How did the market and the state leave the community behind? Raghuram G Rajan, one of the most important thinkers of our time, delves into it in his new book The Third Pillar (Harper Collins) and sets out a radical new vision for liberal democracy, globalisation and a prosperous future. His book has the distinction of being known as an authentic social history of modern economies and their inveterate challenges. Rajan asks tough questions that refer to a portent of doom and misfortune: Why, when the economies of the developed countries are growing, do we feel such despair? Why, when exciting new technologies on the horizon promise to solve our most intractable problems, is unhappiness so widespread? What do we do about shrinking opportunities for a large mass of people? Why are even well-educated workers who hold decent middle-class jobs so disheartened?

A world, badly ravaged by the global Covid-19 pandemic and miscalculated counter-responses, is now a living hub of battered economies waging hopeless battles of survival without any commitment to an inclusive economic growth model or welfaristic idealism as the strong fundamental characters of the state. At this crucial point in mankind’s history, the existential crisis is the new normal, and that calls for a rethink of civil society’s fraught relations with the market and the state.

Empower the community

It would be serving the greater common good if the priorities of the state and the market shifted to empowering the community with deep social impacts and removed widespread despair, anxiety and unrest. Mainstreaming the marginalised should be at the top of the list of priorities, and sustainability should drive economic activities as the core driving force. Fast-changing socio-economic fundamentals make it essential to redefine the basic tenets of capitalism. Preserving democracy as we have known it is just not desirable, this is something uncompromising.

For sustainable and fair economic action motivated to secure community welfare, a resource-strapped state’s vulnerability is as damaging as the profit-driven indulgence of corporations in forming a nexus with state actors. It is not sudden that capitalism as a system is appearing to become sick. For long, the major economies have been denying the glaring need to rebalance priorities and empower the community and people through decentralised political and economic participation. The wrong turns the world economy has taken reminds us how democracies have overlooked a consistent fall and did little to reorient the adverse temptations for course corrections. The evolution, foundation and future of capitalism should be studied by all those thinking minds who care about the big shift, the painful transition, and what was all kept in the stores under an adulterated system.

Another important aspect is the dichotomy between the state and the market that leaves no role for the community. The over-hyped efficacy of the state and the market, and the chronic apathy towards the community are the big factors, which are making the future of a free economy and capital-obsessed liberal democracy, endangered and uncertain. The best among the options, democracy, should not be driven by figures and self-laudatory reasons; it should rather give hope to the community and the masses that are being increasingly bereft of the juxtaposing terms with the state and the market.

The democratisation of democracy’s key institutions and economic system will solve a few pressing issues. However, to cure the ailing tendencies, the time now is ripe for the guiding democratic and economic principles to get a serious relook and broad consensus in reforming them. The policies, be they political or economic, should not be considered beyond scrutiny and logical criticism. While the big tech companies are dominating the opinion space through various social media platforms and have made communications a participatory domain, it would be far too simplistic to assume that the community is getting empowered. There too, the focus is on leveraging the unimaginable urge of individuals for opinion-making rather giving voice to the community. With constructive interventions, a lot can be done in the areas that call for urgent action, and the big tech companies are capable of helping in this. Certainly, even for that, the state and the market have to bring into their league the long-forgotten third pillar, the community. A concerted effort is essential.

Shared blueprint

The Sustainable Development Goals (SDGs) or Global Goals were adopted by all United Nations member states in 2015 that provide a shared blueprint for peace and prosperity for the people (communities too) and the planet. All countries, developed and developing, were supposed to form a global partnership and work in unison to end poverty and other deprivations by improving healthcare and education, reducing inequality and spurring economic growth—all the while tackling the menace of climate change and safeguarding the oceans and forests. Of late, governments and multilateral institutions should go beyond tokenism in achieving these 17 SDGs—and thus make a fine balance between the state, market and community.

In an unprecedented manner, the world should be receptive to not just thought-provoking but even provocative ideas if they serve the purpose of making the times ahead free of mayhem. As Victor Hugo famously said, 'There is nothing more powerful than an idea whose time has come.' We should believe that a systemic reset is imperative for a better tomorrow. The strong first and second pillars, the state and the market, should create the much-needed space for the community, the third pillar.