Capitalism and democracy Essay Example

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The twist as to whether democracy and capitalism can co-exist has often been raised. From a layman’s point of view both systems can perfectly interact with neither of the two being weakened. Pundits as well as economists however , are worried by the growing tension between the two systems in a number of ways.

Controlled mobility of factors of production

In a capitalist econonmy , there is free flow of factors of production, market prices are determined by the natural forces of demand and supply, however social justice tends to try and water down this approach by developing social systems disrupt the natural control of the market.

Capitalism aims at wealth being under control by few individuals, however social justice was to be persued, resources would be evenly distributed to all individuals in the society. The latter appproach tends to take resources from the few individuals and re- distributes to the larger population hence being in conflict with capitalism.

In a capitalist econonmy , there is free flow of factors of production, market prices are determined by the natural forces of demand and supply, however social justice tends to try and water down this approach by developing social systems disrupt the natural control of the market (Gaus, 2003).

Long process of making decisions

Bureaucracy is the most notable reason as to why there is tension between captalism and democracy. Democratic governments make decision based on a consulative process that always tries to invoke the peoples will through parliamentary processes. Social justice involves a consulative process that can consume alot of time before an agreement is reached , this happens at the expense of the incentive to invest . In the longrun democracy can weaken the incentive to invest since so much time can be wasted during the consutative process .

Conflict between political and economic systems

Conflict between political and economic systems is another reason as to why tension between capitalism and democracy is growing,it has offen been assumed that democracy capitalism can co-exist ,this is because both systems have done so since world war 2, however it has not been an easy ride.

Political and economic systems have not been in harmony since the end of world war ii, political systems have persued ideologies that do not perfectly fit with the economic times, for example governments accross europe have either persued inflationary or high interest rates to meet the growing demands of its workforce. The best example depicting a disharmony between a political and economic systems is theurrent crisis in Greece. The political system in Greece developed policies that were not in line with capitalism , this has led to a massive economic failure in the country (Gray, 2006

In -equality

In -equality is another reason as to why there is tension between capitalism and democracy. Democracy persues a pro –social justice approach ,which in turn is not in line with capitalism.

Wide gap between the rich and poor

Capitalism widens the gap between the rich and the poor, this is by having few individuals controlling economic resources. This approach is not in line with either the maxis theory nor the social justice theory. Capitalism is inclined to have resources and wealth held by few individuals in the society, the government will be working hard to strike a balance of providing social ammenities and paying off the few individuals who own the resources. Capitalism results to a unbalanced society where few individuals control the economy therefore ,where social justice prevails natives will be of the opnion that democracy is underminig their moral value.

Corrupt democracy

The tension between capitalism and democracy also exists because capitalism tends to corrupt democracy. There is a change to the real reason as to why democracy exist , democratically elected people are now using their positions to raise their standards of living at the expense of the larger population. In the longrun, democracy has developed capitalistic ideologies therefore losing its core value. It is due to a corrupt democracy that some individuals as well companies do not follow the natural course of free flow of resources, the corrupt democracy can result to increased prices of goods and services. It has also contributed in widening the gap between the rich and the poor (Gerald and Kelvin, 2009).

Un-tammed growth of democracy

Increased democracy can hinder the government’s ability to meet the needs of its citizens in an adequate manner, this situation has been clearly highlighted in the united states of america where runaway economic success has undermined the governments capacity to respond to citizens concerns.

Conventional wisdom holds that where either capitalism or democracy florishes the other must follow,however, in recent times countries with a a high level of capital development have registered a low levels of democracy, this countiries include Russia and China. This is enough reason as to why the tension between capitalism and democracy is growing.

The social justice theory proposes that all men have an obligation to “do unto others as would have them do unto you.” The social justice theory forms the basis of most societies as well as nations . In reference to the social justice theory governments have an obligation towards its citizens, this obligations include maintainig law and order, offering health care services, governance e.t.c. Social justice theories are predominant in societies where democracy has thrived. (Bentham,1970).

Devaluation of morals

Capitalism has serious effects on character, studies have revealed that capitalism drives societies away from the basic values that promote peaceful co-existence , therefore both capitalism and democracy will exist in tension. The best example to depict how capitalism drives societies away from core values can be given by : where capitalism exists, people desire to achieve goals without considering whether their success will result to achievement of intrinsic goals, some philosophers such as plato hold the notion that capitalism results to loss of moral values.

Exploitation of the working force

The marxist theory believes that capitalism can only thrive on the exploitation of the working class. The theorytakes dialect approach towards life, therefore everything has two sides, it believes that capitalism is is both an economic and political sytem.Marxism believes that economic conflict creates the gap between being rich and poor. Marxists believe that capitalism has resulted to a gap between being rich and poor.

Capitalists have to exploit the working class for the system to be successful, this explain why some countries are rich despite having lesser natural resources. Capitalism has thrives under a vicious circle .

It shapes the education system, which is its cornerstone, without the education system the economy would undergo a massive failure since jobs would be un available, employment keeps the system alive. In the longrun capitalism controls both political and economic systems, based on the marxist theorem , both capitalism and democracy have a tensed affair.

Other theories of justice include the utilitarian theory of justice and the libertarianism theory of justice. utilitarian theory of justice is based on morality, protagonists to this theory have the view justice should follow morality in a priority order.The theory promotes goodness in things and thinks that goodness can be found in single goods such as happiness well-being and the desire satisfaction.

This theory advocates for social welfare in the belief that everyone’s well-being has a moral background.The theory promotes free trade since free trade can can aid in rewarding personal efforts ,free trade also encourages people to be more productive, the theory also allows free movement of goods across markets.

In relation to the tension between democracy and capitalism , ulitarian theory of justice , tension between the two ( democracy and capitalism ) grows due to the following reasons.

Inequality between workers.

The utilitarian theory of justice advocates for equality in terms of income to all members of the society. The theory questions the amount of benefits the rich people benefit from having numerous luxuries while the poor can bearly afford necessities. The theory proposes that the rich should be taxed highly ,the tax proceeds should be distributed to the less fortunate members of the society. The government should therfore intervene by creating laws that will maximize happiness and minimize evil through redistribution of income, these approach would result to tension between capitalism and democracy ( Gray, 2006).

Redstribution of wealth.

The theory als holds that people have equal rights to own property, capitalism has an alternative view of few people holding resources hence capitalism and democracy would clash. The attempt to equaly distribute wealth , gives the government more power to enforce equality among members of the society, capitalists would want redistribution of wealth to be left out to the market force, therefore un-natural approaches to re-distribution of wealth would cause tension between capitalism and democracy.

The utilitarian principle to a standard social welfare to all members of a society causes tension between capitalism and democracy because the principle adocates for redistribution of wealth ( Buchanan and Gordon,1966).

The Nozick’s libertarian theory of justice favours negative rights ,small governments and a free market . utilitarian theory of justice ascribe to an extreme view that denies existence of positive rights. This theory expalins why there is tension between democracy and capitalism in the following ways.

Taxation as a form of theft.

Democratic governments do tax their citizens to obtain revenue ,which is then used to provide social ammenities such as building roads and running of the government, however the theory holds that taxation violates the right to own property. It feels that people are coerced to pay taxes and that the government takes away what people have legitimately accuired without their permission. Democratic governments are use taxation as a way of financing their activities, capitalists feel that this is a dis incentive to work or invest, thus the tension between democracy and the latter will continue to grow. This theory promotes encourages people to grab natural resources at will which in line with the capitalism ideology but clashes with democracy and its rule of law (Bird, 1999).

Absence of social welfare

The libertarian theory does not promote social welfare, the theory indicates that we have no ethical obligation to help others and even if we did the theory of justice would overide any other moral consideration that would be looming around.There is a tensed affair between capitalism and democracy at this juncture, since democracy promotes social welfare while the theory views social welfare as a drawback to development, the theory promotes capitalism (Cranston, 1967).


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