Blackwell Reference Online

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The dominant economic system in the world today is the capitalist economic system. An economic system, broadly defined, is a particular pattern of behavior, a certain ordering of relationships among people and the institutions they create to meet the material needs of their society. An economic system is capitalist if it provides the following answer to the question: “How are we to organize ourselves to create and distribute what we need in order to live?” The answer is that a free market determines what people should create and the rewards or benefits they should receive. The word “free” implies that there will not be social and political pressures constraining how a capitalist operates. A global free market, then, is a market that functions according to the basic principles of supply and demand.From the foregoing perspective, it is argued that a free-market setting offers the best chance for democratic reforms and economic development. However, in practice global capitalism actually undermines democratic reforms and sustainability, because in its working out it limits the state's ability to be democratically accountable. The situation is particularly critical in states that exist at the margins of the capitalist global system. Since such states have been rendered obsolete by economic globalism, can they really be expected to carry the burden of democratizing their respective polities?The ... log in or subscribe to read full text