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The rule of three

  • In his new book, the former RBI governor raises urgent concerns about community-building and its role in India’s economy
  • Rajan argues that community is the third pillar of society after the market and the state

A ‘chawl’ near Byculla in Mumbai.
A ‘chawl’ near Byculla in Mumbai. (Hindustan Times)

Time was when Mumbai’s Haji Ali dargah acted as the geographic equivalent of a poverty line. The rich and powerful lived and worked south of this physical marker and the north was reserved for the penurious and disadvantaged workforce that lubricated the city’s famed wheels of commerce. Slightly north of the dargah, clustered around the Parel-Lalbaug district, were the city’s fabled textile mills. This agglomeration of cold-steel machinery had an organic heart: The mills became the nucleus for Mumbai’s social, cultural and political fabric.

Workers, mostly migrants from different parts of Maharashtra, lived in the close vicinity of mills in single-room tenements called chawls, unique to the city; architecturally, these were a series of small living spaces opening into a long, uninterrupted corridor, with common toilets at each end. These common areas became the starting points for community building: from bonds forged with immediate neighbours on the same floor to those living in the same building and extending to the larger community in the locality.

This grey, mechanized and heaving world also became a source for subaltern voices and a muse for working-class poets like Narayan Surve. His tapestry borrowed elements from the world he knew best: the clanging, three-shift cotton textile mills and swarming chawls. Even while lamenting Jawaharlal Nehru’s death, Surve re-routed his elegiac cortege through familiar working-class quarters: The tenements that sat warming their backs clamoured/ The city slowly turned grey/ And then brown/Then… darkness swallowed the ruby./ The mills wearing their stone-gowns/ Lit their cheroots and/Drowned in their thoughts (The Time Nehru Died, translated by Jatin Wagle).

Chawls are a unique microcosm, representing a successful community-building process pockmarked with the usual warts like caste pathologies. Raghuram Rajan’s latest book—The Third Pillar: How Markets And The State Leave The Community Behind—pins hopes on communities like these for exerting a stabilizing force on society through what he terms “inclusive localism". He focuses on Chicago neighbourhoods (currently, he teaches at Chicago University), to illustrate his thesis, though the example of chawls may have been more appropriate, given his three-year stint in Mumbai as Reserve Bank of India governor. This is especially true when he contends that the local community has to be in equilibrium with two other pillars of society: markets and the state. The backstory of chawls illustrates what happens when that balance is missing.

Over time, an unstoppable and unrelenting force called “development" wolfed down acres of textile mill land and replaced them with office spaces and shopping malls. The unplanned and ad hoc de-industrialization ended up uprooting well-settled workers and their families, forcing them to relocate to far-away suburbs and become estranged from communities that had nourished them for decades. Those who have managed to cling on find their lives dwarfed by cold, steel-and-glass abominations.

The community lost but the market won comprehensively, aided and abetted by a venal state. Political parties were quick to milk this sense of alienation and loss of community-based support systems. Weaned on the same milk of development that had destroyed communities, these parties chose to redirect the community’s latent anger against another visible but defenceless enemy: migrant labour. Violence became the vocabulary of choice; in trying to rebuild a community no longer restricted by geography, the political agents had to maim another community that was identified by an alien geography. But all hopes of regaining a lost community shimmered only fleetingly, separated as it was by geography and achieved through the political agency of negative identities. As Hegel wrote in the preface to The Phenomenology Of Spirit, “Truth and falsehood as commonly understood belong to those sharply defined ideas which claim a completely fixed nature of their own, one standing in solid isolation on this side, the other on that, without any community between them."

Raghuram Rajan.
Raghuram Rajan.

Communities come in different shapes and sizes, with the definition depending on what the author has in mind. Rajan views community as a unit where “members live in proximity" and are limited by geography. He posits that when community is not working in tandem with markets and the state, or when all three are not in equilibrium, it leads to despair and unrest, even illiberalism and the rise of fascist forces.

Truth be told, the term community eludes any definition in sociology, with multilayered classifications and different schools persisting with differing treatments. Apart from the definition used by Rajan, a sense of belonging to a common ideal can also constitute a community, à la community spirit. Caste ugliness or communal forces in India often drive community-building independent of geography. Even in the US, common defined interests unconnected geographically but bound by a political agenda can be called a community, such as Black Lives Matter. Rajan’s thesis focuses on the community’s sense of loss (especially jobs and dignity) forged by globalization, rising inequality and technological upheaval, all leading to political radicalization and deep social fissures. The process of healing, he feels, can begin with empowering local communities and ensuring well-demarcated operating areas for all the three pillars. A sort of dynamic equilibrium, if you will.

Without getting too tangled up in the various definitions of a community, Rajan’s thesis does make some sense when viewed from the lens of India’s federal structure. The 73rd amendment to the Constitution in 1992 created a third tier of governance at the local level of the village or the municipal corporation, in addition to the Centre and the state. This was supposed to foster self-governance and was intended to institute “democracy at the grassroots level as it is at the state level or national level". While the jury is still out on how effective the experiment has been, the inability to raise resources, or levy taxes, has made the third tier resource-dependent on the Centre and the state.

The Third Pillar—How Markets And The State Leave The Community Behind: By Raghuram G. Rajan, HarperCollins India, 434 pages,  <span class='webrupee'>₹</span>799.
The Third Pillar—How Markets And The State Leave The Community Behind: By Raghuram G. Rajan, HarperCollins India, 434 pages, 799.

The third tier is also a story of political capture by the national parties, leaving self-determination and self-governance unrealized and subservient to a larger agenda. In addition, a profane but growing relationship between markets and the state has weakened institutions that were supposed to keep the powers of all economic and political agents in check. The story of institutional emasculation, a global phenomenon and a threat to liberal democracy, will ensure that the third pillar remains a servile bystander, serving the interests of the state and markets acting in tandem for the enrichment of a few.

Rajan’s emphasis on galvanizing the third pillar is born from some urgent and valid concerns—especially the rise of bigotry and the hatred it has fostered in community for the imagined “other", an artificial binary created between us and an imaginary them. The book does not provide any new solutions, but, barring some sweeping generalizations and jarring observations (“The losses of a few, though, should not be allowed to derail the gains to many"), it could act as a starting point for society’s rehabilitation and restoration.

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