How are democracy and capitalism related?

The relationship between democracy and capitalism is nuanced and complex, and the correct answer highlights a critical aspect of this dynamic. Capitalism is an economic system characterized by private ownership of the means of production and the pursuit of profit, while democracy is a political system that emphasizes participation, equality, and the protection of individual rights.

Capitalism can promote individual freedoms by allowing people to engage in economic activities of their choosing, encouraging innovation and competition. However, it also has the potential to create significant economic inequalities. Wealth can become concentrated in the hands of a few, leading to disparities that affect an individual's power and influence within both the economy and the political sphere. This duality signifies that while capitalism can enhance personal freedoms, it can simultaneously exacerbate social divides and create obstacles to equal participation in democracy.

Recognizing this relationship is crucial for understanding contemporary debates about the implications of capitalist practices on democratic values. This interplay becomes particularly relevant in discussions about how policy decisions can either mitigate or intensify inequalities, influencing the democratic process itself. Thus, option C effectively encapsulates this dual role of capitalism in relation to democracy, emphasizing that while it can foster freedom, it also poses challenges regarding equality.