How is democracy related to capitalism?
An absolute democracy, which means unlimited majority rule, is incompatible with capitalism and freedom. This is so because capitalism rests on the principle of individual rights. In an absolute democracy, rights would really have no legitimate meaning because they could always be voted away in the next election. Individual rights must be consistently upheld if capitalism is to be achieved, and if the majority may do whatever it wants regardless of the rights of the minority, capitalism cannot exist, not even in principle. When most people think of “democracy” they usually mean a constitutionally limited democracy. The function of a limited democracy is to decide who held political power and how that power is specifically exercised (such as how many policemen or judges are needed), but what that power is should be strictly defined and limited in the constitution. (This is basically the original American system.) In a proper capitalist nation, a constitution based upon individual rights
