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Raghuram Rajan: “The Third Pillar: How Markets and the State Leave the Community Behind”

A few months ago I received a copy of the book, “The Third Pillar: How Markets and the State Leave the Community Behind,” by economist Raghuram Rajan. The topic is important and the book is full of interesting thoughts. It’s hard for me to evaluate Rajan’s economics and policy advice, so I’ll leave that to others.

To say it again: This post represents neither an endorsement or a disparagement of Rajan’s book. I just found it difficult to evaluate.

What I will share is the email I sent to the publisher after receiving the manuscript:

I took a look at Rajan’s book and found what seems to be a mistake right on the first page. Maybe you can forward this to him and there will be a chance for him to correct it before the book comes out.

On the first page of the book, Rajan writes: “Half a million more middle-aged non-Hispanic white American males died between 1999 and 2013 than if their death rates had followed the trend of other ethnic groups.” There are some mistakes here. First, the calculation is wrong because it does not account for changes in the age distribution of this group. Second, it was actually women, not men, whose death rates increased. See here for more on both points.

There is a larger problem here is that there is received wisdom that white men are having problems, hence people attribute a general trend to men, even though in this case the trend is actually much stronger for women.

I noticed another error. On page 216, Rajan writes, “In the United States, the Affordable Care Act, or Obamacare, was the spark that led to the organizing of the Tea Party movement…” This is incorrect. The Tea Party movement started with a speech on TV in February, 2009, in opposition to Obama’s mortgage relief plan. From Wikipedia: “The movement began following Barack Obama’s first presidential inauguration (in January 2009) when his administration announced plans to give financial aid to bankrupt homeowners. A major force behind it was Americans for Prosperity (AFP), a conservative political advocacy group founded by businessmen and political activist David H. Koch.” The Affordable Care Act came later, with discussion in Congress later in 2009 and the bill passing in 2010. The Tea Party opposed the Affordable Care Act, but the Affordable Care Act was not the spark that led to the organizing of the Tea Party movement. This is relevant to Rajan’s book because it calls into question his arguments about populism.

The person to whom I sent this email said she notified the author so I hope he fixed these small factual problems and also that he correspondingly adjusted his arguments about populism. Arguments are ultimately based on facts; shift the facts and the arguments should change to some extent.


  1. zbicyclist says:

    Is the Tea Party a case of “be careful what you wish for”?

    The Kochs had a big role in pushing the Tea Party.

    The Tea Party had a big role in providing Trump’s base.

    The Kochs are far from Trump supporters. But the cat’s out of the bag now, and not easily going back in.

    • Andrew says:


      Perhaps relatedly there is a problem of permeability between academia, media, and policy. We’ve all heard about Fox News making policy, but the problem with Rajan’s book is slightly different. He’s an academic researcher who’s made policy and wants to influence policy further (hence this book) but he’s also an active participant in the news media, and in this case he seems to have gathered some mistaken impressions about recent history based on received wisdom about the Tea Party.

      To put it another way: I fear that Rajan spends too much time reading and writing op-eds and not enough time reading the news. Maybe this is a problem with me too: the time I spent reading Rajan’s book, writing the above post, and then reading your comment and writing mine, is time I could’ve spent reading the news, looking at data, or doing some other activity that would tell me more about what’s actually happening in the world.

    • Noah Motion says:

      The Tea Party had a big role in providing Trump’s base.

      Is this true? Specifically, is there evidence for it beyond the fact that the tea party was largely a within-GOP phenomenon and then, years later, Trump took over the GOP?

  2. Dzhaughn says:

    I wonder if offering the author a chance to correct such mistakes pre-publication is really doing the world a service.

    I believe he can easily paper over such cracks, but I do not believe this will result in a rigorous re-evaluation of the arguments in the book. He will look more careful in his thinking than he really has been. Better to leave that work to someone who feels the book is worth arguing against.

    Would that we had an Anti-Wikipedia that accumulates doubtful assertions with subsequent references to them. Too hard a project for the human race, I bet.

  3. Kyle C says:

    Hey I predicted this right here in the comments a year or two ago! I said that this mortality data would enter common memory as a story of Stoically Dying White Men, because … just because. That’s what people are primed by our culture to hear.

    • Andrew says:


      Yup. It reminds me of a discussion I had a couple yrs ago when that Case and Deaton paper came out.

      Reporter: So, Case and Deaton were wrong? That’s what you’re saying?

      AG: No, Case and Deaton were basically right. They just messed up on one thing: they didn’t age-adjust so they found mortality rates in that group were going up, but when you properly adjust the rates have been flat in recent years.

      Reporter: So, Case and Deaton were right?

      AG: Yes, basically right. But they’re not right in claiming an increase in mortality rates. That bit is wrong.

      Reporter: So they’re basically right. This isn’t worth going into.

      AG: Also, the patterns differ by sex. The mortality rates went up for women but down for men.

      Reporter: Whatever.

      It was selection bias in action. The news media’s first story was Scientist as Hero, brilliant Nobel-prize-winning economist makes great discovery. They were then ready to shift into the new story, Debunked Claim or Scientific Dispute. But I didn’t give them that story, as I was not “debunking” Case and Deaton, just modifying their claims. So, since the claims were never “debunked,” they just stood in their entirety, errors and all.

      Frustrating. I think part of the problem is that Rajan is an economist. Economists (with some exceptions) are notorious for only trusting other economists. Whether the topic is mortality rates or Tea Party protests, why listen to a statistician or political scientist?

  4. Michael Nelson says:

    The error is still on the first page in the “Look Inside” version on Amazon. But that could be based on a pre-print, I guess, depending on how long ago this post was originally written. There’s a citation that I can’t click through to, but presumably that was in the draft you reviewed.

    • Andrew says:


      I’m guessing the author never corrected the mistakes because, if he had, I assume he’d have contacted me to thank me for pointing them out. Too bad. As we know, all sorts of people are reluctant to make corrections after errors are pointed out to them.

  5. BenK says:

    It seems to me that there are several legs missing – the Market and the Government have been overplayed by their respective partisans and turn into a frontal assault. The Family has been degraded, as well as the local Community, and the ‘Religious’ or Cultural organizations.

    There have been attempts to rewrite history and fold everything from Family, Community, and Culture into government or market; but they don’t hold up. The interfaces are there and the institutions interpenetrate, but they follow different logics on characteristic time, spatial, population, and phylogenetic scales.

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