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The Third Pillar: How Markets and the State Leave the Community Behind

April 12, 2019

Raghuram Rajan, Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago
Moderated by John Lipsky, Peter G. Peterson Distinguished Scholar at the Henry A. Kissinger Center for Global Affairs

Raghuram Rajan, former governor of the Reserve Bank of India, visited the school for a discussion on his new book “The Third Pillar: How Markets and the State Leave the Community Behind.”

Rajan explained how the state, the markets, and the community constitute the three pillars of liberal market democracies. During his presentation, he mentioned that the state and markets have neglected the community and that the three pillars must interact to maintain balance in the liberal market democracies. He noted that through interactions, the community will instill values and norms in the market while the market reciprocates through productivity and choice. He added that the community will provide democratic oversight for the state and in return, the state provides security, justice, and safety nets.

The event concluded with a Q&A between Rajan and Lipsky, in which they discussed the demarcation of the three pillars and early childhood formation in American schools. Questions from the audience ranged from the differential values among communities and how it affects the global market to the growth of emerging economies such as India.

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