The relationship between capitalism and democracy has been an extensively studied and “essentially contested” one. We now know that all “real-existing” democratic polities (REDs) also have “real-existing” capitalist economies (RECs),1 but that not all capitalist economies have democratic polities.2 From this we can infer that some variety of capitalism (VoC) may be necessary for some type of democracy (ToD), but not sufficient. Inversely, we can infer that having a democratic political regime is neither a necessary nor a sufficient condition for the survival or success of a capitalist economy.3 Capitalism would seem, therefore, to be logically (and probably also temporally) prior to democracy.4 Its initial historical agent, the bourgeoisie, played a central role in the transition from autocracy (at least, in Europe) and its subsequent side-product, the industrial proletariat, was a key protagonist in expanding further its inclusiveness and scope. On the other hand, the third wave of democratization, especially in the post-communist countries, exhibited an alternative causal path. Democratic institutions are chosen by design prior, or simultaneously, with the transition from a socialist planned to a capitalist market economy. In other words, the usual assumption is that the VoC determines the ToD – except in Central Eastern Europe and (some parts of ) the former Soviet Union where this pattern was inverted. But this tells us little about the relation that may develop historically (and, especially, exist contemporarily) between different VoCs and different ToDs. We have a general warrant for assuming that they are likely to be related – if only on the grounds that if capitalism is related to democracy, then subtypes of both are also likely to be related to each other, and that the VoC is probably going to be the causal agent – at least, initially. For example, Boix (2003) subsumes capitalism and democracy under the broader notion of asset distribution. “Real-existing” democratization – that is formal equalization of power resources across individuals and social groups – depends on a relatively equal distribution of economic assets, a high degree of capital mobility and an effective distribution of power that limits the ability to repress or outmaneuver opponents. Lasting democratic regimes can thrive in countries where either economic equality or capital mobility are high or where circumstances limit the concentration of the coercive capacity of elites. However convincing this argument may seem, it is

too generic to predict the outcome of the continuous interaction between various VoCs and ToDs. If this rational-logical assertion were not enough, we also have the “practical” essays in The Federalist Papers written by Alexander Hamilton at a particularly crucial early stage in the choice of regime-level institutions for the United States that clearly argue in favor of such a connection. Unless the United States adopted a set of “reasonably centralized” and “calculatedly limited” institutions of a “republican” form of government democracy, he argued, it will not be capable of sustaining and, much less, furthering its capitalist development. We do not know the counter-factual answer to what would have happened had the United States retained its “confederal” set of more dispersed and directly democratic institutions, but we certainly can testify to the subsequent emergence of a vigorous liberal market VoC.5