What are the advantages and disadvantages of capitalist democracy?

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A capitalist democracy is a combination of a capitalist economic system and a democratic political system. Thus, advantages and disadvantages of the hybrid system can be derived from the two systems forming the capitalist democracy.

Advantages of a capitalist democracy include the following:

  • A capitalist democracy establishes a price system that ensures resources are conserved by producing what is needed in the market and anticipating consumer preferences.
  • The market increases the need for useful skills and motivates individuals towards acquiring these skills for the benefit of the economy.
  • Competition between the different organizations helps reduce costs and improve overall efficiency.
  • Socially and politically, the interests of the general public are protected through their elected representatives.
  • Policies will be established for the benefit of (ideally most of) the citizens.

Disadvantages of a capitalist democracy include the following:

  • Businesses may engage in unscrupulous activities, including hiking prices to drive up profits.
  • Due to complete reliance on the factors of demand and supply, a strong class distinction between the rich and the poor is established.
  • At the social and political level, decision-making and implementation may become a slow process due to bureaucracy.
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Capitalism provides an opportunity for people to prosper and allows them to grow rich. However, it also divides the society into 'have's and 'have not' s. 

Democracy allows participation of everyone and ensures the interests of everyone.

A combination of these systems (as seen in United States) offers certain advantages and disadvantages.

A capitalist democracy will have a number of big businesses and a large number of rich people. The presence of big revenue and in turn taxes will allow the democracy to spend on facilities and services that can be used by all. A socialist democracy suffers from lack of resources, which should not be as big a problem here. A democracy allows stability in administration, which in turn helps entrepreneurs grow and take risks. And since democracy aims to provide education to all, a large workforce is available for entrepreneurs to hire (even if it is a selective process). 

However, rich people may not want to pay for those who can't. Simply put, taxes paid by rich people will be used to build infrastructure (parks, bridges, roads, etc) and services (such as medical care) and even the people who can't pay taxes use them. This system works by imposing high tax rates on rich individuals and businesses. Capitalist democracy also suffers from frequent government intervention in the market. This sometimes leads to businesses bribing the politicians and introduces corruption in the system.

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What are the advantages and disadvantages of living in a capitalist society?

The advantages of living in a capitalist society include greater wealth and opportunity, and the disadvantages include a tendency toward a large wealth gap between rich and poor.

In general, capitalism is much better than its competitors at generating wealth, which can then form the basis of a society's overall level of prosperity. Primarily, this is because—as the great champion of capitalism, the Scottish economist and philosopher Adam Smith argued—those who engage in economic activity are motivated by the desire to make a profit.

The things that we need on a daily basis, such as food, clothing, and shelter, are provided for us by people seeking to make a profit. Those who do this aren't motivated by the goodness of their hearts; they provide us with our needs because they want to make a profit.

And yet somehow, by a process that Smith in a striking metaphor calls the invisible hand, the selfishness of these economic actors ultimately redounds to the benefit of all through greater wealth, the provision of more products, and greater opportunity. These unintended effects undoubtedly constitute capitalism's greatest strength.

At the same time, it is impossible to overlook the obvious drawbacks of living in a capitalist society. For one thing, there is the tendency for large gaps in wealth to open up between the rich and the poor. The inner dynamic of capitalism ensures that those at the top of society are rewarded while those at the bottom have to make do with a tiny share of the wealth generated by the capitalist system.

Another disadvantage to living in a capitalist society is that profit so often comes ahead of people. Even if one accepts Smith's argument that everyone in society will ultimately benefit from the workings of the free market, in the meantime, many people seem to derive no benefit at all from the capitalist system.

They have basic human needs, such as healthcare, and yet so many people in capitalist societies have been deprived of this most basic of goods because they can't afford to pay for it. Capitalism puts a price tag on just about everything, to the extent that so many human needs go unaddressed because there is no profit to be made from fulfilling them.

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