That free market capitalism, if it existed, would atomize and commodify people is a charge that's been around quite a while. It pops up for sure whenever someone means to disparage the free market economy.
Atomization is the idea that people, like the early conception of atoms, are fully self-sufficient, autonomous, in need of nobody, ruggedly individualist through and through. Is this view of people really assumed in a capitalist, free market economy?
Remembering first that no such economy exists, it isn't possible to test the idea based on experience. What we live in is a mixed economic system and that means there are socialist, communist, fascist, capitalist, welfare statist and who knows what other economic styles in evidence through most developed countries, including America which is closely associated with capitalism but wherein free market capitalism hasn't ever been realized. Zillions of economic regulations, meddling by politicians and bureaucrats, infest America's economic order, as do government ownership of some enterprises (e.g., Amtrak, public forests, beaches and parks, first class mail delivery, roads, etc., etc.). America, also, is home to innumerable more or less sizable experiments in collectivist forms of life such as convents, kibbutzes, communes, and the like, and they all have economic features that impact the larger society.
But when it comes to political systems they can be scrutinized to a degree without their being fully actualized. Thought experiments, for instance, are one way to examine them. And, of course, some of them have been dominant enough in various periods of human history around the globe so that those interested can study them closely enough. So we might then conclude that whether free market capitalism tends to atomize the citizenry in America can be discerned if one pays close attention.
So are Americans atomized? Not by a long shot. What is true, however, is that in the field of economics, where free market capitalism is studied most directly, many use a model of the economy that assumes that the agents acting in it are atomized. Everyone is a utility maximizer, claim such prominent economists as the late George Stigler. Such folks do assume, but usually only for theoretical purposes, that all agents in the free market act self-sufficiently and choose all their social relationships, although only in a limited respect. Yet what the economist uses as a convenient tool is usually moderated by building into the model elements that closely resemble actual social lives. And there is a plethora of community life in America, consisting of ethnic, religious, athletic, and other groups by no means only of business corporations. What distinguishes them mainly from communities elsewhere is that most people largely enjoy the exit option – they are free to leave. And champions of collectivism tend to find this irksome. They don't want folks to enlist but to be conscripted. For them to belong means not just to be closely, even intimately, associated but out and out kept tied down.
What about commodification? This, too, is a possibility but for most reasonable people only some with whom they work and trade get treated as a commodity, like most of us treat the cashier at the grocery store. But there are pals, colleagues and friends, as well as those in one's family, who are anything but commodified.
People in a largely free society are able to compartmentalize – with just a few close friends they will also have thousands of associates. And who could wish it otherwise? The Marxian dream of a society filled with people who are all bosom bodies of one another is silly. How many weddings would one have to attend, funerals, birthday parties, etc., if that were something real?
Before one falls for the critique based on the charges of atomization and commodification in free markets consider the alternative. Jean Paul Sartre's famous quip about "Hell is other people" would come true big time in such a place. And indeed in societies where socialism or communism are approximated tend to be filled with people who are not very fond of each other, squabble a lot, and would just as soon leave.