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Difference between Capitalism and Democracy

Difference between Capitalism and Democracy

Capitalism vs. Democracy

Difference between Capitalism and Democracy: – To know and understand the difference between capitalism and democracy, we need to understand both democracy and capitalism individually first. So let’s with defining both the terms capitalism and democracy, then later we will talk about the difference between capitalism and democracy.

Difference between Capitalism and Democracy

Capitalism and Democracy are one of the most talked about types of governments since both of them are matters of interest for different kinds of people. The primary difference between democracy and capitalism is based on the very characteristics of both concepts: the former one is a kind of federal government and a political system, whereas the last mentioned is a kind of governance and an economic model. Furthermore, democracy is established “by individuals for individuals”, while capitalism is marketed “by privates for private and egoistic gain”.


The word democracy – that was first coined in Old Greece – is the blend of two words: Demos, which means people, and Kratos, means guideline. As one can easily anticipate that this term means “rule by folks”. As explained by the most popular U.S. Chief Executive Abraham Lincoln, democracy is the “administration of the individuals, by the people, for the people.


Capitalism is a fairly modern principle. This term originated by the end of the 18th century and became the dominating social and economic thinking among the privates through the 19th century. The capitalist thinking has badly influenced and damaged almost every part of our life, and has already established a significant effect on the structure of our own societies. Specifically, the quick succession of the administrative center gave rise to the well-known occurrence of globalization, and, in most cases, has allowed economic ideals to prevail over politics and social beliefs.


Quite often, without having any knowledge of background, the terms of capitalism and democracy have erroneously been used as synonyms. The free-market school of thought has been associated with the flexibility naturally associated with democracy. However, both concepts are totally different from each other:

  • The Democratic argument includes (or, at least, will include) every resident; while capitalism is very elitist (focuses on rich people or businesses)
  • Democracy is aimed at creating just, identical and free societies; while capitalism creates deeply unequal societies and widens the space between poor and wealthy (in other words, it introduces ways and concepts, with the help of which, the rich get richer and poor get poorer)
  • Democracy is a politics related principle while capitalism can be a financial process – and most of the time, it prevails over politics values
  • In a democratic culture, the federal government intervenes in the monetary sphere and helps to protect it under the law of the employees, whereas in a capitalist system the federal government holds no power in terms of the monetary values
  • Both democracy and capitalism pervade every part of people’s lives, nevertheless they achieve this task in completely different ways.
  • The idea of democracy is rolling out over decades and has been often associated with the financial and communal development and liberty. Consequently, the key pillar of the capitalist paradigm is free-market; it isn’t surprising that both may be mixed up. Yet, as we’ve seen, while democracy is extensive, inclusive and good, capitalism is selfish, egoistic, elitist and exclusive.

I’m sure after reading above valid points of difference between capitalism and democracy, now you people will be in a position to understand both the terms very well.  We should not confuse about democracy and capitalism, both have a lot differences as we can see here.

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