This is a book on Communities. That is a matter of celebration in itself. At last, we have a multi-faceted modern academic writing a thesis on Communities. That it is an economist trying to factor in Community into the system of economics is a bigger reason for joy. That the writer is Indian writing should have been a matter of greater significance.
The subject is so fundamental to India as a civilization. But we suspend our stand on this for some time. Nevertheless, the writer is somebody of Raghuram Rajan’s stature. This is not any less important.
To begin with a positive, the book has its heart in the right place. Rajan identifies the weakening of the Community as the most crucial development of our times. It is an important reason for imbalance and inequality in the economic world.
For this, he deserves special credit. Arguably, he is the first Liberal Economist of great stature to recognize the role of Communities in such proportions. He elevates it into the theoretical framework of academic sociology and economy in a formal way.
Let us begin with a small summary of the book. We shall place all analysis and appreciation in the context of this summary. Rajan makes the following claims in the context of the Economy.
- There are three Pillars that support Society – Community, Markets, and the State.
- A great dynamic of economics is created by the pillars of Markets and the State.
- Community is the critical third Pillar in realizing a balance in this dynamic of economics. It ensures an Equitable/Fair Economy along with Economic Progress and Security. These are the three expected Outcomes of the Economy.
- Any imbalance in one of three Pillars results in one of the Outcomes for the society suffering.
Rajan acknowledges that these Pillars have the ability to influence each other and even partially control. But he largely visualizes the three Pillars as each being independent of the other. He does not explore other possible structural arrangements/relationships between them. As an aside, What if Markets are merely a virtual entity shaped by multiple communities?
What if they were the result of negotiated incremental action between Communities over the years? What if they were not an independent establishment? What if the state does not guarantee secure independence for the Markets? What if they were subservient to the Communities they serve completely?
Yes to these questions leads to very different realities with different implications. Rajan does not go into those uncharted territories. We shall suspend this for a while and return to this towards the end.
Let us return to the core concern of the book.
The book is organized at three levels
- The Emergence of these three Pillars of Economy
- The Economic Imbalance of Today
- Restoring the balance by strengthening the participation of communities in Economy
Let us now explore each section.
The First Section: The Emerging of the Three Pillars
This section is a lengthy narrative on how the three Pillars have emerged. It does not aim to be comprehensive or technically perfect. It aims to build a world view of this emergence in essence. It identifies critical moments in society concerning the three Pillars.
However, it is way too simplistic. It paints all the world in one single evolution narrative. At one level, the subject of Community stretches out from the domain of pure economics to sociology and history. When a pure Economist writes about it, one needs to factor in certain lightness in the discipline. There is a deeper concern, though.
The narrative seems to be constructed to present a convenient hypothesis towards the end. Let us now identify significant gaps in this narrative
1. The Eastern Civilizations, India in particular, is wholly absent from the narrative.
- In this omission, the book misses an opportunity to explore the great evolution of the Economy and Community in India. It thrived for a few millennia until the British snuffed life out of it in the last 300 years.
- His point of how tribal communities functioned is way too simplistic and extremely disappointing for an intellectual of his stature.
2. His view is that the Market separated from the community is purely a western reality of arguably recent times. It is the result of aggressive driving by the modern western state, a result of philosophies that emerged in the west.
- In India, in spite of Nehru and later capitalism, the state has never had absolute control over the market. Neither has the community withdrawn itself from it completely. The relationship has always remained complex.
- In the influence and force of western models, there is a partial separation of the Community from the Market. But it continues to be significantly invested in without a formal acknowledgment.
In summary, the complexity of this relationship is wholly absent in the book, without even an acknowledgment.
Of course, we cannot deny that Communities have been pushed aside. Neither can we assert that Communities continue to play an equal role. It is true that the enormity of Markets and States in the modern era have subdued and confused the Communities. Some rights have been simply taken away, needlessly, and weakened their functioning.
For instance, Communities cannot establish schools for education according to their world view with ease. What strong role can they play in the Economy without such basic freedom? What one objects to in this book is the failure to lay the blame at the right place while recognizing the diminished role of the Community.
The real culprit is not only the State. It is the very philosophy driving Modern State that has weakened the Community. On the one hand, we continue to celebrate and praise Modern Liberal Philosophy all the time. On the other, we lament the loss of the Community. There is a grand contradiction here.
The modern Liberal States fundamentally aim to transform and change societies. They do not want communities on the ground to have absolute freedom to run their affairs. For instance, Modern Liberate States seek to regulate Education so that all communities conform to the desired ideology of Modern Liberalism.
They do not want Communities to shape a different ideology. They desire to take away that autonomy from the Community. Progressively, this taking away of autonomy of the Community has reduced the community into a heap of individuals.
Modern State has instilled a lack of trust in the Community. This has led to inactivity within the Community and dependence on the State to deliver certain services. Hence, we cannot blame the decadence of the Community to merely an erring State.
This is not a result of merely the authoritarian, greedy State wanting control. It is the very Liberal State wanting to transform societies into the modern world that has led the Communities into this state of decadence. The book fails to indulge in elevating the inquiry into the philosophical roots of the decadence of the Community. One wonders if it is so because it draws uncomfortable conclusions for Rajan.
Nevertheless, the best part of this section is Rajan recognizing why the Community still matters. Real-life is still lived in a community. An isolated individual is weak and insecure. If that insecurity drives the economy, then creating equity and balance in distribution is never going to be easy. Much of what Market runs outside of the community today could, in reality, be dealt with in the community even if that means nothing to the GDP numbers.
Rajan presents Case Studies of success and impact. Sadly once again not a single Case Study comes from India. Rajan recognizes the need for both Centralization and Decentralization. But he deals with it too in an ad hoc fashion and fails to elevate it into a proper hypothesis.
It has remained at the level of Centralization equated to State and Decentralization equated to Community. There is a healthy interaction between the two. Each pushes the other in a sort of their sinusoidal manner. They are part of a larger whole and a philosophy of what must be centralized and decentralized plays a role.
At a certain level – Economics, Sociology, and Political organization goes together. Economics cannot be discussed in isolation without considering Justice and Security. They are three chief concerns of any political authority. In summary, there is visualized as a part of the whole is totally absent from Rajan’s imagination in the book.
In Rajan’s world view, the Community is merely viewed as a pillar for the economy. There is no greater central role imagined for the Community. It is as though the purpose of life is economic development and growth. What if the purpose of life is to live a certain way imagined by a community?
What if the economy is subservient to that vision? Markets are then subservient to the community. At a higher level, they may be a negotiated entity between various communities. The state then is not an equal protector of the Community and the Market. It is merely the protector of all communities.
Rajan simply refuses to imagine it this way because for the modern educated mind in Liberal education this is simply anathema. The liberty of the individual is most supreme to the modern liberal intellectual.
However, this is exactly what makes the community weak and in turn, makes the state and market strength. Rajan fails to even recognize this contradiction, much less resolve. This is a greatly missed opportunity.
In India, that is Bharata, for a few millennia science, industry, and economy thrived alongside communities. This was alive until the British flattened them through immense brute force. If Rajan were to have the open-mindedness to view India differently he would have seen a different model. His book would have been intellectually richer instead. Instead, he dismisses India in 10 pages.
In summary, Rajan has simplified the problem for some convenience and we shall see what that is.
The Second Section
This simplified imagination of the Community makes it easy for Rajan to view the problem from an economic lens. It makes it easy to be characterized as one of economic inequality imbalance. Recognizing Modernity (individualism) as weakening the Community makes the problem more complex.
Concern for the Community and glorifying Modernity (Individual Liberty) at once gets difficult. The problem would then move into the realm of philosophy and perspective of life. It would point to a real crisis of modernity.
Nevertheless, the second section avoids getting into that complex orbit. It presents the economic imbalance of today and posits it as a key problem. It explains how the ICT revolution is contributing to the economic imbalance unwittingly. He recognizes the contradiction of the ICT revolution being potent with possibilities.
He correctly diagnoses the weakening of the community as the problem. He captures the disruption it has caused. He has characterized the disruption meaningfully to establish the importance of a Community. In particular, he presents the reverse spiral of cascading negative impact, when the community weakens, very well.
There are some problems associated. In the process, there is an excess of terminology without adequately defining and characterizing them. There is an over glorification of mixed communities. Community is used as a loose term.
He seems to have a greater affinity to a loose organization or weakly coupled organization of people for a shared purpose – calling it a community. This arguably comes from his being guided by liberal philosophy where the individual is supreme.
This looseness makes reading easy but with a loss of insight. At the same time, the writer has the luxury of indulging in easy generalizations at the cost of deeper investigation.
Like most intellectuals of our times, Rajan praises technology for having catapulted us into where we are today in history. He continues to believe that it holds the biggest promise to solve the imminent problems of poverty and climate change.
At the same time, Rajan recognizes the imbalance it can create in terms of wealth distribution. He recognizes civilizational factors such as ‘values’ and ‘institutions’ as being not adequately positioned to balance the disruptive ability of technology.
However, Rajan also does not peel out the nature of this imbalance and inequality. He does not character it further. What aspect of humanity drives technology development? What drives the realization of civilization values and institutions? Are they the same or different?
These are questions that Rajan does not raise. He does not explore the relationship between the two. With this Rajan loses the opportunity to explore a critical element. What commonly drives humanity’s technology ambition and civilization aspiration is also the reason for this economic imbalance. What then is the missing element? He fails to locate the root of the problem.
Why did the Community weaken in the modern world? Was it a chance? Was it merely the State or is it the greed or is it fundamentally rooted in any philosophy that is guiding the modern world itself? What is the root of such a philosophy? How did such a philosophy evolve? This lack of curiosity in somebody who is considered an intellectual is quite disappointing.
However, there is worse. Rajan, in a simplistic fashion, dubs the emergence of populist nationalism as a consequence of the weakening of the Community. In this, he wholly brings down and disappoints a serious reader looking forward to keeping reading. He simply accepts handed over theories of the left-liberal sociologists. He does not apply his own independent mind to peel if there is merit in that argument.
The example of India must make it clear that this hypothesis is hollow. It is the strengthening and leveraging of the community that has made a cultural nationalism possible and successful. Its fundamental motivation is outside the economy.
Any frustration with the economy has the potential to distract people from such nationalism, not sustain it. In the years of seeming economic slowdown, strengthening of the community is providing security and cushion to the common man. This is alongside the progress of Nationalism.
Another aside is important here, It is partially related to this book. Rajan would do well to distinguish between Civilizational Nationalism and Populist Nationalism. Any serious discourse requires that discretion. A Nationalism that is based on Civilization will at once be both popular and nurturing of the community.
There is no evidence that such nationalism would weaken the liberal market democratic system (as professed by Rajan). It may even be compensating for the community’s weakening as a result of the individual being glorified (by Modern Liberal Philosophy).
That may, in turn, may be strengthening the community. Hence, such simplistic dismissal and characterization of Nationalism is nothing but lazy intellectualism. This is not expected from Raghuram Rajan.
The Third Section
In this section, Rajan dwells upon restoring the Community to play an active and balancing role in the economy. It is commendable that a modern intellectual came this far to recognize the role of the community. Otherwise, theories are galore around the rational individual. Yet, the celebration cannot be wholesome.
In summary, Communities must have the freedom to fulfill their essential functions. Rajan rightly recognizes that. But his world view of the community is still an entity that is shaped from the top. Ironically, this comes from a world view of centralization much in contrast to his concerns of the same. Operationally, Rajan grants autonomy but the vision of a community is handed over to people from the top.
The purpose is to form communities for the convenience of the world view at the center of the Modern Nation-State. Compensating for the imbalance caused by the Nation-State and the Market is but a consequence of that. Nothing more is granted to a Community. This means there is an indirect control over the purpose of a community.
Who then wields that control on behalf of the Nation-State or the Market – Is that the Elite Intellectual Class? This, in reality, is no freedom at all. This is a highly reduced vision of community – a Master-Slave version, where the Slave is visible and the Master is not. (As mentioned earlier, Liberals continue to seek control of education on the one hand. Towards that they grant limited autonomy to communities. They seek to shape those communities according to their world view).
Rajan has to recognize the problem here. Liberal democracy has taken away this freedom from the community in the garb of protecting individual freedom. Until this is set right there is no real possibility is making the Community an effective Third Pillar to balance the Economy.
Rajan conceptualizes a new term – Civic Nationalism in opposition to what he contemptuously calls as Populist Nationalism. The latter is nothing but the respectable Civilization Nationalism unnecessarily, unjustly vilified. What he defines as Civic Nationalism is nothing but a euphemism for Secularism.
The sheer scare to use the word secularism itself is interesting and a half admission of guilt. The so-called Civic Nationalism restores the community only for the purpose of the Economy. It is only to the extent of playing a role inequitable distribution of wealth and avoiding imbalance.
The philosophy is still the modern liberal worldview where the community is philosophically weak. It is a slave in the receiving of worldviews from an invisible Master. A Civilization Nationalism, on the other hand, gives the Community a greater autonomy.
It does not view it with the suspicion of trampling individual liberty. A case in the making is the Khaps of Haryana. How much ever the modern media derides it, they have played a positive role in the evolution of society.
People continue to value them much to the chagrin of the missionary zeal of the liberals to liberate people within. In this world view, Nation is a collective of communities bound by a shared philosophy. This has evolved through negotiation between communities on the ground, not thrust by an elite sitting elsewhere.
Rajan is guided by Modern Liberalism and Statism. The Community must serve a complementary/supplementary role. As a result, questions associated with the independent functioning of a Community are outside of his concern. Even if that were to serve the concern of Economy – primary motion for this book.
What are the essentials for Communities to thrive all by themselves in society? In order to thrive, do they need a unique philosophy, ecosystem? What is the fabric that keeps a community or communities together? Can they be divorced by the culture and civilization elements of the land? Can mere Civic Nationalism ever bind a community or communities?
If they have to be shaped from outside that requires an Elite force outside of the Community. Is this project than an attempt to create a space for Modern Secularists? Is this an indirect way of seeking a navigation and arbitration space for Secularists in the nation? Is that a just thing to do? – These questions are absent from the book altogether left for the readers and reviewers to raise.
In summary, the whole remedial approach the book takes, to restore communities, is way too economic. It is a desperate attempt to fix an existing system. It is not a genuine and complete reimagination. This means Rajan thinks the current world order, view, philosophy is not the problem.
He just seeks a mere tweaking of it. He presents no genuine defense of why the current positions of the State and Market are just and right. This may be because he characterizes the problem only from the Economy’s lens. It may also be because he is an Economist and not a Sociologist, Philosopher, or Cultural personality. But a genuine intellectual is partially all of that.
At a certain level, one is forced to think that this is a sociology book on economics with invisible politics. This, in summary, reduces the scope of the book. As a result, this is a lost opportunity.
At the risk of repetition, the most disappointing aspect is that India is not a case in consideration at all in this book. The 10 pages he dedicates do not sufficiently distinguish India. It is almost like a margin-note to the main thesis.
This means either the intellectual Rajan does not consider India as a land of successful communities. It may also be possible that his journey has been so elite that he is not touched by the ground realities of India at all. Worse, his international exposure has created a block in accessing his Indian experiences to enrich his hypotheses sufficiently. This, in summary, is a great tragedy of this book.
Nevertheless, Raghuram Rajan must be thanked for elevating the Community into the conversations of the economic elite. But, Sir, can you go further into uncharted territories?
The Third Pillar by Raghuram Rajan is available for purchase from Amazon.
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