In a capitalist system, businesses compete with one another to produce the most innovative merchandise at the most competitive prices; in turn, consumers freely select the most desirable products. According to Adam Smith, this competition, when left unregulated, fosters maximum wealth and the common good (Economist 2-3). Indeed, unmanaged competition may ensure prices are affordable for consumers (2). However, in a global free market that exploits cheap labour; market demand dwindles, resulting in excessive credit lending and debt crises (Li 295-6). In this way, capitalism’s efficiency and promotion of the common good is questionable.
Since the resurgence of unregulated capitalism in the late 20th century, social inequalities have grown significantly, with one percent of the most powerful countries attaining more wealth than half the world (Dunklin 2). Canada’s income gap has also risen, exacerbating morbidity and mortality (Bryant 47). However, the extent that government should reduce social inequities is controversial in a liberal democracy, which prioritizes economic freedom. That being said, social inequalities may lead to wealthier individuals gaining an advantage in policy making (Bryant 54; Rein 63), undermining the liberal democratic value of political equality. Moreover, the ideal of economic freedom is shrinking in today’s global economy, which exhibits massive enterprises stifling competition and creating economic instability (Foster 2). In light of these issues, the aim of this essay is to detail how unregulated capitalism detracts from a liberal democracy by undermining political equality and economic freedom.
Ideals of a Liberal Democracy
The values of freedom and equality, which are protected as rights, are central to a liberal democracy. In order to bestow these rights, all citizens are subject to the rule of law, and government power is delimited by the constitution (Plattner 122). Historically, freedom was viewed strictly as political liberty, but this has evolved into the right to live as one chooses, equipped with essential resources (Charmichael 41). Similarly, equality has broadened from the mere idea of equal citizenship rights to the idea that some government interference may be required to ensure the accessibility of rights. For example, all people have the right to legal counsel, but for those who cannot afford a lawyer, legal aid may be required. Though liberals agree that everyone should have equal access to rights, the extent that government should minimize social inequities is debatable (42). In general, liberal democrats prioritize political equality, entailing equal voting rights and representative government (Harder 75; Plattner 131-2), as well as economic freedom, which protects property rights and allows businesses to operate free of government (Kellogg 52; Plattner 128). As such, economic inequalities are typically viewed as a natural consequence of freedom. Nevertheless,...