Can Capitalism Save Democracy?

Abstract: While capitalism today is widely seen as a threat to democracy, the free market plays a central role in fostering pluralism. A strong and autonomous private sector is critical to the creation of a robust opposition and an independent civil society that are central to democratic resilience. At the same time, even rich and powerful private sectors in high-income countries may be vulnerable to government pressure with regulatory coercion—a fact that makes these countries potentially susceptible to democratic backsliding. Indeed, state capture of business—to a greater degree than business capture of the state— represents the most direct threat to democratic survival.