Difference Between Capitalism and Democracy | Capitalism vs Democracy

Key Difference – Capitalism vs Democracy

Capitalism and Democracy are two systems in the modern world, between which a clear difference can be identified. The significance and attention given to these two concepts are relatively gigantic due to its necessity for the modern day society. However, one can easily confuse the difference between Capitalism and Democracy. Hence, it would be best to define the two words at the beginning itself. Capitalism refers to a system in which a country’s trade and industry are controlled by private owners. The emergence and massive growth of capitalism are evident when tracing the history of the world. On the other hand, democracy refers to a form of government in which the people have a say in who should hold power. The key difference between capitalism and democracy is that while capitalism pertains to the economy of the state, democracy pertains to politics.

What is Capitalism?

According to the Oxford English Dictionary, capitalism can simply be defined as a system in which a country’s trade and industry are controlled by private owners. In the traditional societies, capitalist features were not much apparent. It was after the industrialization that the capitalist enterprise flourished. Within this capitalist economy, the production was owned by a small minority. The majority of the workers in the society had neither control over the production of goods nor ownership.

In this process, the monetary value gained significance as workers were hired for labor. These individuals had to work in insufferable conditions for long hours at the end of which they were paid a little amount.  This reduced the condition of the human being to a mere machine.  Workers suffered due to the excessive workload, lack of benefits such as health and rest. In some situations, people were out of work due to an economic recession.

Although the perilous conditions of Capitalism have certainly improved over the years, sociologists highlight that the worker has become alienated from his work and the society. When observing the contemporary setting, the growth of capitalism has been so widespread that it has become one of the founding pillars of the society.

Difference Between Capitalism and Democracy | Capitalism vs Democracy

What is Democracy?

Moving on to the concept of democracy, it can be defined as a form of government in which the people have a say in who should hold power. Seymour Lipset further explains that democracy as a political system supplies regular constitutional opportunities for changing the governing officials, and a social mechanism that permits the largest possible part of the population to influence major decisions by choosing among contenders for political office.

The idea of democracy enters the political arena with the concept of the modern state. Earlier, in more traditional settings, the ruling of the people was through monarchy. The monarchy was believed to possess absolute power and was not elected as today. However, it is necessary to highlight that although democracy is widely established it cannot be observed everywhere. Also in some situations there are loopholes in the political system where democracy fails. This highlights that there exists a clear difference between Capitalism and Democracy. This difference can be summarized as follows.

Difference Between Capitalism and Democracy | Capitalism vs Democracy

What is the Difference Between Capitalism and Democracy?

Definitions of Capitalism and Democracy:

Capitalism: It is a system in which a country’s trade and industry are controlled by private owners.

Democracy: It is a form of government in which the people have a say in who should hold power.

Characteristics of Capitalism and Democracy:


Capitalism: Capitalism is related to the economy.

Democracy: Democracy is related to politics.


Capitalism: The workers are mostly powerless due to the very structuring of capitalism.

Democracy: The individual has a lot of power in the political agendas of the country.


Capitalism: Although the working conditions have certainly improved over the years, the individual ability to bring about change is rather minimal.

Democracy: The individual can bring about changes as large populations influence state-level decisions.

Image Courtesy:
 “McKinley Prosperity” by Northwestern Litho. Co, Milwaukee [Public Domain] via Commons
 “Election MG 3455” by Rama – Own work. [CC BY-SA 2.0] fr via Commons
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