New York City Mayor Zoran Mamdani recently caused a bit of a stir when he contrasted the “coldness of rugged individualism” with the “warmth of collectivism.” This framework reflects the well-known criticism that capitalism forces people to act alone as “atomistic individuals.” The idea is: Because markets organize our economic lives around competition and self-interest, they do great damage to social structures and our relationships. Organizing life around competition causes people to see each other as rivals rather than partners. Simply put, capitalism pits us against each other, but socialism unites us. Apart from the fact that collectivist regimes are not necessarily kind to the people living under them, this view holds capitalism back.
Let’s start with a quick observation about our own economic life under capitalism. Think about this week. How many cooperative interactions have you had and how many competitive interactions have you had?
When you bought coffee at Starbucks this morning, you probably didn’t compete with anyone. When I paid my phone bill, bought groceries or gas, or went to the movies, I didn’t enter into a zero-sum struggle. In return, you entered into a series of voluntary transactions that were mutually beneficial. When you give someone money, they give you something you wanted more than that money. Everyone walked away better. In the words of Adam Smith: “It is not from the benevolence of the butcher, brewer, or baker that we expect our dinner, but from a consideration of their own interests.”
In contrast, competition rarely appears in everyday economic life. Businesses compete with other businesses for customers, and you’ve probably competed with other businesses for a job at least once. But we collaborate far more often than we compete. And look at what market competition actually looks like. It’s a competition to see who can best serve others. You might say these are competitions to discover the best ways to collaborate and who are the best collaborators (more on this below).
Not surprisingly, Smith was well aware of the cooperative nature of markets. He wrote that it was a wool coat.
“It is the result of the collective labor of a large number of workers: shepherds, wool sorters, wool combers or carders, dyers, scribblers, spinners, weavers, fullers, dressers, and many others, each with their own different skills. and how many merchants and carriers must have been employed to carry the materials from some of these workers to others who frequently lived there. “In a very remote part of the country! How many trades and seafarers, and especially how many shipbuilders, sailors, sailmakers, and rope-makers, were employed to bring together the various chemicals (often coming from the remotest parts of the world) used by the dyers!”
Smith continues, but there is a character limit here. The point is that markets don’t atomize us. On the contrary, they bring strangers around the world into cooperation.
Think about the last time you bought coffee. Starbucks needs to work with bean farmers, transportation companies, truck drivers, warehouse workers, roasters, equipment manufacturers, electricians, plumbers, accountants, and baristas. None of these people know you, yet they work together on ways to ensure you get your caffeine fix at 7:43 a.m. every day. This is no coincidence. The prices that the market offers give people the information they need to understand what others want and give them an incentive to give it.
There is no denying that the market involves competition. If you go to the business section of a bookstore, you can find titles like Business Warfare and The Warfare of Business. But companies compete to see who can best serve consumers. Netflix beat Blockbuster by finding a better way to give viewers what they want: convenience, selection, no late fees, and, ultimately, streaming. Simply put, Netflix won because consumers preferred working with Netflix over Blockbuster.
A similar point applies to competition in the job market. Maybe you not only want to buy coffee at Starbucks, but you also want to work at Starbucks. But this means you will have to compete with other applicants who also want the job. Once again, let’s take a look at what an applicant needs to win this contest. They need to demonstrate that they do their best job to increase customer satisfaction, whether it’s being more punctual, making mochas more efficiently, or being more likely to serve drinks with a smile. Market competition is a competition to see who can collaborate most effectively with other companies.
In any case, democratic socialists cannot oppose all competition. After all, democracy requires competition, and democratic socialists want democracy in the workplace as well as in politics. If fighting for dollars is frigid, it’s hard to see why fighting for votes should be any warmer. Market competition allows millions of people with different values, plans, and priorities to work together with little agreement, helping them reconcile many different choices. You and your barista don’t have to agree on principles of justice to work together and make each other’s lives better. Far from being atomized or frigid, the free market is an interdependent system that brings together strangers and works together for mutual benefit.
