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Tension between capitalism and democracy

The relationship between capital and democracy has continuously been in tension. Capitalism only feels harmless if it is ruled by whoever possesses capital. While democracy, on the other hand, is the rule of many people who doesn’t have capital or explanations to recognize with the requirements of capitalism. The tension between capitalism and democracy does not just remain at the institutional level but is again stretched into the democratic society through civil society. The tension is also stretched into the democratic culture through our capitalist morals and through our solid wish to consume. There is competition between the gathering and concentration of fortune by the capitalists and the request for the reallocation of wealth by the employees and their relatives (KUHNER, 2014). The capitalist fears the underprivileged majorities taking authority and hence uses the political power to prevent this from taking place. This has led to liberal democracy as an approach to ensuring this through methods that might change over time, however maintaining the objective of limitations on voting, total dominance of individual belongings rights, an electoral structure with numerous safety valves, and fraudulent politicians. Liberal democracy is the present method of Democracy in Europe, and has solid democratic bodies and method like unbiased elections, several party system, and the rule of law (KUHNER, 2014). On the other hand, liberal democracy is a system of government in which representative democracy happens under the code of liberalism.

The exclusive concentration of the democratic spirit is on open, unbiased and competitive elections in liberal democracy. In the liberal democracy, they believe in the belief of the unseen hand of the market that distributes capitals and profits efficiently and without biases. This cannot be conceivable under a state-managed economy. The basic value of capitalism and democracy, is the free market competition. This brings about efficiency and hence leading to the existence of the fittest.

On the other hand, Capitalism interferes into other scopes of democracy alongside democracy as a governmental form of organization. Capitalism is existing in our social life, and our cultural life hence interferes the democratic value established that describes Western societies. Western society trusts in Capitalism. The present European democracy has been robbed of the democratic spirit through the introduction of capitalistic market systems and arrangements on the social life and political life. Capitalism is a political and economic structure in which a country’s industry and trade are regulated by private owners to gain returns, and not by the state. Private possession is a vital feature of capitalism (WOLFF, 2012).The current sub-form of capitalism is neo-liberalism. Capitalism is the only social alternative method left for arranging societies after the fall of the communist bloc.

Capitalism results in globalizing the liberal democratic states. The main reasons for globalization are production, global trade and consumption of goods. Prices and profits of the free-market capitalism are high and are unevenly allocated within the international and national societies. The political elites largely obtain the benefits, while the non-elite groups bear the costs. Capitalism occurs in various forms that include coordinated market economies and liberal market economies. The type of capitalism existing today is affecting the relationship concerning capitalism and democracy. A coordinated market economy is a friendly type of capitalism because it displays fewer clashes with the democratic order since more influence and regulation over economic practices lies with the state. The big problem with capitalism is how to regulate and supervise a global economy through different domestic states and individuals (WOLFF, 2012).

There is serious tension between capitalism and democracy due to the following reasons. A first point of tension is the distribution of authority that a democracy needs and that capitalism appear to challenge. In democracy, authority is linked to nationality while in capitalism authority is linked to property. The linking of power to property or even beside nationality is a danger to democratic citizen contribution (PIKETTY & GOLDHAMMER, 2014). Within democracy in a nation, there is the classified order of power delivery. Despite the fact that decision-making authority lies with the people, but the power to express and perform the public spirit lies in the state. Power no longer lies with the citizen.

The tension of power distribution is created on two pillars, firstly the distribution of authority associated to nationality as a democratic principle against wealth as a capitalist practice (PRZEWORSKI, 2008). The second pillar is the distribution of authority within hierarchical systems in competition within opaque systems, which leads to a mixture of economics and politics. The two pillars of democratic lifecycle should interrelate but be separated. Democracy, being a political system of organization, has clear delivery of power, divided to govern each other. Capitalism needs an unclear and dangerous distribution of supremacy where supremacy is reproduced, for those who have wealth and power, because wealth is power (PIKETTY & GOLDHAMMER, 2014).
Furthermore as the economic system restricts with the political system through liberal petitioning, dual recruitment, and soft methods of fraud, trade interests become overrepresented. Again Political lifecycle changes to economic life in the democratic operational institutions and in the civil society. Another clash between democracy and capitalism can be viewed in the business culture of capitalism, which brings about competition and existence of the fittest (CAMMACK, 2007). But democracy is the inclusivity of everyone that is the reverse of competition. Hence, liberal democracy requires confining some capitalistic powers on its people while legalizing capitalistic dealings at the same time.

Capitalism supports the serious following of certain democratic morals at the expense of other democratic morals which is essentially entrenched in the differing nature of other democratic morals itself (WOOD, 2006). The single value of capitalism is market rationality. Other values for example security, freedom or any other value are applied flexibly when they suit the reason of rational act. The individualism that go along with the unregulated entrepreneurial capitalism permits for any value that some researchers set identical to no value as all are permitted. Another conflict between capitalism and democracy is debt. Debt provides possibilities for some to obtain own prosperity by loaning from those who already have more prosperity than they presently require for their economic activities. In capitalism, debt is a necessity for investing (WOOD, 2006). Entrepreneurial capitalism thrives from the investment. In the financial area, the trade of debt provides possibilities to create long profit-chains from debt. The possibility of making debt even assures the normally high standard of living in Europe. Debt permits people to build houses, the country to offer public goods like infrastructures, governments to construct schools and it permits easy payment of the debt borrowed in an earlier time (GLASSMAN, 2011). Nevertheless, debt has got a dark side. The lender or creditor gets power over the debtor till the debt is paid back. Another tension is that in democracy importance lies at the public concern, while capitalism perceives the private concern as a right and vehicle of innovation, development and strength behind any economic movement (SHAPIRO, 2012). The principle of a democratic non-controlled market is that government should in the public concern not limit the free economic private concern of its people so that the economy can flourish under simple market rules. This matches public and private concern, but it makes public into private concern, which is a minor but critical difference. Liberalization frees private concern from control, allowing it to concentrate and hence creating private power out of the regulation of the government (BOWLES & GINTIS, 2007). The other tension between capitalism and democracy is the civil society. A previous additional governmental force of movement activism which can possibly check, via forms of resistance is today paralyzed and is driven by capitalist people with self-interest goals. When comparing to the business competition, it indicates the past times of a solid and politically lively civil society. The civil society is the balanced form through which capitalism and democracy are settled.

In conclusion because capitalism is the rule of minor elite in the economy, and democracy is the rule of everyone, the choice of capitalism as the foundation for democracy is doubtful (BOWLES & GINTIS, 2007). Capitalism is dictatorial since it permits for concentrated regulation by the capitalist, who can easily hire and fire workers irrespective of the wishes of the workers community. Democratic regulation of a business by workers removes capitalism. The tension between capitalism and democracy are shown by the United States in which capitalist economic structure destabilizes the democratic structure. This happens through compromising values that democracy originated from which are, equality and equal chances for all (COE & WILBER, 2009). The capitalist group in the US and its rising impact over politicians is causing a great risk to democratic practices in the nation. Lastly, global capitalism has put a stop to the starting of democracy in many nations in the developing world. The west being led by the US has made extensive efforts in Saudi Arabia to maintain the fraudulent monarchy going for decades so as to protect its welfares in the region (BOWLES & GINTIS, 2007). The same state is repeated in Egypt in which oppressive regime was produced for over thirty years based on the same reasons. It, therefore, becomes apparent that capitalist interests create the appearance of democratic governments that help the expansion process in the developing world extremely unlikely under these situations.


BOWLES, S., & GINTIS, H. (2007). Democracy and capitalism: property, community and the contradictions of modern social thought. New York, Basic Books.

CAMMACK, P. A. (2007). Capitalism and democracy in the Third World: the doctrine for political development. London, Leicester University Press.

COE, R. D., & WILBER, C. K. (2009). Capitalism and democracy: Schumpeter revisited. Notre Dame, Ind, University of Notre Dame Press.

GLASSMAN, R. M. (2011). China in transition: communism, capitalism, and democracy. New York, Praeger.

KUHNER, T. K. (2014). Capitalism v. democracy: money in politics and the free market constitution.

PIKETTY, T., & GOLDHAMMER, A. (2014). Capital in the twenty-first century.

PRZEWORSKI, A. (2008). Capitalism and social democracy. Cambridge [Cambridgeshire], Cambridge University Press.

SHAPIRO, S. (2012). Between capitalism and democracy: educational policy and the crisis of the welfare state. New York, Bergin & Garvey.

WOLFF, R. D. (2012). Democracy at work: a cure for capitalism.

WOOD, E. M. (2006). Democracy against capitalism: renewing historical materialism. Cambridge, Cambridge Univ. Press.