Democracy Vs Capitalism Essay

1. Introduction

The debate of whether modern democratic societies are compatible with a capitalistic economic system has been an ongoing debate in academics. Is the ‘wedding’ between liberal democracy and capitalism bound to last? According to Fiss (1992), there is a strong natural link between liberal democracy and capitalism. Their communality lies in the conviction that all people have the right to take decisions as individuals and as citizens. However, in most recent years, an always growing number of scholars have argued that democracy and capitalism can never work together as they are founded on two separate principles. The global financial crisis of 2008 has been a strong reminder of the dangers of un-regulated economic markets. According

This paper claims that capitalism falls in the relationship between power and democracy because capitalism consequently leads to disproportionate gain of economic power among a certain group of people who may then want to control the majority. This paper reviews the relationship between democracy and capitalism in historical and theoretical terms and tries to investigate whether democracy and capitalism are compatible in the same government system or are rather incompatible. However, to understand the relationship between power and democracy in the form of capitalism, one must understand the meaning of each of these concepts separately in order to analyze how each of these concepts may combine and affect each other in different

Institutions in democratic societies will, therefore, help represent the interests of their members who are citizens in numerous ways such as helping the debate on given issues, trying to support individuals for public office, and lobbying to influence certain policy decisions. Through institutions, individuals will, therefore, have an avenue which they can use to participate meaningfully in government through their communities (Kaiser, 2016). Institutions which can help support democracy thus include labor unions, neighborhood groups, business associations, churches and environmental organizations. Consequently, in a democracy, the powers of the government are limited and clearly defined by law which impedes the government to have too much power to control private organizations as opposed to authoritarian governments whereby nearly all the institutions are licensed, watched, controlled and sometimes censored by the government (Kalathil, Boas, 2001). In democratic societies, despite the government not having control on private institutions these institutions will always hold the government accountable for its actions and lobby it on several occasions. Moreover, institutions