HarperCollins India

is proud to announce the publication of

THE THIRD PILLAR

RAGHURAM G. RAJAN

From one of the most important economic thinkers of our time,

a far-seeing analysis of critical issues plaguing societies globally

Releasing on 26th February 2019

 THE NEW AGE OF ANXIETY
We are surrounded by plenty. Humanity has never been richer. Yet, although the
world has achieved economic success that would have been unimaginable even a few
decades ago, some of the seemingly most privileged workers in developed countries
are literally worried to death. The primary source of worry seems to be that moder-
ately educated workers are rapidly losing, or are at risk of losing, good ‘middle-class’
employment, and this has grievous effects on them, their families, and the communi-
ties they live in…

This is a critical moment in human history, Raghuram G. Rajan argues, when wrong
choices could derail human economic progress.

The Third Pillar asks tough questions: why, when economies of developed countries
are growing, do we feel such economic despair? Why, when exciting new technolo-
gies on the horizon promise to solve our most intractable problems, is unhappiness
so widespread? What about shrinking opportunities for a large mass of people? Why
are even well-educated workers who hold decent middle-class jobs so disheartened?
What is the way forward?

The Third Pillar is about the three pillars that support society and how we can restore
the right balance between them so that society prospers. Two of the pillars are the
usual suspects: the state and markets. It is the neglected third pillar, the community,
that Dr Rajan reintroduces into the debate. Dr Rajan argues that many of the eco-
nomic and political concerns today across the world, including the rise of populist
nationalism, can be traced to the diminution of the community. The state and mar-
kets have expanded their powers and reach in tandem, and left the community rela-
tively powerless.

Dr Rajan departs from traditional thinking. The economy is not based on just two
struts—markets and governments—but also depends on a neglected third: the local
community. Neglecting social issues is not just myopic, Rajan argues, it is dangerous.
He calls for a return to empowering local communities as an antidote to growing
despair and unrest.

There are virtues to a healthy community. Local community government acts as a

shield against the policies of the federal government, thus protecting minorities
against a possible tyranny of the majority, and serving as a check on federal power.
Community-based movements against corruption and cronyism that time and again
prevent the leviathan of the state from getting too comfortable with the behemoth
of big business. Healthy communities are essential for sustaining vibrant market
democracies. This is perhaps why authoritarian movements like fascism and com-
munism try to replace community consciousness with nationalist or proletarian con-
sciousness.
The Third Pillar is a masterpiece of explication for its wise, authoritative and humane
account of the forces that have wrought such a sea change in our lives. Dr Rajan’s
ultimate argument, that decision making has to be watered at the grass roots or our
democracy will continue to wither, is sure to be both provocative and agenda-setting
across the world.

Society suffers when any of the pillars weakens or is overly strengthened, relative to
the others. Too weak the markets and society becomes unproductive, too weak a com-
munity and society tends toward crony capitalism, too weak the state and society turns
fearful and apathetic. Conversely, too much market and society becomes inequitable,
too much community and society becomes static, and too much state and society
becomes authoritarian. Therefore, a balance is essential, and Dr Rajan presents a way
to achieve it.

In a section focused on India, Dr Rajan observes that India, with its more
pluralistic and open-access political system, is better positioned for the com-
munity to create more separation between the state and markets. Its weakest
pillar is the state. India also has a private sector that is still dependent on the
state, which makes it a feeble constraint on it. So India has the paradox of
having an ineffective but only moderately limited state. India’s challenge in the
years to come is not its democracy, which is probably the only way to keep a
country with such varied communities together, but the need to strengthen
both state capacity and private-sector independence.

Dr Rajan discusses how to harness the strengths of a vibrant but chaotic de-
mocracy, why India has not done as well as China and the threat of populist
nationalism, predicting that a democratic, open, tolerant India will be an im-
portant, responsible contributor to global governance in the decades to come,
though populist nationalism around the world will make this less likely.

Among the points of special relevance to India is Dr Rajan’s observation that

large young migrant populations, both tantalised and shocked by city life, and
yet to be integrated into solid new communities, are ideal raw material for the
populist nationalists’ vision of a cohesive national community—a trend that is
creating a dissention in societies around the world.
HarperCollins is proud to be publishing Raghuram G. Rajan’s new book,
one that we see as one of the most important
works of non-fiction, original in its concept, scope,
research and insight, on a global issue.
For interviews, reviews and excerpts, please write to
Aman.arora@harpercollins-india.com
DGM, Marketing – HarperCollins India
HB | Society/Economics | 464 pp | Rs 799
 ABOUT THE AUTHOR

RAGHURAM G. RAJAN is the Katherine Dusak Miller Distinguished Professor of

Finance at the Booth School of Business at the University of Chicago. He was the
Governor of the Reserve Bank of India between 2013 and 2016, and also served as
Vice-Chairman of the Board of the Bank for International Settlements between 2015
and 2016. He was the Chief Economist and Director of Research at the International
Monetary Fund from 2003 to 2006.
Dr Rajan was the President of the American Finance Association in 2011 and is a
member of the American Academy of Arts and Sciences and the Group of Thirty. In
2003, the American Finance Association awarded him the inaugural Fischer Black Prize
for the best finance researcher under the age of forty. The other awards he has received
include the Deutsche Bank Prize for Financial Economics in 2013, Euromoney maga-
zine’s Central Banker of the Year Award in 2014 and The Banker magazine’s Global Cen-
tral Banker of the Year Award in 2016.
He co-authored Saving Capitalism from the Capitalists with Luigi Zingales in 2003. He then
wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded
the Financial Times & Goldman Sachs prize for Best Business Book in 2010, and I Do
What I Do: On Reform, Rhetoric and Resolve.

Released in September 2017 by HarperCollins India, I Do What I Do has sold over 100,000
copies in India.

Advance praise for The Third Pillar

A strikingly insightful analysis of the penalties of neglecting the critically important role
of community, by concentrating too much on the perceived efficiency of the markets and
the state. Rajan brings out loudly and clearly why this imbalance needs urgent correction.
– Amartya Sen, Nobel Prize Winner in Economic Science

My parents lived through the Great Depression, the rise in Fascism and World War II. I
thought I was brought up in a world organised in a fundamentally different way. I was
wrong. We all need to start thinking about this issue right now and this book is a place
to begin.
– James A. Robinson, co-author of Why Nations Fall

The Third Pillar offers an insightful perspective into our most pressing challenges. This book
offers a way forward for all of us. Essential reading for anyone interested in how econo-
mies can and should function.
– Linda Yueh, author of The Great Economists

Few economists span the world of policy and scholarship with such distinction, and fewer
still have been so consistently right about the wrong turns the world economy has taken.
Rajan presents a bold, original version that significantly advances our contemporary
debate on the ills of democracies and movies it onto new terrain.
– Dani Rodrik, Professor, Harvard University and author of The Globalization Paradox

Raghuram Rajan has done it again. Fresh, insightful and engaging, The Third Pillar offers a
brilliant reckoning with one of the today’s most important and potentially crippling chal-
lenges.
– Mohamed El-Erian, Author of When Markets Collide and The Only Game in Town

The Third Pillar is a must-read for everyone seeking a way to preserve democracy as we’ve
known it.
– Janet Yellen, Chair of the Board of Governors of the Federal Reserve 2014–18