Why we need to strengthen communities

Chicago Booth’s Raghuram G. Rajan discusses his 2019 book “The Third Pillar”

Feb 25, 2019

Chicago Booth’s Raghuram G. Rajan explains how his 2019 book “The Third Pillar: How Markets and the State Leave the Community Behind” makes the case for giving more power to local communities. “What happens when one or two pillars get overly strong is that it creates an imbalance,” Rajan says. “And that imbalance has to be rectified either by strengthening some other pillar or by weakening the existing pillars.”

1. How the tech revolution has left communities behind

Rajan explains his idea that the three pillars of society—the economy, the state, and the community—are in imbalance.

2. How to empower communities

Rajan explains his idea of “inclusive localism” and discusses how Chicago’s Pilsen neighborhood turned itself around.

3. Why capitalism requires free higher education and universal healthcare

Rajan argues that for workers to participate in capitalism, governments may need to provide tertiary education and universal healthcare.

4. Why India’s government needs to focus

Rajan, who served as Governor of the Reserve Bank of India from 2013 to 2016, discusses how Indian policy makers try to do too much with too little capacity.