My review of Raghuram Rajan’s latest book

My review of The Crumbling Pillar says,

One can think of each of the three pillars as having an ideological base. The strongest support for the market comes from libertarian ideology. The strongest support for the state comes from progressive ideology. And I would argue that the strongest support for community comes from (socially) conservative ideology.

My overall criticism of the book is that he supports an idea of subsidiarity which I identify strongly with conservatism but without doing anything to raise the status of conservatives or lower the status of progressives. Either this is what Tyler Cowen would call a Straussian attempt to appeal to progressives or it shows how conservative thought is completely ignored by academics these days. In my review, I opted for the latter interpretation.

Please read the whole essay.

6 thoughts on “My review of Raghuram Rajan’s latest book

  1. Please read, also, Dr. Kling’s essays mentioned in footnote 4.

    A generous review and one whose example is worthy of emulation (note to self)””. Nevertheless, Dr. Kling does not mention what I view as Rajan’s laudatory comments on Communist Party rule in China. I bought the kindle version so I am not going to go back and cite them directly, but lets just say they seem all too typical of the “innovations in authoritarianism” school of thought that dominates academic culture in the US.

    Perhaps the reason Rajan does not make any suggestions on how to implement subsidiarity in the US is because, as Dr. Kling has written in the second essay mentioned in footnote 4: “Restoring our mediating institutions might be yet another exercise in trying to squeeze the toothpaste back into the tube.” While this may indeed be true assuming the maintenance of the status quo in the US political system, progressives may open the door to radical constitutional change with their attacks on the electoral college, amendment of which would require other major substantive changes and perhaps an opportunity to restore federalism as well as constrain the federal administrative state and the judicial nihilism so rampant in the courts today. The US is due for a bit of a radical shake-up.

    Alternatively, maybe cheap air fares and vacations abroad will result in ideas being brought back from abroad. Laporoscopic surgery is said to have been introduced to the US by a US doctor on vacation in France who, bored with sightseeing, went and witnessed a procedure, and, excited by the potential, got training and spread the innovation to the US where it had been unknown. Rajan adeptly describes the German welfare system with its strong local component, perhaps something unexpected (an increase in US Treasury bill interest rates?) will happen to incite popular US interest in using that as a reform model? The French health care system? Dutch schools? Brazilian munincipal budgeting or urban planning? All have strong elements of subsidiarity and all are arguably superior to extant US practice. When US communities are not busy being their own worst enemies, they are often willing to break a mold. Given the opportunity and the ability to study alternative examples, many may do so.

  2. I think Rajan misunderstands (as is common among progressives) Thatcher’s worldview. Her criticism of the concept of ‘society’ (at the national level) is interpreted as in the spirit of radical Randian individualism, when in fact it’s simply based on the observation that community is fundamentally local and voluntary. The mechanisms by which communal standards are enforced through interpersonal interactions can’t be replicated by a nation-state. A nation-state can never be a ‘big family’ or a giant village. It can only be an impersonal collector and writer of checks, or worse, an impersonal jailer. Almost everyone in our ‘society’ is a stranger with whom we have little in common; unlike with small scale voluntary communities, our bonds with other members of ‘society’ are essentially illusory.

    Overall, I think the whole argument – especially from progressives, but also from conservatives like Deneen – that classical liberalism undermines community is wrongheaded. Indeed, the cold heartless capitalism decried by critics of markets actually *reinforces* local communities institutions: capitalism punishes reproductive irresponsibility, wanton drug abuse, lack of impulse control, chronic unemployment, etc., and thereby confers a selective advantage on participation in communities that positively influence behavior of their members (hence why the rise of early capitalism in Europe corresponded with ascendancy of virtue-based communities, as is emphasized by Weber and McCloskey, rather than leading to amoral individualism).

    Certainly, some libertarians adamantly insist on a Randian, hyper-individualistic view of the world that shuns even voluntary communities, which is mistaken, but really, I think there’s a false dilemma presented in Rajan’s work (and others writing similar books) between (classical) liberalism and communitarianism. Communitarian theorists like MacIntyre and Charles Taylor do this too, unfortunately. Perhaps libertarians should try to claim communitarianism for themselves and emphasize that the benefits of community lauded by MacIntyre and Taylor are actually better attained by local, voluntary communities than by the nation-state approach they prefer.

  3. When we think about communities of the past, I always get a sense of the Andy Griffin Syndrome when we believe everything was the Andy Griffin Show. I am sure the past American was close to Local Theology Government system that was reflected in numerous wonderful John Ford movies or Andy Griffin shows but there was a strife at the time as well. (And we are bothered by the local one room school? It probably was a terrible way to deliver education beyond the 8th grade levels.)

    1) When we think about the decline of community and growth of Federal Government of the Progressive Era, it seems like the world was under going massive change that made it a lot easier to trade, travel and move around the nation. As economic freedom came the ease of moving away which weakened the local community. Federal law enforcement did not grow out of nowhere but by 1920s the reality was criminals could easily cross state lines to where Federal law enforcement was more practical.

    2) We should not forget that a lot of the decline of communities also came about decrease of racial and religious segregation. No longer did African-Americans have to stay in their segregated neighborhoods but could move to the general populations. (I suspect Jewish communities held tight until 1970s for similar reasons even if there were less local segregation laws on the books. Anybody with knowledge of California knows there were less segregation laws from 1900 – 1960, but the Chinese-Americans or Hispanic-American definitely had their segregated neighborhoods.)

    3) I always felt the Reagan Revolution did a lot break communities and people ties to them. In case of economic freedom, the early 1980s was the highpoint of people moving to different states so everybody learned they can vote with their feet away from communities.

    4) In terms of communities, we do forget it was the private unions that enforcing better economics for working classes not the good will of local community capitalist. Modern leftist and paloconservatives forget how strong private unions used to be. (Compare the number of days lost to strikes in 1950s to today. It is not even close.)

  4. Rajan says

    Populism, at its core, is a cry for help, sheathed in a demand for respect.

    Does he offer his own definition of “Populism”?

  5. Market, state, community. I have heard all three of these used to justify mindless conformity. Yes, even the market. Eddie Bernays figured out how to make that serve conformism.

    The question is: do you serve these things, or do you make them serve you? The trouble with a pillar is you expect it to hold you up. What if it doesn’t? Also, being atop a plinth limits one’s mobility severely. But even an individual needs to connect with others. The key is to do it on your terms.

    Voluntary. There’s a word with connotations I find pleasing. But there’s no such thing as a voluntary state. There can’t be.

  6. Rajan does not get into any specific implications for which decisions might be left to communities or which federal programs would be eliminated with responsibilities handed down to lower levels. Were he were to make any specific proposals, chances are that his allies would be limited to conservatives.
    This is so true in implying the progressives will always be in favor of communities, in theory, but for increasing Fed power in practice. (Libs would also favor eliminating any Fed programs, but they won’t be elected to be among the Fed decision makers.)

    Post office, health care, and especially education come to mind right away, as better done thru voluntary local communities and organizations.

    It used to be that “local community organizer” was somebody who helped organize a local community to solve the local problem, with local resources. This morphed into a lobby function to get non-local gov’t cash for the local org who “promises” to solve the problem.

    We need a culture change to accept that local problems need local solutions — but the political TV / PR dynamic has all elected officials promising gov’t help, Fed, state, city, to solve the local problem. Often the help is not the desired money, but instead further regulations and some kind of program seemingly designed to fail while looking like it’s helping.

    Any known World Bank failed programs, which the WB says were failures? I have the feeling they studiously avoid taking any responsibility for any of the many failures. All gov’t agencies are like that.

    Arnold, you are far too in love with your own version of UBI. I agree with Rajan:
    UBI essentially assumes that most people will not have a job, and there will be no point in them searching or one or attempting to retrain themselves since no new jobs will be possible. (page 323)
    You say:
    “My analysis, which I believe is consistent with fairly basic economics, would say the opposite. ”
    Your critiques of the high marginal rate on needs based benefit programs for unmarried mothers is excellent, but UBI would entrench a huge number of such poor folk in subsidized no-work not too uncomfortable poverty, with little prospects of improving. In theory, it would allow them to try out other jobs. And a few, maybe 10-15%, would do so. But most would play video games or other non-work pastimes.

    We’d be better off replacing the gov’t “help” with a Job Guarantee, and looking to help develop communities and local organizer leaders who can direct poor people into subsidized jobs. Including assistants to day care, schools, hospices, hospitals, and any local apprenticeships.

    Such a voluntary set of jobs should be viable to setting up and testing right away.

    UBI should be testable, too — but where is it being tried? Finland almost tried it, but already pulled back.

Comments are closed.