The Ideology Of Capitalism And Democracy

Capitalism – an ideology

Stefan Sonderling (2010: 308) states that ideology is concerned with the study of ideas and how people and societies think, and that, because of this, it is one of the most difficult concepts to define. As a concept, it stretches over a broad spectrum with different meanings and functions. In this essay I aim to elucidate capitalism as an ideology by briefly covering aspects such as origin, socio-economic history, main beliefs, and its effect on modern society.

Andrew Zimbalist defines pure capitalism as a “system wherein all of the means of production (physical capital) are privately owned and run by the capitalist class for a profit, while other people are mostly working class with no capital.”(1988: p6-7)

Zimbalist

In the 20th century, capitalism became the most widely spread system in the world, with the ‘mixed economy’ being its central form in the majority of Western countries, especially the USA. James adds that industrialisation permitted cheap production, while a population spike caused a greater demand for products (2007: 6).

Capitalism and democracy have a relationship that can be described as hostile, in both theory and practise. Democracy became mainstream around the same time as capitalism, in the 19th century, which lead to capitalists having mutual agreements among each other.

Joseph T. Single (2004:9) argues that although capitalistic growth of the economy had led to democracy in the past, in the future it may fail to do so. Countries with a capitalistic economic system have prospered under oppressive or authoritarian governments. The People’s Republic of China is a fascinating example. Its private sector has grown exponentially since its creation, regardless of the authoritarian

Main principles

Capitalism can be summarised as a production-for-exchange system. It is mainly driven by greed and the yearning for personal accumulation within a free market. These markets are in-turn driven by the consumers and their desires and needs.

The accumulation of capital is one of the main tenets of capitalism. Within capitalism, the profit motive is a theory which states that the fundamental objective of a business is to make money. This is straightforward thinking and thus works on the rational choice theory which dictates that businesses want to increase profits by only benefiting themselves.

Another objective of capitalism is the private ownership of the production process. Within this lies the process of turning physical assets into capital, which can then be used more resourcefully further in the market economy (De Soto 2000;