The Third Pillar: Why strong communities make economic sense

Book review: Raghuram Rajan looks at the role of community in protecting liberal democracies

Raghuram Rajan argues that an equilibrium must develop between the State, markets and community to allow the preservation of liberal democracies. Photographer: David Paul Morris/Bloomberg via Getty Images

Raghuram Rajan argues that an equilibrium must develop between the State, markets and community to allow the preservation of liberal democracies. Photographer: David Paul Morris/Bloomberg via Getty Images

In 2005 a prominent economist warned of an approaching economic crisis. Raghuram Rajan, who then held the role of chief economist of the International Monetary Fund, was widely criticised for his comments. To describe him as prescient would be a dramatic understatement.

Only time will allow us to know whether his new book, The Third Pillar – The Revival of Community in a Polarized World, will demonstrate similar prescience.

In this work he contends that three pillars support society – the State, markets and community – and that an equilibrium must develop between all three to allow the preservation of liberal democracies.

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