“THE top 10% own three-quarters of global wealth, while the bottom half holds only 2%.” So states the World Inequality Report 2026. Can democracy survive when capitalism concentrates wealth so drastically?
The belief that democracy and capitalism are natural allies is as widespread as it is inaccurate. To see this, one has only to observe capitalist accumulation under authoritarian political arrangements. The UAE is just one such example. Why then does this belief persist?
Democracy and capitalism often journey together — until they don’t. To a point, they do support each other. This is why it is not easy to find democracies without capitalism. Think of a society, poor and authoritarian, that then undergoes a revolutionary change that makes it both democratic and capitalist. For a while, the two would go together. Democracy would bring freedom and political equality; capitalism would bring resources.
Even Marx acknowledged that capitalism creates ‘colossal productive forces’. The growing middle class would demand greater freedoms and consumption, thereby strengthening both democracy and capitalism. For some time, prosperity and empowerment would rise together.
But this harmonious co-existence would soon wear off. Democracy is about political equality. Capitalism, by design, needs economic inequality. The two would eventually collide. In time, the wealth generated by capitalism starts to pool in fewer and fewer pockets. Growth continues, distribution falters. Tensions begin to appear.
Democracy is about political equality. Capitalism, by design, needs economic inequality.
This concentration is not just financial. Being rich doesn’t just mean plush houses or private jets. It means connections and information, as the wealthy form exclusive social ties, venture together, share insights and tastes, thus increasing their collective purse. French sociologist Bourdieu has called this social capital, “aggregate of actual or potential resources” that bring tangible benefits. High-profile events such as the Ambani wedding illustrate how this transformation happens. But the process does not stop here.
Social capital soon becomes political capital, with the wealthy getting access to the political class, who make laws. The role of the corporate lobby and campaign funding is well documented. These are some of the ways in which wealth buys political influence. Elon Musk’s access to and authority in the White House was an example of the political power wealth can bring. Consequently, economic values of capitalism start to prevail over the political ideals of democracy, human rights and political equality, as the market dictates the state.
We have drifted far away from the attractive capitalist rhetoric of riches through hard work and entrepreneurship. Now, wealth generates wealth, creating inequalities not justifiable through merit. That inequality is endemic to capitalism and not just an irritating bug, is well shown by Thomas Piketty, who demonstrated that the return on capital (rent) grows faster than the return on labour (income). Proponents of capitalism may insist that inequality brings growth but such justifications ring hollow when wealth buys disproportionate political influence.
One would expect that, in a democracy, as people realise the asymmetry of wealth distribution they feel relatively poorer, and experience alienation in economic and political spheres, they would vote against such a system, demand reforms, regulatory constraints and a redirection. In theory, democracy should prevent capitalism from reaching its logical outcome of concentrating wealth among a small elite. Yet that concentration of wealth is exactly what has been happening. Why?
When people suffer, they seek an explanation. Here, the narratives people have to make sense of their condition become important. There is a leftist narrative, including democratic socialism, which explains the alienation through a critique of capitalism, giving an economic explanation. But there is very little space for such narratives in school curricula or on the mainstream media. Instead, two other narratives prevail as they are pushed through by the mostly corporate-owned media. It is not an accident that some of the most powerful media outlets today — both conventional and social — are owned by billionaires or corporations.
The liberal media supports capitalism, insisting on its necessity for democracy. It projects billionaires as self-made, implying anyone can succeed. In the process, the role of inheritance, connections, tax evasion, low wages and corporate welfare is pushed under the carpet. The poor are blamed for their condition, as if it has nothing to do with systemic biases, inequitable access to education and capital or with historical injustices. This narrative claims capitalism as a bastion of innovation but sidelines the fact that only those advancements that bring profit are allowed, not those that genuinely improve human life. This glamorised but distorted storyline leaves people stuck between conviction (that they can make it) and anxiety (that they cannot).
The right-wing — and increasingly even sections of liberal — media weaponise panic and resentment against migrants, selected racial and religious groups, and unconventional identities by whispering that these ‘unwashed’ have stolen the wealth of the suffering workers. In time, these narratives cleverly divert the anger and distress resulting from capitalistic alienation towards oneself, fuelling an epidemic of mental illness, or towards creating scapegoats — while sparing capitalism and its contradictions. Unsurprisingly, a recent survey in the US showed that only 52pc of the least financially secure thought democracy was the best form of government; those who need it the most trust it the least. This misdirected rage is visible in many countries today, particularly in the US, UK and India.
To conclude, democracy and capitalism may begin as partners but soon the relationship turns antagonistic. Capital, with its material resources, seeks to break any restraints on it. Those who want both democracy and capitalism must build bulwarks — a social contract that curbs wealth concentration and ensures public ownership of sectors, education and health in particular — crucial for equality of opportunities. A critical political education of citizens, young and old, is also needed so that they do not fall for destructive narratives and are not diverted from the real causes of malaise. If democracy is to endure, it must tame capitalism, not merely coexist with it.
The writer is dean, Institute for Educational Development, Aga Khan University.
Published in Dawn, January 23rd, 2026
