This book is an insightful and serious read for those interesting in understanding various phenomenon around us, explained in the evolutionary and current context. The book traces the inter-play of State, Markets and Communities and its impact on social and economic across nations like US, Europe, China and India. Accordingly, the suggestions are also centered on role of each of these pillars and their relationships.
Rajan take on the China growth story is interesting and covers whole set of factors starting with retrenchment of staff from loss making PSUs to release labour, shifting focus to cities as epicenter for economic development and governments ability to delicately manage the control and support to start-ups and private enterprise. Future challenges to China growth would off-course require some fine-tuning and rethink. Rajan attributes India relatively slower economic progress to difficulty in land acquisition, dearer credit, procedural delays; the costs associated with vibrant but chaotic democracy. Surely Rajan understanding of India goes much deeper, than the cryptic analysis shared in this book.
Rajan convincingly explains the surge of Populist Nationalists, riding on the disenchantment of majority against the elite, and how this surge may come with its own set of issues, including social unease. The remedy proposed as combination of constitutional patriotism (nations identity linked to shared values), and communities with hold stronger ethnic and cultural entities is an interesting paradigm- but how much of this can be designed and how much this comes as emergent structure as an outcome of societies evolutionary journey is an open question. Similarly the phenomenon behind residential sorting and its impact on the inequality in the society is another dimension that require conscious intervention at different levels.
How much should the international institutions decide for the world decide for cause of common good, and how much should sovereigns have rights to decide for themselves. A very touchy issue, especially in light of widespread mistrust within the community of nations, provoked by the real and imagined capture of international agreements by stronger nations and through the big corporations. Rajan uses the global insistence of Basel norms adoption for financial institutions to drive this fact well. Similarly the stringent intellectual property rights (and infringement claims) tends to disproportionately discourage innovation in the relatively less developed societies. The advice is to move towards more inclusive, transparent and negotiated approach to global common goods, then pushing for harmonized rules and regulations across nations. Easier said, than done!
Recognizing the limitations of taking shareholders vs stakeholders benefit maximization as guiding objectives for the Corporate, Rajan middle-path suggestion for taking up the value maximization which comes as sum of value created for genuine set of stakeholders is an interesting concept- that may be worthy of further research.
Clearly the book leaves reader with much to chew, with provocative and creative in its advice and without being prescriptive.