Liberty and Community: Marx and Smith on Commercial Societies

James Otteson,

Release Date
November 7, 2011


Free Markets and Capitalism

According to Professor James Otteson, one of the greatest challenges often presented against individual liberty and free markets is that they are atomizing. Essentially, it is claimed that people within a commercial society begin to view one another as competitors. This critique goes as far back as at least Karl Marx.
Although there is some truth to this, what is often overlooked by these critics is the enormous amount of social cooperation that takes place within a commercial society. For instance, a raggedy old wool coat may seem simple enough, but bringing that coat to the market required countless individuals to cooperate with one another. It required people to raise and take care of sheep, harvest wool, transform wool into a usable material, dye material, cut material, sew material into a coat, and transport the coat to market. Each one of these steps required social cooperation and tools made by other people. This insight goes as far back as at least Adam Smith.
Bringing this insight into the 21st century, with all the goods and services that are available to us, you can begin to see the massive amount of social cooperation that takes place in a modern commercial society.

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Liberty and Community: Marx and Smith on Commercial Societies
One of the challenges that people raise to individual liberty and the free markets that often accompany individual liberty is that it’s atomizing, destructive of community. This is an old charge; it goes back at least to Marx, who argued that what happens under commercial societies is that people begin to view one another as competitors. I succeed by making you fail or by achieving over you. So I no longer see you as my brother in arms; I see you as my enemy, my competitor.
There’s some truth to this. There certainly is in commercial society an element of competition, of competitiveness, but what that charge and what Marx himself doesn’t notice is that there is also an enormous amount of cooperation. A commercial society cannot succeed without cooperation. Now this aspect of commercial society was illustrated at least as far back as Adam Smith’s Wealth of Nations. In 1776, when the Wealth of Nations came out, Adam Smith used the example of a day laborer, the lowest of the low day laborer in Scotland who has a woolen coat. Think of the coat that that laborer wears. As tattered and as inexpensive as it might be, how many people must have played some role in bringing that coat to him?
So you think about the people who sewed it and cut it and dyed it, the people who transported the materials; think about the sheep farm where the wool was gathered and the dyers and the cutters and the transporters. Once you start elaborating on all of the people who played some role in bringing that coat, you begin to appreciate just how many people had to cooperate at all of these very many stages in order to bring just the simple woolen coat. Now if you bring that insight into the 21st century, you think about the enormous number of goods and services that we have and how dependent they are on the widespread extensive cooperation of millions of unknown people, that is people who don’t know one another, who must cooperate in order to bring these goods and services to markets.
So there certainly is competition, but you cannot understand the commercial society without also understanding its necessary component of cooperation.