Can New York’s Mamdani save capitalism?

American capitalism stands at a crossroads. If capitalism falters, democracy will erode and human progress will slow. New York has begun an intense experiment to preserve the system. Korea remains quiet. Is Korean capitalism truly healthy?

Kim Byung-yeon

The author is a chair professor of economics at Seoul National University.

A political upheaval shook New York, the heart of American capitalism, when 34-year-old Zohran Mamdani was elected mayor a month ago. His platform, striking for its scale and clarity, resonated with working families and younger voters. He promised free city bus service, universal child care for infants from six weeks old to age five and low-cost essentials through city-run grocery stores. He pledged to freeze rents for about one million stabilized apartments and build 200,000 new homes over the next decade. To fund these plans, he proposed raising the top corporate tax rate from 7.25 percent to 11.5 percent and adding two percentage points to the income tax rate for those earning more than $1 million a year.

New York City Mayor-elect Zohran Mamdani (L) and U.S. Senator Bernie Sanders join striking Starbucks workers in New York on Dec. 1, [AFP/YONHAP]

Mamdani’s win reignited the long-running debate over capitalism and socialism. He is a member of the Democratic Socialists of America, or DSA, which advocates public ownership in essential sectors and limited planning in the economy. U.S. President Donald Trump went as far as calling him “a communist who will destroy New York.” Yet describing Mamdani as a socialist intent on replacing capitalism is inaccurate. His platform largely accepts private ownership and the central role of market pricing. In that sense, his proposals fit more comfortably within the spectrum of “varieties of capitalism” rather than any recognizable form of socialism.

U.S. President Donald Trump and New York City Mayor-elect Zohran Mamdani shake hands as they meet in the Oval Office at the White House on Nov. 21. [REUTERS/YONHAP]

Still, New York’s capitalism is clearly strained. The city is home to 8.5 million people — roughly 17 percent of Korea’s population — yet its economy is almost three-quarters the size of Korea’s entire GDP. Extreme inequality sits beneath that prosperity. New York’s Gini coefficient is 0.56, far above the U.S. average of 0.48 and even higher than levels seen in many South American countries, which rank among the world’s most unequal. Median household income in the city is similar to the U.S. average, but rent costs are two and a half times higher and groceries cost 20 percent more. The top one percent earns the equivalent of about two billion won a year ($1.36 million), while the bottom 20 percent lives on one-hundredth of that income. Residents share the same dense neighborhoods, where those struggling economically see signs of extreme wealth every day. It is fertile ground for socialist sentiment. In this context, Mamdani’s agenda is not a socialist revolution but an attempt by a self-described socialist to save capitalism weakened by staggering inequality.

Yet his chances of rescuing capitalism are slim. His vision is ambitious, but the tools he relies upon are old. Some of his measures could yield small gains. Universal child care and city-run grocery stores may be tested gradually. But rent freezes and free bus service carry hidden dangers. Over time, they degrade service quality or become financially unsustainable, and once introduced, they are politically difficult to unwind. Remedies borrowed from earlier eras may not cure an advanced system facing structural challenges.

Historically, capitalism has survived crises through creativity and flexibility. By expanding political rights, it evolved from aristocratic capitalism to democratic capitalism, ushering in an era of record prosperity and freedom. When inequality deepened, welfare systems emerged to protect the system’s durability, enabling capitalism to outperform socialism. The most successful reforms favored newcomers rather than entrenched interests. They redistributed political power, protected ordinary citizens and reassured younger generations through inclusive institutions. As a result, capitalism has lasted more than 300 years, while socialist systems collapsed within decades.

A campaign poster for New York City Mayor-elect Zohran Mamdani is displayed on a fence on Nov. 6 in the Brooklyn borough of New York City. With the election of Zohran Mamdani as New York City's next mayor, a new focus is being placed on the high cost of living in one of the world's most expensive cities. Mamdani pledged on the campaign trail to freeze rents, tax the wealthy, and provide free buses for New Yorkers, among other issues. It is estimated that the cost of living in New York City is 132 percent higher than the national average. [AFP/YONHAP]

Experiments aimed at strengthening capitalism must continue. There is no quick solution that can transform society at once. In today’s complex environment, there is no shortcut to saving capitalism. Research must expand, and findings must accumulate to guide policy. Some efforts should focus on strengthening trust between the wealthy and the working class, and between older and younger generations. Other initiatives should pursue labor-market and education reform. Policies should rest on voluntariness, trust and efficiency, while engaging private companies and using advanced technologies. Tax incentives could encourage firms to use idle facilities and networks for public benefit. AI might help stabilize the prices of essential goods by adjusting supply in real time. New ways must be found to build trust across generations and income groups. One example is giving high-income and older citizens the option to forgo certain universal benefits so that resources can be directed to vulnerable households and younger people. Such choices could help rebuild social trust in a divided society.

American capitalism stands at a crossroads. If capitalism falters, democracy will erode and human progress will slow. New York has begun an intense experiment to preserve the system. Korea remains quiet. Is Korean capitalism truly healthy?

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.