Michael Novak writes in The National Review, Democratic Capitalism 
The prospering of free societies depends on certain moral and cultural practices. Sept 24, 2013

Excerpt:

Meanwhile, two principles help to define the meaning of “democratic capitalism.”

(1) The first is a principle formulated by the great sociologist Peter Berger inThe Capitalist Revolution: Fifty Propositions about Prosperity, Equality, and Liberty (1986). Empirical observation clearly showed that capitalism is a necessary (but notsufficient) condition for the success of democracy. Berger recognized many examples of new capitalist economies that were beginning to raise up their poor, but that could not yet be called democracies. Chile under Pinochet was one such. The Philippines, Singapore, Spain, and several significant others on two or three different continents also became capitalist before becoming democratic. Nearly a dozen nations turned capitalist, especially India and China, to pull themselves out of the worst forms of poverty. But the polity of some of these was by no means democratic. The pattern seemed to be: Capitalism first, then after a time democracy.

(2) Further consideration yielded the following modifier: In the long run, democracy is a necessary condition for the success of capitalism. Two observations led to this modification. First, under dictatorships, economic decisions have often been reached without taking account of vital constituencies such as small businesses, sectors of manufacturing deeply affected by tariffs, and companies and technologies that depend on vital links to overseas partners. The economy from then on limped. Second, even successful capitalist nations such as Singapore have been plagued by problems of succession. There was no clear institutional path for securing legitimacy among the people, with its accompanying social stability. Among investors and future partners, institutional uncertainty often hurts nations badly.

HKO

Novak writes a very nice observation about the relationship of democracy and capitalism.  Culture includes certain moral virtues that are critical to the functioning of democratic capitalism.  The one virtue in the United States that has developed and is still relatively unique to us is a tolerance for failure.  We understand that capitalism is a competition of ideas and as such will inevitably face and digest failures. Our bankruptcy system is designed to clean bad investments quickly to make more room for success.  We almost embrace failure as a path to economic growth the way religion recognizes sin on the path to redemption.

To the extent that our government micromanages our private institutions, chooses winners and losers, promotes crony capitalism and interferes with the consistent rule of law they short circuit the ecology that is essential for economic growth.

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