Markets are not free but exploitative. Money is a bad metric, not nuanced and unequal. Communities should equate to support of food, shelter, education and healthcare. GDP should be replaced with measures of Gross Domestic Happiness, then communities will thrive.
3
The pathology of choosing an economist to review the popular work of another economist is having to sift through the reviewer's ideology filters to find some trace of an observation with merit.
Mr. Cass passed up the chance to note some of the drawbacks,("tradeoffs") of greater abudance of banking choices, but left unsaid what they are. Could it be that the mandarins of the Manhattan Institute have more fondness for fewer not greater choices in banking? Why? We are left to guess. Similarly, his scold of the state for "siezing the safety net", contains more than a whiff of longing for the invisible hand. Who besides the state? And what behavior is sought for the market and state relationship? Regulatory? Prof. Rajan is a serious thinker with a body of respected work. This book needs a review at his level.
9
There's a class war going on. It kicked into high gear when the communist world collapsed in '89.
Before there were compromises made with Worker's Unions, Progressive community organizations like ACLU, Planned Parenthood, etc. Homelessness was growing but at least considered a problem to be solved. American business provided pensions, healthcare, overtime, paid lunch hours — many perks and fundamentals all of which have been thrown away in a race to the bottom. Wages continue to go down, even with near full employment. It's rich to hear a supply sider from the World Bank pretending to care about community.
Hint: you can't care about community without raising workers wages.
Workers are the community. Their ability to earn determines their ability to own a home, without that they simply get driven out of their communities by high rents.
For all it's hate of social democracy, the economists who provide intellectual cover for the class war do nothing to promote a larger percentage of the population as property owners, quite the opposite.
There real goal is a completely pacified population without capital or any significant wealth to speak of. This will leave us where they want us: without the means to educate ourselves, fight back in court for our rights, organize, or even raise a family — because they've made that a luxury for others.
Worse still they have brought back the idiocy of marxist fantasies, by reseeding the conditiond which spawned them.
9
Rajan is right as far as he goes. The same could be said that Hedge Fund Capitalism destroys families as well as communities. Hedge Funds will buy up stock or the investors in a company then milk it for all it is worth, letting people go and selling off the pieces when they have been reduced to their bare bones.
The uncertainty they cause may well be the reason that there are more females in college than males for some of them feel that having a family means that they probably will have to be the breadwinner.
2
The community was not left behind by the markets and state in that many people are clamoring for Walmarts and Amazon because things are cheaper and there is greater access, etc., and only a few, often rich and educated, with multiple options, based on their wealth, seem to be seeking a return to what Rajan is proposing. From the book's review, what is being described seems very closed and restrictive.
In older societies, communities were built around the commons, basically a woodland, seashore, riverbank or other natural resource that was held in common by all the people and the property of no one. Care of the commons was the responsibility of all the people in the community and all members of the community would limit their use to make sure the commons could flourish. As the market and the state grew, the commons shrank. If we want stronger, then the state needs to take an active role in strengthening communities at the expense of the market, which if left unchecked will vacuum up all the commons -- the environment, people's labor and leisure time and even family life -- for the profit of those who have already taken ownership of most of the resources.
13
While I cannot comment on the book, I can contribute to matters in the review. I live in a small rural "community." Here, trespass grazing is often a deliberate act, not a cooperative one. Fence wire is cut or tied up, and gates left open to make it appear that competitors are trespassing. As for the limited choice of contractors, which is the rule here, relationships matter only to a minority. The obsession with short term gain is not limited to corporations and investors and infects the culture at large. The view from the ivory tower does not always align with the view from the ground.
11
@John Walker
I cannot comment on the book either, but I can comment on a very different first hand experience with the community’s role in an economy. In recent years I have been doing some amateur digging into the economics of the Hasidic community in NY. I know in the media the Hasidic economy is simplified to “uneducated, poor, taking hand-outs” a walk through the neighborhood makes that seem incomplete. Here is a community in gentrified Williamsburg, single earning large families, with the earner usually not even having a high school diploma. How do people survive, nevermindhave such vibrant shopping districts?
When you start to examin how it works, you begin to see how much the power of the community does. No chain stores. Everyone buys from each other. Everyone’s business is listed in the phone book, not buried in an insurmountable global heap. People invest locally instead of in homes around the world. It makes everyone’s homes valuable. I can go on and on.
I am no economist and there is a lot of nuance here, but you can’t but walk away from walking it’s busy streets and see what community values does for an economy. But the values is what counts. Greedy capitalistic mindsets in the boondocks as you describe it isn’t community, certainly not in spirit.
1
@John Walker I think that's the whole point. You do not have a rural community in a real sense. The issue Rajan is raising is how the non-community, self-seeking relationship you describe has been structurally and institutionally cultivated over the past couple centuries, so that now it just seems like "the way it is." It's to the point where we can't even use the term "community" to adequately describe local relationships. Most of us, at least in the West, have not experienced it in our lifetimes.
5
@Frieda Vizel
Very astute observation that is ignored in often justified criticiisms of Hasidic restrctions on opportunities for their families, especially women.