Capitalism and democracy

Since the inception of the discipline, the complex relationship between capitalism and democracy has been at the vanguard of political economy debates. This chapter unpacks these two key concepts and shines a light on the many complementarities and frictions between them. While democracy is based on the principle of equality (one person, one vote), capitalism allocates resources (if only ideally) based on ability, skill, merit, and productivity. We explore the interactions between capitalism and democracy and the tensions that these conflicting logics beget. To this end, this chapter reviews and conceptualises optimistic and pessimistic views on the questions if capitalism and democracy can ultimately coexist. We close the chapter with a discussion of democratic backsliding.