"New York City
Mayor Zohran Mamdani recently caused something of an uproar when he
contrasted the “the frigidity of rugged individualism” with the “warmth
of collectivism.” This framing echoes the familiar criticism that capitalism
forces people to go it alone as “atomistic individuals.” The thought
goes like this: markets do real damage to the social fabric and our
relationships because they organize our economic lives around competition and self-interest. Organizing our lives around competition encourages people to see each other as rivals rather than partners. In brief, capitalism pits us against each other, while socialism
brings us together. Setting aside the fact that collectivist regimes
haven’t exactly been warm to those living under them, this view gets
capitalism backward.
Start with a simple observation about your own economic life under capitalism. Think about this week: how many cooperative interactions have you had, and how many competitive ones?
You probably didn’t compete with
anyone when you bought coffee at Starbucks this morning. You didn’t
enter a zero-sum struggle when you paid your phone bill, purchased
groceries and gas, or caught a movie. Instead, you took part in a series
of mutually beneficial, voluntary transactions. You gave someone money
and they gave you something you wanted more than the money. Everyone
walked away better off. In the words of Adam Smith,
“It is not from the benevolence of the butcher, the brewer, or the
baker, that we expect our dinner, but from their regard to their own
interest.”
Competition, by contrast, rarely pops
up in your day-to-day economic life. A business competes with other
businesses for customers and you’ve probably competed with others for a
job at some point. But you cooperate far more often than you compete.
And notice what market competitions really are—they’re
competitions to see who’s best at serving others. You might say that
they’re competitions to discover the best ways to cooperate and who the
best cooperators are (more on this below).
Unsurprisingly, Smith understood the cooperative nature of markets well. He writes that a wool coat
“is the produce of the joint labour of a
great multitude of workmen. The shepherd, the sorter of the wool, the
wool-comber or carder, the dyer, the scribbler, the spinner, the weaver,
the fuller, the dresser, with many others, must all join their
different arts in order to complete even this homely production. How
many merchants and carriers, besides, must have been employed in
transporting the materials from some of those workmen to others who
often live in a very distant part of the country! How much commerce and
navigation in particular, how many ship-builders, sailors, sail-makers,
rope-makers, must have been employed in order to bring together the
different drugs made use of by the dyer, which often come from the
remotest corners of the world!”
Smith goes on, but I’ve got a word
limit here—the point is that markets don’t atomize us. On the contrary,
they lead strangers all over the world to cooperate.
Think back to the last time you
bought a coffee. Starbucks has to coordinate with bean farmers, shipping
companies, truck drivers, warehouse workers, roasters, equipment
manufacturers, electricians, plumbers, accountants, and baristas. None
of these people know you, and yet they manage, every day, to cooperate
in ways that reliably get caffeine in your hand at 7:43 a.m. And this
isn’t accidental—the prices provided by markets give people the information they need to figure out what others want, and they provide the incentive to give it to them.
There’s no denying that markets involve competition. You can go to the business section of a bookstore and find titles like Business Warfare and The Warfare of Business.
But businesses are competing with each other to see who can best serve
consumers. Netflix beat Blockbuster by figuring out a better way to give
viewers what they wanted: convenience, selection, no late fees, and
eventually streaming. In brief, Netflix won because consumers preferred
cooperating with Netflix over Blockbuster.
A similar point applies to
competition in the job market. Maybe you don’t merely want to buy coffee
from Starbucks, you want to work there, too. But this means you’ll have
to compete with other applicants who also want the job. Here again,
let’s look at what it takes for an applicant to win this competition.
They need to demonstrate that they’ll do the best job of making
customers better off—say, by being more punctual, more efficient at
making mochas, or more likely to serve drinks with a smile. Market
competition is competition to see who can cooperate most effectively
with others.
In any case, democratic socialists can’t be opposed to all competition.
After all, democracy requires competition, and democratic socialists
want democracy in the workplace as well as in politics. If competing for
dollars is frigid, it’s hard to see why competing for votes would be
any warmer. Market competition enables millions of people with different
values, plans, and priorities to work together without agreeing on much
of anything by helping them to coordinate many different choices. You
and your barista don’t need to agree on the principles of justice to
cooperate and make each other better off. Far from being atomizing or
frigid, the free market is a system of interdependence that brings
strangers together to cooperate for their mutual benefit."