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Capitalism And Democracy

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Political Science 200




The purpose of this essay is to examine the two cases of the United States and France in the development of democracy and capitalism. It will discuss the specific differences in the development of democracy in the two states and attempt to answer the question as to why the expansion of capitalism is treated as the primary factor responsible for the emergence of democracy. My central argument is that capitalism and freedom are interrelated. Capitalism and Democracy are compatible and a capitalist/democratic system is superior to any other combination of government and market, and historically provides greater social and economic prosperity then any other system in history. A world dominated by Capitalism and Democracy is a better world. First, I will provide an analysis and discuss the development of democracy in the United States and France. Then, I will proceed to explain why capitalism is a primary factor in the emergence of democracy. Finally, I will provide an elaborate discussion on why democracy and capitalism provides greater social and economic prosperity more so than any other government/market system ever established.


Government and market systems are set up to provide social prosperity for its citizens and domestic security. However, as Milton Friedman argues, "It is widely believed that politics and economics are separate and largely unconnected; that individual freedom is a political problem and material welfare an economical problem; and that any kind of political arrangements can be combined with any kind of economic arrangements." The chief contemporary manifestation of this idea is the advocacy of "democratic socialism" by many who condemn out of hand the restrictions on individual freedom imposed by "Totalitarian socialism in Russia (formerly the Soviet Union) and who are persuaded that it is possible for a country to adopt the essential features of Russian economic arrangements and yet to ensure individual freedom through political arrangements." (Friedman, p7)

According to Friedman, this claim is a delusion and, "that only certain combinations of political and economic arrangements are possible, and that in particular, a society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom." (Friedman, p8) In short, Friedman argues that only a market economy can guarantee individual freedom.


Friedman's belief in a limited government is supported by his desires to restrict the scope of government's authority in the collective lives of individuals and to decentralize the power base of government to prevent a person's unwanted entanglements with a federal bureaucracy. The political views he espouses are clearly rooted in the concept of early liberalism as found in the late eighteenth and the early nineteenth centuries. Friedman states that political freedom means the "...absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce...The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated- a system of checks and balances. By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. Friedman believes that the greater the economic freedom or competition, the less discrimination there will be.

I am in agreement with Friedman on the fact that government does need to be restricted. I also feel that capitalism and democracy are interrelated and create the best type of economical/political system that promotes the greatest amount of social and economic prosperity.


In Barrington Moore's Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, he argues that, "Striking down slavery was a decisive step, an act at least as important as the striking down of absolute monarchy in the English Civil War and the French Revolution, an essential preliminary for further advances. Like these violent upheaval, the main achievements in our Civil War were political in the broad sense..." During the time right before the French Revolution, its nobility ran France and its economy depended heavily on the load that the peasants carried. The leading French sector became an appanage of the king and led to the destruction of the aristocracy. French nobility relied heavily on what it extracted from peasants. By the late 14th and 15th centuries, many basic features began to appear in France. A seigneur devoted little attention to the cultivation of his own demesne, which was small in size. His demesne shrunk as the overlord granted out sections of it in small parcels to the peasants in return for a portion of the crop. The seigneur usually preferred the land to be let out as a whole in hopes of regaining it back. However, this was not always possible. The burden of cultivation was thrown on the tenants managing large units, or more often directly on the peasants. However, the peasants managed to escape from personal servitude, mainly by capitalizing on the demand for labor in the countryside that increased as the growing towns presented the possibility of another way of life. By the Revolution, peasants possessed close to de facto property rights.

For the latter part of the seventeenth century and the opening decade of the eighteenth century, the key agricultural problem was to get grain to the classes that ate bread but did not grow wheat. The general problem of the grain problem was on of controlling a limited supply from a limited area. There was also a major wine problem. Wine was a commercial product and a very important one. To grow grapes meant to be propelled into the market, "to become dependent on the acts of the kings and chancellors and to try to influence them, to find businesslike methods and account books more congenial that the beau geste, the sword, largesse, and other aristocratic ways. However, a long depression in the wine trade was a decisive factor in accounting for the generally backward state of the French economy and the outbreak of the Revolution. Nine-tenths of the wine was consumed in France itself, as estimated by French economic historian C.E. Labrousse. Bad transportation, vine culture spread over the country, and most of the



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