Co-existence of Democracy and Capitalism: A Reflection of Reciprocity or Ideology?

Year 2023, Volume: 32 Issue: 2, 311 - 355, 27.11.2023

Tareq Hossain Khan

https://doi.org/10.26650/siyasal.2023.32.1284826

Abstract

There are two types of premises discussing the relationship between democracy and capitalism. First, capitalism and democracy are interrelated since both ideologies protect the liberal concept of private property and the freedom of individuals. However, another bloc believes that these two ideologies are contradictory. Capitalism generates economic inequalities within society that create political disparity. Through a critical survey of some foundational texts and contemporary literature on liberal democracy and capitalism, this article examines their relationship and explains why and how capitalism and democracy support each other. It argues that capitalism and democracy fit structurally and mutually make a politico-economic order in which capitalism ensures its autonomies against the state, and democracy commands public policies in which economic structure does not ban the freedom of political choice. The article concludes that capitalism and democracy were reciprocally causal historically and serve as survival-shield of each other although they are not ideologically tied; democracy is the best institutional safeguard of market freedom and profit maximization, while capitalism creates the practical ground of political competition. Both are functionally well-suited as they ensure high centralization of power and capital in a few hands. This relationship is far more interest-oriented and power-centric than ideological.

Keywords

Democracy, capitalism, socialism, freedom, power-reciprocity

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