Capitalist democracy is a political, economic and social ideology that involves the combination of a democratic political system with a capitalist economic system. It is based on a tripartite arrangement of a private sector-driven market economy based primarily on a democratic policy, economic incentives through free markets, fiscal responsibility and a liberal moral-cultural system which encourages pluralism (Novak, 1982). It is an ideology that supports a capitalist economy that is under the control of a democratic political system which has the support of the majority. Democratic capitalism wasn't completely established until after the Second World War and was first only introduced to North America and Western Europe. It functioned astonishingly
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Neoliberalism is a term that became prevalent in the 1970s and it is a form of capitalism that is opposed to regulation and in favour of freeing-up existing markets and creating new ones. Thatcher and Reagan, who came to power at the end of the seventies, were major agents of change towards neoliberalism (Jary, 2012). In his book The Strange Non-Death of Neoliberalism, Crouch is heavily critical of neoliberalism and questions how it has survived the numerous crisis that it has faced. He believes that neoliberalism has allowed transnational corporations to flourish and gain too much power. (Crouch, 2009, pg. 126) argues that 'economic globalisation has further enhanced the capacity of transnational corporations to translate their economic strength into political power.' He goes on to state that these transnational corporations operate as a third force alongside the market and the state. Crouch believes that the global firms gain power because they have the capacity to 'regime shop', meaning they can direct their investments to countries that have the most favourable rules (Crouch, 2009). This allows for them play off states against one another, resulting in wages and costs being driven down (Jary, 2012). All of this leads to an economy dominated by giant firms that have a very high concentration of wealth. These firms are then able to convert this wealth into political influence making them political actors. (Crouch, 2009, pg. 70) describes this as 'economic and political power translating into each other'. It is obviously undemocratic for these corporations to hold so much power because they are unelected and not accountable to the public, especially as they are multinational. The economics professor, Charles Lindblom, agrees with Crouch, that corporations are at odds with a democratic society because they have become too powerful. Implicit in his view is the belief that a
Neoliberalism is a term that became prevalent in the 1970s and it is a form of capitalism that is opposed to regulation and in favour of freeing-up existing markets and creating new ones. Thatcher and Reagan, who came to power at the end of the seventies, were major agents of change towards neoliberalism (Jary, 2012). In his book The Strange Non-Death of Neoliberalism, Crouch is heavily critical of neoliberalism and questions how it has survived the numerous crisis that it has faced. He believes that neoliberalism has allowed transnational corporations to flourish and gain too much power. (Crouch, 2009, pg. 126) argues that 'economic globalisation has further enhanced the capacity of transnational corporations to translate their economic strength into political power.' He goes on to state that these transnational corporations operate as a third force alongside the market and the state. Crouch believes that the global firms gain power because they have the capacity to 'regime shop', meaning they can direct their investments to countries that have the most favourable rules (Crouch, 2009). This allows for them play off states against one another, resulting in wages and costs being driven down (Jary, 2012). All of this leads to an economy dominated by giant firms that have a very high concentration of wealth. These firms are then able to convert this wealth into political influence making them political actors. (Crouch, 2009, pg. 70) describes this as 'economic and political power translating into each other'. It is obviously undemocratic for these corporations to hold so much power because they are unelected and not accountable to the public, especially as they are multinational. The economics professor, Charles Lindblom, agrees with Crouch, that corporations are at odds with a democratic society because they have become too powerful. Implicit in his view is the belief that a