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The Third Pillar. Raghuram RajanЧитать онлайн книгу.

The Third Pillar - Raghuram Rajan


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which in turn created many more competitive independent entities that could check state power. The state and markets supported each other’s expansion.

      As England became militarily powerful on the basis of its strong state finances, and economically powerful based on its competitive markets (which positioned it well for the Industrial Revolution), other European countries took note. They did not want to lose out in the great European quest for supremacy. It would be too much to claim there was only one way to a constitutionally limited state. France went through a bloody revolution, followed by war and empire before it eventually became a constitutional republic (barring a few short relapses). Germany went through unification, empire, war, democracy, fascism, and war again before it too became a constitutional republic. The United States, despite inheriting a very English governance ethos and becoming an independent republic, went through a civil war to suppress its own Southern landed interests.46 Nevertheless, many of these countries reached similar points—a constitutionally limited state with generally competitive markets.

      The recognition of private property in land, and the emergence of a market for produce and land, also left many behind as the feudal community declined. While independent private property owners could coordinate through Parliament or Congress to influence the state, the peasant and increasingly the worker in manufacturing establishments, dislodged from their traditional communities, had no explicit rights and no say in their own governance. In the next chapter, we will track the final steps toward liberal democracy as industrialization picked up. The demand for a voice came especially from workers in the growing cities, whose squalid filthy communities needed public services. As we will see in the next chapter, once they obtained a democratic voice, communities organized to get the political establishment to pay attention to their demands, especially that unbridled crony capitalism be controlled. The third pillar grew in strength once again.

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