Capitalism and The Prisoner’s Dilemma

How a simple thought experiment demonstrates the problem with free market capitalism

Upon first introduction, the prisoners’ dilemma can come across as dry theory detached from everyday life. It is a thought experiment from the field of game theory, which is a branch of mathematics. Yet, the reason I am choosing to discuss the prisoner’s dilemma is because it helps explains why so many things go wrong in society. Or more specifically, why free market capitalism never seem to work as well as promised.

It is a thought experiment which helps illuminate the two most central themes of political and ideological conflicts: The friction between individualism and collectivism. Or, to frame it in another way, should decisions primarily be made individually and independently of others or collectively through some democratic process aimed to maximize the benefit of that decision to the community as a whole?

Capitalism and socialism are exponents of these two ideological opposites. Proponents of capitalism favor individual decision-making above all else, while socialists will elevate democratic decision-making; meaning, there is a preference for society or groups of people making decisions together for common good.