Democracy and capitalism relationship tips

Both democracy and capitalism give the freedom to choose between alternatives - The Economic Times

democracy and capitalism relationship tips

The relationship between capitalism and democracy can be discussed, in my point .. and concepts built around them, following Spinoza's and Weber's advice . But, in truth, capitalism parasitizes Democracy. Democracy is a Theoretically, they work in mutually enhancing ways: 1) Democracies do The problem really is how to balance the relationship between democracy and capitalism. On the one. The relation between democracy and capital has always been a tense one, of even total contradiction. Capitalism only feels safe it is ruled by.

Yet, democracy is viewed as a highly moral system.

Capitalism and Democracy

Because it empowers citizens through free choice. That makes it superior to any other form of government. Lenin criticised democracy on exactly the same ground that many criticise capitalism. He said elected politicians were opportunistic rascals representing their own class interest, not the public interest. So, he proposed replacing them with a politburo of noble intellectuals genuinely working for the masses.

Capitalism and Democracy [part 1]

Alas, this endeavour ended in mass murder, misery and ultimate collapse. Democracy has a thousand flaws. Yet, all autocracies ultimately failed because of a fatal flaw: For the same reason, centrally-planned economies also failed. These too aimed to create noble economic systems free of the greed and grab of capitalism.

Yet, they failed for the same reason as autocracies: People repeatedly fled from communist to capitalist countries: Now, the communist states had full employment and assured security for the aged and handicapped.

Yet, people fled to capitalist countries where neither jobs nor welfare were assured. What was assured was freedom to choose, and that mattered above all.

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They wanted freedom to choose their political leaders, freedom to choose their job or business, and freedom to buy goods they liked. It too has rascals parading as leaders.

democracy and capitalism relationship tips

But it too turns out to be the best. This is not just a matter of efficiency. It is, above all, a matter of high morality. Freedom is a fundamental human right.

It has conceived liberal democracy as the mode of guaranteeing this through measures that may change over time, but maintaining the goal: In the immediate post-war period, very few countries had democracy. Vast regions of the world were subject to European colonialism, which served to consolidate European-North American capitalism. Europe was devastated by a war provoked by German supremacy and in the East there was a consolidation of the communist regime, which was seen as an alternative to liberal democracy.

democracy and capitalism relationship tips

It was in this context that so-called democratic capitalism emerged, a system that consisted of the idea that, in order to be compatible with democracy, capitalism ought to be strongly regulated. This entailed the nationalisation of key sectors of the economy, progressive taxation, the imposition of collective bargaining and even — as happened in the West Germany of that era — the participation of workers in the management of firms.

This perspective indicates that the capitalist economy is a separate entity form the democratic political system, because these are two different institutions into which an individual can state his or her preferences, depending on whether they are economically or politically motivated. That same person could only express those preferences in the political forum, because they alone would have no power to change the structure of the economy such that it would seem advantageous to lower taxes or sign a free trade agreement.

Both democracy and capitalism give the freedom to choose between alternatives

On the same note, a person could express their political beliefs in the economy, by no longer selling their labour to the firm who employs them, perhaps because they support a particular political party of which the labourer is not fond.

If that labourer provided a service that the employer could not find elsewhere, then the employer would fold, thus stating a political belief in the economic sphere of influence. The point illustrated here is that the two concepts of democracy politics and capitalism economy are not as independent of one another as Dryzek may argue in that example.

As Schumpeter argues, the association of capitalism and democracy is purely coincidental, and that there are no necessary linkages between the two4. The support for this position comes from his belief that democracy is possible under both capitalism and socialism, but that a social democracy would not be a liberal democracy5, but logic dictates that this interpretation is incorrect on two counts. The first being the fact that democracy as we have come to understand it entails that the majority of the people will get what they want, and if there is a choice to be made between economic hardship through socialism, and economic prosperity for the majority through capitalism, then the majority will chose to have prosperity over hardship, because it is common sense.

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This simple example presupposes the historical reality of socialism being economically inefficient and having a lower standard of living than capitalism, as well as the voting public being rational in that they will choose what offers them the most material wealth as opposed to an arrangement that offers them little material wealth.

On the same note, Berger argues that all democracies are capitalist, no democracies are socialist, but many capitalist societies are not democratic6.

democracy and capitalism relationship tips

These examples represent only a very small percentage of the arguments that support the claim that the concepts of capitalism and democracy are not related, but their counterarguments do support the notion that capitalism and democracy are intrinsically linked.

To further the analysis of why capitalism and democracy are linked, the following examples will provide the proof of their immediate relationship, as well as the ability of those examples to stand up to an honest defence. To begin this examination into the relationship between capitalism and democracy, Friedman suggests that it is not possible to decouple the two because history indicates that capitalism is a necessary condition for freedom, but not a sufficient condition in itself7.

This begs the question of how freedom can be related to democracy when Friedman himself does not like to equate the two. His reasons for not wanting to equate the two are not the concern of this work, so for the purposes of this argument, I must use logic to connect the two. To argue from the other side, the word freedom could be linked to democracy in that those who are free would have democracy as their form of government, because to have total freedom would be anarchy, which would include freedom to limit the freedom of others, and the next logical step down is democracy, which at least provides for a limitation on this level freedom that could possibly restrict the freedom of others, if the majority are rational and insist that the actions of those who would limit freedom be restrained themselves.

The argument is dizzying at best, but the logic is necessary to continue the explanation of how capitalism is necessary for a democracy to work, but it is not the only element that is needed. To prove the first part of this statement is correct, namely the need for capitalism to be in place to have a democratic system of government, one must look at what capitalism provides to make a working democracy possible.

One of the things that capitalism provides to make democracy possible is the affluence necessary maximize free time, or more specifically, to allow people to concentrate on other matters of interest after their basic needs for survival have been met. At the next level, it gives the individual the capital necessary to give financial support to the groups to which he or she belonged, so they could collectively raise support through lobbying or the mass media for their cause.

democracy and capitalism relationship tips

The initial counter argument to this is that this arrangement has lead to a mass societywhereby humankind is experiencing a radical dehumanization of life, and that humankind is losing out on the personal human contact that help us treat each other better, not as objects to be bought or sold8. The first primary counterargument would state that because of this relationship, capitalism and democracy are to be considered separate from each other because the are studied in terms of one another in this instance.

However, the prevailing notion is that because you must have capitalism to provide the affluence necessary to devote time to democracy, they are essentially linked. The second primary counterargument would illustrate the fact that even if the economic system was poor, and even with a failed form of capitalism, the people would still vote, and there could still be democracy.

democracy and capitalism relationship tips

But what kind of democracy would that be, with people living hand to mouth and not having the time to study long term solutions instead of quick-fixes. So to have a working democracy one must have free time, and to have free time one must have some degree of affluence, and history has shown that capitalist societies are more affluent than non-capitalist societies, therefore one must have capitalism to have a democracy that works.

The second part of the initial premise that capitalism is not the only detail needed to have a democracy is obvious, because there must be a host of other factors, but it not relevant to this work, because it argues neither for nor against a direct connection between capitalism and democracy.

There is another important piece of evidence regarding the direct connection between capitalism and democracy in that capitalism must have a government in place that will carry out the function of enforcing contracts, securing private property rights, and issuing and controlling the value of currency9, This is the position that both Dryzek and Friedman take on the issue.