Capitalist Democracy can be defined as a dynamic complex of economic, political and moral-cultural ideology in which the means of production and distribution are predominantly owned by private individuals rather than the government.

It can also translate to mean an economic ideology based on a tripartite arrangement of a market-based economy that is predominantly centred on economic incentives through free markets, a democratic polity and a liberal, moral-cultural system that encourages pluralism.

Capitalist democracy is an economic system that is based on private property rights, economic justice, profit motive, competition, division of labour and requisite social cooperation.

Capitalist democracy is also a system of government which is established by majority votes cast in a regular free and fair election. This system of government advocates for both political and economic freedoms.

The marketplace is the centre of democratic capitalism and it determines what to produce, who to produce it and how the rewards of the economic process will be distributed. Under this arrangement, the market system has two advantages over other ways of organizing the economy which are:

  • that no one person or group of persons can control the marketplace, which means that power is diffused and cannot be monopolized by a party or a clique;
  • that the market system tends to reward efficiency with profits and punish inefficiency with losses. This is why the United States of America is seen as a cornerstone of this type of government

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