page_title: Democratic capitalism
section_title: United States
hierarchical_section_title: Democratic capitalism / History / Late 20th century / United States
caption_attribution_description: English: Official Portrait of President Ronald Reagan Català: Retrat oficial del president dels Estats Units Ronald Reagan Deutsch: Offizielles Porträt des US-amerikanischen Präsidenten Ronald Reagan Italiano: Ritratto ufficiale del presidente degli Stati Uniti d'America Ronald Reagan Čeština: Oficiální portrét amerického prezidenta Ronalda Reagana Русский: Официальный фотопортрет Президента США Рональда Рейгана
context_page_description: Democratic capitalism, also referred to as market democracy, is a political and economic system that combines capitalism and a strong welfare state curbing the excesses of individual freedom. It integrates resource allocation by marginal productivity, with policies of resource allocation by social entitlement. The policies which characterise the system are enacted by democratic governments.
  Democratic capitalism was implemented widely in the 20th century, particularly in Europe and the Western world after the Second World War. The coexistence of capitalism and democracy, particularly in Europe, was supported by the creation of the modern welfare state in the post-war period. The implementation of democratic capitalism typically involves the enactment of policies expanding the welfare state, strengthening the collective bargaining rights of employees, or strengthening competition laws. These policies are enacted in a capitalist economy characterised by the right to private ownership of productive property.
  Catholic social teaching offers support for a communitarian form of democratic capitalism with an emphasis on the preservation of human dignity.
context_section_description: After taking office as president in 1981, Ronald Reagan advocated for a reduced role of government, while responding to voters’ skepticism of liberal capitalism by maintaining strong public sector spending. Many voters doubted the ability of free market capitalism to provide consistent peace, security and opportunity, and sought improved living standards, aged care, and educational opportunities for youth. The Reagan administration maintained previous levels of government expenditure on Social Security and Medicare as a proportion of gross domestic product (GDP). Total government expenditure levels as a percentage of GDP also remained stable under the Reagan administration.
caption: Ronald Reagan, 40th president of the United States.
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