Shyam Prasad Mainali

Democracy is a system of governance whereby voters choose their leadership as they prefer. Capitalism is an economic system driven by private ownership of principal commodities. In capitalism, investments play dominant roles determined through private decisions. Matters concerning investment amount and nature, pricing, production, distribution of commodities and creation of competitive environment is taken freely by the private sector. Free and open market mechanism is a must for capitalism.

Capitalism and democracy are interwoven. In the absence of capitalism, it is not possible to attend democracy. In other part democracy always furnishes favourable environment through the intervention of different government policies and steps taken to facilitate and strengthen free market. Democracy is a major contributor to capitalism and other fundamental human values. For the purpose of democratic set up, capitalism should be encouraged throughout the world. Countries without the implementation of democratic principles and capitalism should be denounced and encouraged to adopt them. Relationship between these two is quite reciprocal and complimentary in each other.

Barriers
In many countries of the world have ratified, embraced, and established democracy through capitalism. Rest of the countries are also in process of adopting and implementing strategies to ensure and strengthen democracy. Various methods have been accepted for the purpose of spreading it in a long run. A number of barriers have been faced in the process of spreading its value. Diverse aspects of democracy have been spread by capitalism. Most of the democratic people have strong belief that capitalism and free market economy are indispensable for the promotion of democracy.

However, there is question on the effectiveness of democracy based on capitalism. Interrelationship depends on the adoptability of the interconnection of capitalism and democracy. Such interconnection could be highly influenced by the theories of international relations. Realism theory focuses on the motives leading to proper security, control, and capitalism. Likewise, liberalism proposes that the relationship which exists between countries regarding the principles of democracy and capitalism are concrete evidence. International structure and systems have an important role in international relations. The absence of authority from a central point led to dilemma in the process of the promotion of capitalism and democracy as well.

Capitalism thus plays prominent role in international relations and democracy.  States use democratic provisions when making decisions and act in the interest of the nation through free market mechanism and capitalism. Democratic exercises work as the vein to promote capitalism. Analysts claim interest of the nation is addressed by the policy makers, making fruit full laws to facilitate the need of the people at large. Even in a country led by dictator has been interfered with the provision of capitalism. Citizens in democracy prefer to decide on the business prospects of the country. This denotes and justifies the relationship between the two phenomena. Most of the democratic governments measure their economic stability in relation to free market provisions. Countries that uphold democratic principles are usually peaceful if compared with authoritarian regimes.

Democracy is hardly possible in the absence of capitalistic economy. Capitalistic system of economy always enhances the aspects of free market which is regarded as a considerable provision of democracy. Individuals are free to exercise in the market without government intervention because there is no control of the government in the demand and supply side. Business decisions are made democratically. Market is open to all potential investors. The state usually gets involved in the process of transaction through regulation of activities, taxes and through subsidies.

The free market separates economic power and political power. This brings about a balance that gives freedom to individuals. The mechanism controlling the economy does not relate to the will of any person. It denotes that free market ensures economic power. Such power is not concentrated in the hands of the political players. It is well understood that free market mechanism is supported by historical evidence showing the relationship that exists between free market and development of political freedom and democracy. Without first gaining free market and economic freedom, no society that has gained democracy. Individuals are always lucrative to satisfy their democratic needs based on free choice.

Economic goals
In order to efficiently achieve economic goals, the distribution of products should be free and capitalistic. This means all the distribution; the cooperation and the coordination of activities should be democratic and free of all external interference and interventions as well. Globally, no single country has been absolutely isolated from capitalism. Even in communism, it is not completely neglected as Karl Marx recognises that capitalists have the ability to use advanced technology to produce commodities cheaply. Any state system is being promoted through the successful exercises of capitalism.

Democracy is a system of governance to be ruled by own preferred representative. Citizens enjoy their rights. Capitalism is an economic system freely enjoyed by private ownership of principal goods and services. In a free market, private sector determines investments through decisions, prices, production and distribution of commodities. In the absence of gaining economic freedom no society can strengthen democracy. Capitalism is important in the quest for political freedom. It is difficult even to imagine of democracy in the absence of capitalism. Likewise, democracy is a major contributor to capitalism, it should be accepted and encouraged globally. These two phenomena are quite complementary in each other.

(Mainali is former government secretary.)