Capitalism is the prevailing economic system in the developed world, and is generally viewed as having defeated more governmentally centred propositions of economic regulation. However, the drawbacks of various forms of democratic capitalism are also easily apparent, and while it is easy to say that capitalism is the most popular economic ideology, to say that it is superior is questionable. This text means to outline the pros and cons of the various forms of capitalism, differentiating between them by comparing their views on government regulation and involvement within a capitalist economy. The way capitalism should be working and the way it actually is functioning in the world today will also be taken into account.
Democracy and capitalism seem to, conceptually at least, go hand in hand. Democracy provides the maximum amount of reasonable political freedom to its citizens: freedom of speech, freedom of assembly, and so forth. Does it not then only make sense to attach itself to a system like capitalism, which provides near absolute economic freedom? The answer to this, however, is far more complex than a cursory glance at the subject can provide. While democracy and capitalism both advocate a great deal of freedom, the competitive nature of capitalism is unseen in democracy, where everyone is given an equal say in how society should be run. Competition between citizens is uncharacteristic of a democracy, where citizens assemble as a community to make decisions on how their society should function. .
Capitalism in its purest form is a free market - an economy that is free from any government involvement. However, in the late nineteenth century some debate sparked over this issue as it was suggested that some government involvement in the market may help offset or even prevent economic depression (Sargent 83-84). It then became popular belief that some government expenditure within the economy was indeed beneficial, however, in the 1980s and 1990s government regulation began reversing itself again except the programs which proved "immensely popular with citizens and politically difficult or impossible to eliminate" (Sargent 85).