In a recent public address, New York City Mayor Zohran Mamdani stirred the pot by juxtaposing “the chill of rugged individualism” against “the embrace of collectivism.” This rhetoric taps into the well-trodden critique that capitalism reduces individuals to isolated entities, fostering an environment where we view one another as competitors rather than collaborators. The argument posits that the competitive nature of markets erodes our social connections, leading us to see our fellow citizens merely as rivals in the great economic race. In essence, capitalism is said to create division, while socialism is portrayed as a unifying force. However, this perspective on capitalism dramatically misses the mark.
Let’s start with a straightforward reflection on your own experiences navigating the capitalist landscape. Consider your week: how many cooperative endeavors have you engaged in, and how many were truly competitive?
Chances are, your morning coffee run at Starbucks didn’t involve a cutthroat showdown. When you settled your tab, you weren’t embroiled in a zero-sum game; instead, you participated in a series of mutually advantageous exchanges. You offered cash, and in return, received a caffeinated beverage that you valued more than the money spent. Everyone involved left the interaction better off. Adam Smith famously noted, “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.”
Indeed, competition is often absent from our daily economic encounters. While businesses may vie for customers and job seekers may compete for positions, cooperation predominates in our interactions. The essence of market competition is less about rivalry and more about identifying who can best serve the needs of others. It’s a contest to uncover the most effective ways to collaborate, a theme I’ll explore further shortly.
Notably, Smith had a keen understanding of the collaborative spirit inherent in markets. In his seminal work, he illustrates that a wool coat is the product of countless individuals working together across diverse trades. From shepherds to weavers, each player in this vast network contributes their unique skills, demonstrating that markets are anything but atomizing; rather, they forge connections between strangers from all corners of the globe.
Smith elaborates 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’s insights underscore that markets do not isolate us; they compel us to cooperate across vast distances and diverse industries.
Consider your recent coffee purchase again. Starbucks must coordinate with bean farmers, logistics companies, delivery drivers, warehouse staff, roasters, equipment makers, electricians, plumbers, accountants, and baristas. Each of these individuals may not know you personally, yet they collaborate daily to ensure your caffeine fix arrives promptly. This intricate web of cooperation is no accident; market prices convey essential information that guides individuals in meeting the desires of others.
While competition is undeniably a component of markets—evidenced by the plethora of books like Business Warfare and The Warfare of Business—it is crucial to recognize that businesses compete primarily to serve consumers better. Netflix didn’t triumph over Blockbuster through mere aggression; it did so by innovating to meet consumer demands for convenience, selection, and, ultimately, streaming capabilities. In this scenario, Netflix’s success stemmed from its ability to foster cooperation with viewers, who clearly preferred its service over that of Blockbuster.
A similar dynamic exists in the job market. If your ambition is to work at Starbucks, you may face competition from other candidates. However, winning this competition hinges on demonstrating how you can enhance customer experiences—be it through punctuality, skill in crafting beverages, or a friendly demeanor. Here, market competition again reflects a contest of who can cooperate most effectively.
It’s worth noting that democratic socialists cannot wholly reject competition. After all, democracy thrives on competition, and democratic socialists advocate for democratic principles in both the workplace and the political arena. If competing for dollars is deemed cold, it’s perplexing to argue that competing for votes would be any warmer. Market competition enables diverse individuals with varying values and priorities to collaborate, allowing them to coordinate their choices without necessarily sharing a common vision of justice. You and your barista need not agree on philosophical tenets to work together toward mutual benefit. Thus, far from isolating us, the free market fosters interdependence, uniting strangers in pursuit of shared prosperity.
