Democratic capitalism

Democratic capitalism, also referred to as market democracy, is a political and economic system. It integrates resource allocation by marginal productivity (synonymous with free-market capitalism), with policies of resource allocation by social entitlement. The policies which characterise the system are enacted by democratic governments. Democratic capitalism was implemented widely in the 20th century, particularly in Europe and the Western world after the Second World War. The coexistence of capitalism and democracy, particularly in Europe, was supported by the creation of the modern welfare state in the post-war period. The implementation of democratic capitalism typically involves the enactment of policies expanding the welfare state, strengthening the collective bargaining rights of employees, or strengthening competition laws. These policies are enacted in a capitalist economy characterized by the right to private ownership of property. Catholic social teaching offers support for a communitarian form of democratic capitalism with an emphasis on the preservation of human dignity. Democratic capitalism is a type of political and economic system characterised by resource allocation according to both marginal productivity and social need, as determined by decisions reached through democratic politics. It is marked by democratic elections, freedom, and rule of law, characteristics typically associated with democracy. It retains a free-market economic system with an emphasis on private enterprise. Professor of Entrepreneurship Elias G. Carayannis and Arisitidis Kaloudis, Economics Professor at the Norwegian University of Science and Technology (NTNU), describe democratic capitalism as an economic system which combines robust competitiveness with sustainable entrepreneurship, with the aim of innovation and providing opportunities for economic prosperity to all citizens. Dr Edward Younkins, professor at Wheeling Jesuit University, described democratic capitalism as a “dynamic complex of economic, political, moral-cultural, ideological, and institutional forces”, which serves to maximize social welfare within a free market economy.