Capitalism has been the foundation on which powerhouses such as America have built their economy. However, the newly elected mayor of New York, Zohran Mamdani, built his campaign on advocating for change which fundamentally opposes this ideology. Is this change confined to a single state? Or is it a more telling sign of the world’s turn on capitalism?
[Sidd is a fourth-year Commerce and Law student and a Publications Officer at ESSA. With a keen interest in behavioural economics, macroeconomic trends, and the history of economic thought, Sidd enjoys unpacking the complexities behind how individuals, institutions, and ideologies shape economic outcomes. He brings a curious and analytical mindset to his work, aiming to make economic ideas more engaging and accessible for students. Through his writing, Sidd hopes to spark deeper conversations about how economic theory has evolved—and continues to influence—modern policymaking and everyday decision-making.]
Who is Zohran Mamdani?
On November 4th 2025, Zohran Mamdani was elected as the youngest Mayor of New York City since 1892. This has caused a stir in America’s political and economic world due to his policies of strong government intervention and unyielding mission to ‘tax the rich’, possibly sparking a new age of economic ideology, one which leaves capitalism behind.
Mamdani has referred to himself numerous times as a “democratic socialist”, crediting a lot of his beliefs and ideologies behind this label, but what does it actually mean? And why is it suspected to cause change?
Democratic Socialism
Democratic Socialism originated in the mid-19th century through the British Chartist movement, which was initiated by the working class for political reform through equal sized electoral districts, universal manhood suffrage and annual parliaments. Although the movement did not immediately achieve its goals, its principles formed the school of thought which eventually evolved into democratic socialism as we know it.
So what does democratic socialism aim to do? Although there are many different interpretations, the ideology essentially seeks to combine the traditional principle of social ownership of the means of production with democratic control rather than state ownership. In theory, this system results in the rejection of capitalism rather than state regulation, decentralisation and the creation of a socialist economy.
Economic effect?
During Mamdani’s campaign, his most prominent and advertised policies were to freeze the rent, to make public buses free and to deliver free childcare. Although at face value these policies are beneficial to the majority of New Yorkers, there is criticism of the long term effects they may have.
Freezing the rent is within the direct power of the Mayor of New York, and therefore a likely policy that Mamdani may act on. There is a clear, immediate benefit for tenants through rent capping, as this creates housing stability and a reduction in displacement. Nevertheless, the Institute of Economic Affairs (IEA) found through numerous studies, that in the long term, rent freezing results in a fall in the supply and quality of rental housing, a reduction in construction of new housing and mobility among tenants.
A similar trend can be seen for Mamdani’s other policies, which provide relief for low income households and increase social equity, but at the cost of significant revenue loss, decreases in demand and a fall in market efficiency. However, the criticism of these policies from IEA and other economists stems from a capitalist viewpoint, which holds efficiency and profit at the highest precedence. Thus, Mamdani’s goal as a democratic socialist likely differs, aiming for economic equality and systematic change towards a strong welfare state.
What does the future hold?
It is likely too soon to tell whether Mamdani’s leadership will have any permanent effect, or whether the trend of departing from capitalism will spread to other countries. As America is a politically divided country, it is unlikely that the Republican-friendly states will adopt any similar policies in the near future. However, it may be possible for neighbouring states such as Pennsylvania or Massachusetts to increase state regulation if there is success found in New York.
In terms of Melbourne, Mamdani’s policies most likely coincide with The Greens party, both aiming to provide free childcare and raise the minimum wage. However, we have yet to see any form of leadership close to Mamdani win the majority in Australia, as the pattern of elections can be described as the oscillation of power between the Labour and Liberal party.
Nonetheless, due to the current cost of living crisis and inflation of the housing market within Australia, the younger generation are faced with increased difficulty to live comfortably. As a result, it is possible we may see a push for increased state intervention or socialist leaning policies, as this would provide relief for the working class and economic equality through democratic means.
References
Mason, J. W. (2025). What Zohran Can Accomplish. Dissent, 72(3), 95-103.
Wright, A. (2019). Social democracy and democratic socialism. In Contemporary Political Ideologies (pp. 78-99). Routledge.
Merriam-Webster Dictionary. (2023). Merriam-Webster.com. https://www.merriam-webster.com/dictionary/democratic%20socialism
UK Parliament. (2019). The Chartist movement. UK Parliament; UK Parliament. https://www.parliament.uk/about/living-heritage/transformingsociety/electionsvoting/chartists/overview/chartistmovement/
Knight, B. (2023, March 13). All aboard! Should public transport be free for everyone? UNSW Sites. https://www.unsw.edu.au/newsroom/news/2023/03/all-aboard–should-public-transport-be-free-for-everyone-
Kholodilin, K. (2024, August 15). Rent controls do far more harm than good, comprehensive review finds. Institute of Economic Affairs. https://iea.org.uk/media/rent-controls-do-far-more-harm-than-good-comprehensive-review-finds/
Pazmino, G. (2025, November 4). Here’s a look at Zohran Mamdani’s policy ideas. CNN. https://edition.cnn.com/2025/11/04/politics/policy-ideas-zohran-mamdani-nyc-election
