What are the characteristics of capitalistic democracy?

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Karyth Cara eNotes educator| Certified Educator

The concept of "capitalistic democracy" represents a duality, so the applicable characteristics will have a dual nature: there will two types of characteristics. The first set of characteristics will define an economic system while the second set will define a political system. Capitalistic democracy represents the merging of an economic approach with a political approach and is alternately called "democratic capitalism." 

An economic system is most simply defined as a system by which resources are allocated and by which goods and services are produced, distributed and consumed. A more complex definition is provided by S. Gabriel of Mount Holyoke College:

An economic system is comprised of the various processes of organizing and motivating labor, producing, distributing, and circulating of the fruits of human labor, including products and services, consumer goods, machines, tools, and other technology used as inputs to future production, and the infrastructure within and through which production, distribution, and circulation occurs. (S. Gabriel, Mount Holyoke College)

A political system is simply defined as the norms and laws of a nation or state that structure who has authority to govern the people and how it will be done: "A political system consists of the formal and informal structures which manifest the state's sovereignty over a territory and people" (R.J. Rummel on University of Hawai‘i). An elaboration on the definition is given by S. Gabriel of Mount Holyoke College:

[T]hese economic systems are usually defined within determinate political boundaries. ... bounding economic systems in this way provides a way of discussing how such systems are made possible and changed by the specific effects of politico-institutional, cultural, and environmental differences. Thus, one might discuss how the capitalist economic system of 1999 Germany is different from the capitalist economic system of 1999 Britain, for example.

The first part of discussing capitalistic democracy, then is to discuss "capitalism." Capitalism is defined as that economic system in which ownership is private and for which there is a public market for goods and services produced and in which there is a market for the labor forces employed to produce goods and services. Supply and demand and Adam Smith's "invisible hand" are felt and unfelt motivators in the capitalist "free" economic system: "free" because individuals, within the limits of their individual or household resources, freely participate in the marketplaces for labor and consumerism of goods and services.


  • free participation (within individual limitations)
  • private ownership
  • market places
  • supply and demand
  • "invisible hand" motivating to efficient private enterprise

The second part of discussing capitalistic democracy is to discuss "democracy." Democracy is defined as that political system in which the governing decision makers are elected in open, unrestrained, universal elections by voters who have freedom of choice and freedom of expression and unhampered access to alternate sources of information about issues critical to their well-being and to their selection of elected officials and representatives in a society that recognizes their autonomy (freedom) and citizenship and for which the government takes responsibility to a greater or lesser degree for their well-being.


  • government responsibility for well-being of citizens
  • autonomy and citizenship
  • freely elected officials and representatives
  • unhampered and alternate sources of information
  • decision makers chosen in free, universal elections

S. Gabriel, Mount Holyoke College

R.J. Rummel, University of Hawai‘i

yamaguchityler eNotes educator| Certified Educator

A capitalist society and a democratic one are not the same thing. However, what makes up both of them can be quite relatable. 

A democratic society is essentially when the majority of the citizens' voices are heard. For instance, the United States operates under a democracy, as citizens vote to decide who represents their country. In some other countries around the world, say North Korea, they are not under a democracy and the voice of their individuals is not nearly as well heard as it is in a democratic country.

Capitalism on the other hand, has more to do with the economic side of things. Like democracy, there is freedom in capitalism as well. However, this freedom has a different meaning to it. In a capitalist economy, it is essentially an every man for themselves type of atmosphere. The poor are typically born into poverty, and the wealthy are born into higher class. What capitalism also means is the ease and freedom of starting a business, moving capital, looking for employment, benefitting from Government spending, and having opportunity that is not available in say a communist type country.

Thus, although democracy and capitalism differ significantly, the characteristics of freedom and gaining power are mutual and shared in both.

pohnpei397 eNotes educator| Certified Educator

Capitalism and democracy do not have to go together, but they usually do because they are quite similar.  The main characteristics that the two share are biases in favor of individual freedom and power.

In both systems, individuals are given a great deal of freedom and power.  In a democracy, they have the freedom of speech and many other freedoms.  In capitalism, they have the freedom to use their property as they wish.  In democracy, people have the vote while in capitalism, their buying decisions essentially count as votes that determine what products will be produced.

Thus, the major characteristics of capitalistic democracy are a tendency to give power and rights to the people.

sid-sarfraz | Student

Capitalistic Democracy:-

Democracy basically means power by the people, for the people and to the people.

Capitalism means the majority decides who ever they want to be ruled under. 

Capitalism Democracy consists of the best economic system, capitalism, with the best governmental system, democracy. It is a unique system to be followed in which each and every individual has its freedom of choice, speech. In which buyers can decide whatever they want to produce and its quantity depending upon majority's preferences. Including equality basics. 

Characteristics of Capitalistic Democracy:-

  • It provides freedom of rights to individuals and power of decisions
  • Freedom of deciding the products to be produced of whatever quantity each individual prefers
  • Freedom of speech
  • Means of production are privately owned
  • Individuals are responsible for their own lives
  • Government has limited power according to which they can earn money through taxation and can control basic necessities provided to people. But cannot decide what to be produced etc
  • The majority's decisions are accepted
  • Freedom of religion
  • Freedom of occupation
  • Ownership or property rights are given to people
moustacio | Student

In theory, a democratic state is one whereby power is vested in the people (usually the majority groups) and diffused, instead of being monopolised by a few narrow groups. Universal suffrage is given to all adults and freedom of expression and choice is endorsed. Individual political rights are granted, protected and respected. Free, fair, competitive and regular elections are held to elect politicians to office. However, they can be voted out of office if they are seen as not fulfilling their obligations or meeting the needs of the people.

Capitalism, on the other hand, is a system of economic relations, in which private owners of means of production (commodities that are required to produce goods), known as the capitalists or bourgeoisie, generate profits by hiring non-owners of means of production, the proletariat or the workers, in return for wages. These wages are usually less than the products' worth. 

While both systems have been implemented simultaneously by states, they can, however, be seen as rather radically different. The idea of capitalism supports the establishment of a society based on economic classes, while democracy promotes the ideal of equality. In reality, individuals might not have much say in a capitalist democracy, since power is usually held by the big capitalists, who have the money and resources to support politicians financially.