We felt that we needed at least enough states so there could be this cooperative, competitive environment where each of the states could watch and benefit from the actions of the others and each could compete for their constituents and their counties

I interpret "could watch and benefit from the actions of the others" as "could watch the actions of others and benefit from the actions of the others".

But someone interpret it as "could watch from the actions of others and benefit from the actions of others".

Which one is right?

Full context:

Why six states, rather than four or five or seven?

Well, seven is a question. We did consider five and we did consider more than six. We felt that we needed at least enough states so there could be this cooperative, competitive environment where each of the states could watch and benefit from the actions of the others and each could compete for their constituents and their counties. A lot of people have asked me why not two or three? My belief is with two or three you’d end up with the same kind of environment, where you’d end up with two monopolies or three monopolies.

Watch from the actions of others does not mean anything (the phrase is ungrammatical)

You can watch from a distance, watch from your couch, but you cannot watch from someone's actions.

So the only possible and correct interpretation is the one you mentioned:

Watch the actions of others and benefit from the actions of the others.

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