Democracy
Democracy is that governance system in which power is derived from citizen either by referendum or by means of elected representatives. Democracy has not universally accepted definition as UK practices one type of democracy and USA and India practice another type of democracy. But in all of the above democracy equality and freedom are regarded as commonalities of democracy. Famous American president Abraham Lincoln has said that democracy is the rule of people, by the people and for the people. Thus, by this definition we may conclude that in democracy every citizen has equal value and equal access to resources. Like other countries, Nepal has been also struggling for democracy since 1950 AD. But due to problems in Nepalese leaders and King, it is still juvenile. But it is always clear that democracy will be stable only when we talk about freedom and act accordingly from grass root level. But in case of Nepal, the reform and democratization has always been the slogan of national leaders. Democracy is still in danger in Nepal where in one hand there is threat of communist extremist and in another hand there is threat of extreme reactionists force. This condition was originated after Maoists integration in peace process. Thus, the democracy in Nepal will be of bright future if the parties calling themselves democratic practice their works, forming the poor people oriented policy.
Market economy
Market economy is that economy based on the power of division of labor. Prices of goods are determined in a free price system set by: supply and demand. Market economy is also different from planned economy in which the market is captured by government in fixed price system basis. Similarly, market economy is also different from the mixed economy in which the government may influence the market partly. In today's condition, there is no existence of market economy as the government influences the market policy to some extent directly or indirectly in price fixing of goods. But economist Ludwig von Mises has said that economy is still market economy if the government intervenes in the fixing of price of goods. Market economy is different from the capitalism in the sense capitalism assumes people as labor for the benefit of certain group of people who has capital. This is more the argument of what Karl Marx would say about capitalism – for more information on the different types of capitalism, check out this video that summarizes the four different types of capitalism as identified by Robert Litan: oligarchic capitalism (which is what you were referring to, I believe), big-firm capitalism, state-guided capitalism, and entrepreneurial capitalism. You can find the link here: http://www.youtube.com/watch?v=gOxM00nWgc0 )That group of people behaves other people having low capital as machine for producing their goods of interest.
Theory of market economy
Market economy is the free-market economy. The political freedom is only possible when there is free market. Thus, free-market economy is helpful for civil and political freedom and institutional reform as well. Economist Friedman has stated that economic freedom is simply a pre-requisite for political freedom. By enabling people to co-operate with one another without coercion it reduces the area over which political power is exercised. Interesting
Inter-relationship between market economy and democracy
In democracy market economy, exists partly but market economy without democracy is s bind. It is blind in the sense that people is free to do everything except sharing the l powers. That means there is sharing of wealth in market economy but not sharing of powers. Free market leads to sharing of power but power may not lead to free market unless the leaders are not unaware of its advantages. The best example of countries where there is market economy but not democracy is gulf countries. Gulf countries like Qatar, Saudi Arabia, Kuwait etc. where people are running their own enterprises but in the decision making process there is only presence of King family. General people conduct their enterprise but they are not able to speak against their king i.e. no freedom of talk.
Although they are conducting their own enterprise but in front of king family run enterprise, they are unable to get benefits of stock share. This is an example of power domination due to which they are not able to get benefited from the business. The rulers in these country has fear that the economic growth in there nations will be reduced if the political power is given to the people. So the parties are not in existence, freedom in opinion is not available. In other words, there is not democracy. Thus, without market economy, democracy is lamb and without democracy, market economy is under dictatorship.
Conclusion
Freedom i.e. democracy brings freedom in economy and freedom in economy brings civil freedom. In another words market economy and democracy are complementary to each other.
References:
1) http://en.wikipedia.org/wiki/Democracy
2) http://en.wikipedia.org/wiki/Market_economy
3) http://www.america.gov/st/democracyhr-english/2008/June/20080611144228ebyessedo2.224368e-02.html
Thank you for your essay – nice job and keep up the good work.
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