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Stable families, good jobs, strong schools, abundant and safe public spaces, and pride in local cultures and history these are the essential elements of prosperous societies. Neither global markets nor the nation-state can adequately supply them, and sometimes markets and states undermine them.You would not necessarily expect either a Chicago economist or a moderate Republican to treat markets and hyper-globalization with skepticism.But both are disturbed by what they see as the effects on communities.Rajan calls community the "third pillar" of prosperity, as important as the other two pillars the state and market. No less than excessive centralized state power, he writes, unmanaged globalization can tear apart the fabric of local communities.The impact is multiplied through reduced spending on local goods and services, which means workers and employers across the entire local economy feel the hit.Even during times of significant migration, the bulk of local populations stayed put and needed good jobs and solid communities.Alternatively, economists might recommend compensating the losers from economic change, through social transfers and other benefits. It is only through the creation and expansion of well-paying jobs that local communities can be made vital.
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