Posted on 10/21/2025 12:53:04 PM PDT by E. Pluribus Unum
Democracy is liberalism’s “political corollary.”
Many people argue that democracy is incompatible with capitalism but they differ on whether democracy will kill capitalism or whether capitalism will kill democracy. Peter Thiel, for example, famously said, “I no longer believe that freedom and democracy are compatible.” Thiel’s argument has a long pedigree. The classical economists from Adam Smith to John Stuart Mill all worried that democracy would kill capitalism. Even Marx and Engels agreed with the analysis arguing that under democracy “The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State…” they differed only in welcoming such a revolution.
On the other side of the aisle we have the moderns such as Robert Reich and Joseph Stiglitz who argue in Reich’s words that Capitalism is Killing Democracy as “Corporations” and “billionaire capitalists have invested ever greater sums in lobbying, public relations, and even bribes and kickbacks, seeking laws that give them a competitive advantage over their rivals…”
A third argument, consistent with the views of Hayek, Mises, Friedman and others, is that capitalism and democracy are compatible and even mutually reinforcing. Ludwig von Mises, for example, argued that “Liberalism must necessarily demand democracy as its political corollary.”
My latest paper (WP version) (with Vincent Geloso) is in the new book Can Democracy and Capitalism Be Reconciled? We take the third view and show empirically that capitalism and democracy go hand in hand. We also provide some mechanisms for this correlation which I may discuss in a future post.
The data is very clear that democracy and...
(Excerpt) Read more at fee.org ...
“Democracy” and capitalism are not only compatible—they reinforce each other.
Representative government protects individual freedom, and capitalism is simply the economic expression of that freedom: the right to create, produce, work, and trade with minimal government interference—only what is necessary to maintain fairness, property rights, and the rule of law.
Democracy in America is not in the government of the Republic.
Democracy in America is in the marketplace.
We vote with our feet where to live, city, burbs or rural.
We vote with our feet where to shop, where to worship, where to celebrate, where to mourn.
We vote with our money what to buy and where to buy it.
(apologies to that Frenchie)
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