An underappreciated story of the Progressive Movement and its progeny (The Fair Deal, The New Deal, The Great Society, The New New Deal, and so on) is its emphasis on collaboration over competition. FDR put it this way:
Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.
This has it exactly backwards. It is cooperation that is useful to a certain point, and then we must rely on competition.
Cooperation arises from trust. Robert Axelrod, in his 1984 book The Evolution of Cooperation, used game theory to describe the way in which cooperative behavior arises from competitive game structures:
For cooperation to emerge, the interaction must extend over an indefinite (or at least an unknown) number of moves…For cooperation to prove stable, the future must have a sufficiently large shadow. This means that the importance of the next encounter between the same two individuals must be great enough to make defection an unprofitable strategy…In order for cooperation to get started in the first place, one more condition is required. The problem is that in a world of unconditional defection, a single individual who offers cooperation cannot prosper unless some others are around who will reciprocate. On the other hand, cooperation can emerge from small clusters of discriminating individuals as long as these individuals have even a small proportion of their interactions with each other.
“Indefinite number of moves,” “shadow of the future,” “small cluster of discriminating individuals” – these are characteristics that break down as the size of a human grouping grows. With your neighbors, you’re likely to interact with them repeatedly in the future, the future interactions are likely to be important, and there aren’t that many of them. But as the scale grows, these conditions erode, and with them the possibility of cooperation.
That’s when competition kicks in. The fact is that human beings compete in groups; there is a significant advantage to be gained by having multiple skill sets and personalities united in a common effort. (Engineers and salespeople are famously different, but rely heavily upon one another for their livelihood.) There is cooperation within these groups, but competition between them.Smith's "Invisible Hand" is required precisely when actual hands start to become invisible due to the size of the group.