of-the-third-pillar-by-raghuram-rajan.pdf.md){rel="alternate" type="text/markdown"} - [Críticas de libros ● Finanzas y Desarrollo ● Septiembre de 2019 (PDF)](/-/media/files/publications/fandd/article/2019/september/es/book-review-of-the-third-pillar-by-raghuram-rajan.pdf){rel="external" type="application/pdf"} - **Comment remédier aux maux du capitalisme** - [Comment remédier aux maux du capitalisme (Markdown version)](/-/media/files/publications/fandd/article/2019/september/fr/book-review-of-the-third-pillar-by-raghuram-rajan.pdf.md){rel="alternate" type="text/markdown"} - [Comment remédier aux maux du capitalisme (PDF)](/-/media/files/publications/fandd/article/2019/september/fr/book-review-of-the-third-pillar-by-raghuram-rajan.pdf){rel="external" type="application/pdf"} - **Книжное обозрение – Финансы и развитие – сентябрь 2019 года** - [Книжное обозрение – Финансы и развитие – сентябрь 2019 года (Markdown version)](/-/media/files/publications/fandd/article/2019/september/ru/book-review-of-the-third-pillar-by-raghuram-rajan.pdf.md){rel="alternate" type="text/markdown"} - [Книжное обозрение – Финансы и развитие – сентябрь 2019 года (PDF)](/-/media/files/publications/fandd/article/2019/september/ru/book-review-of-the-third-pillar-by-raghuram-rajan.pdf){rel="external" type="application/pdf"} - **《第三支柱：社群是如何落后于市场与国家的》 - 书评 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊** - [《第三支柱：社群是如何落后于市场与国家的》 - 书评 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊 (Markdown version)](/-/media/files/publications/fandd/article/2019/september/zh/book-review-of-the-third-pillar-by-raghuram-rajan.pdf.md){rel="alternate" type="text/markdown"} - [《第三支柱：社群是如何落后于市场与国家的》 - 书评 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊 (PDF)](/-/media/files/publications/fandd/article/2019/september/zh/book-review-of-the-third-pillar-by-raghuram-rajan.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2019/09/book-review-of-the-third-pillar-by-raghuram-rajan_