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Canada as a Liberal Capitalist Democracy Essay

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Updated: Sep 10th, 2021

Liberal capitalist democracy is defined as a situation where the free market dominates the economy and means of production are privately owned i.e. a degree of economic freedom where industries owned by private individuals are intermingled with economies that are centrally planned.

The degree of freedom includes possession of means of production, for example, factories, stores, farms, industries, and many others. Freedom to buy items which can be used by individuals as well as for resale, for example, buying a car for use or for selling. Freedom to sell items, for example selling a pair of shoes to other people for them to wear or sell it to other people. It also includes the freedom to hire organizations that creates wealth, for example, hiring a consultancy company to offer advice on various issues in the production line.

It includes also the re-organization of the enterprises in order to make a profit, for instance, changing management of the enterprise or adding new departments in the organization. Communicating through newspapers, advertisements, making deals, creating business partners, free speech, and creating new markets are other degrees of freedom enjoyed in a liberal capitalist democracy. It also involves holding peaceful protests, marches, suing the government, making petitions, and making laws that may necessitate profit-making and laws that improve the working conditions of the workers.

In a liberal capitalist democracy, distribution, investment, production, income, and pricing of goods and services are determined by the forces of demand and not by the government or individuals. Groups or individuals act as “legal persons” to trade capital goods, land, money, and other economic items. Examples of liberal capitalist democracies include the United States of America, Canada, Australia, New Zealand, France, Belgium, Netherlands, and many other countries of the world.

According to my opinion, Canada is a Liberal capitalist democracy because it has adopted a shift away from regulatory criteria towards free-market criteria in its policies. Out of economic necessity, the government provides technical infrastructure and regulations in the economy ensuring that carrying out business activities in that country is simple thus creating more investment opportunities. The country was ranked 10 out of 161 countries in terms of index of economic freedom,14 out of 111 countries in terms of economic performance and this was attributed to the technological advancement brought by the private owners of businesses.

The country maintains a diversified economy and relies mostly on its abundant resources and trade. Its multicultural and bilingual nature brings about specialization in different fields of production with different people concentrating in areas where they suit best due to economic freedom. Due to this, in October 2007 the unemployment level went down to 5.9% which was the lowest in 33 years. This was brought about by the number of enterprises that were opened up by entrepreneurs with the help of the government. The manufacturing centers in Ontario and Quebec owned by private developers created the highest opportunities for unemployed people.

The agricultural sector followed in jobs creation where agricultural produce like canola, wheat, and other grains was produced. The government provided the necessary infrastructure and the entrepreneurs carried out the production process. Canada has therefore been ranked as one of the world’s most rich country and this has been attributed to the free market economic system. The per capita income has increased in Canada due to the booming economy which has made Canada a member of Group Eight(G8), a member of the Organization for Economic Cooperation and Development(OECD).

It should be noted that the state has played a bigger role in the creation of favorable monetary and fiscal policies for economic growth. This applies to any sovereign state in the world. Monetary policy is the measure adopted to increase or decrease the supply of money in circulation in any economy.

The objectives of this policy include bringing about price stability in the economy, increasing capital accumulation, and maintaining stability in the exchange rates all aimed at increasing the rate of economic growth. The effects of this policy directly affect the operations of the entrepreneurs and the government ensures that the economy is favorable for them to carry out their business activities by regulating the prices of goods and services, and also regulating the rate at which the Canadian dollar is exchanged with other currencies.

Fiscal policy is another tool used by the government in the economy and directly affects the operations of entrepreneurs. The government changes its expenditure and revenue programs through taxation, for example, during deflation the government lowers the taxes from the entrepreneurs, and during inflation, the government raises its tax rate in order to reduce the amount of money in circulation. The policy is aimed at achieving desirable consumption levels for the goods and services produced by the entrepreneurs enabling them to make reasonable profits.

The production risks under private ownership have also been underwritten, and the state has played a major role in its land and migration policies, absorbing costs of production through sanitation process, employment insurance, Medicare, educational facilities, building the infrastructure necessary for economic development, for instance, railway, airports, utilities, and canals when these projects are costly for private capital. The massive contribution that the government and the private owners have towards the Canadian economy according to me, has brought about full liberal capitalist Democracy in Canada.

Freedom of speech, association, press, and assembly are also exercised in Canada. The regional fractions of the capitalist class have been able to use provincial state administrations to air their grievances and represent their interest to the federal government. Cultural diversity and uneven development in various regions in Canada are also major factors that have made the government get involved in the market. The government has also ensured that there are good roads and many other transportation services, library and information services, quality education for schools to produce a quality workforce, hospitals to provide health services to all the people, banks, and many other financial services which make financial transactions simple and fast, mail, telephone, and other communication services.

The state has also ensured that there is enough energy such as electricity, gas, and oil which are the basic necessities for any industrial activity. Water provision for agriculture, drinking, and waste disposal have also been major areas where the government has been involved. The state does also regulates waste disposal to ensure that toxins are not disposed of inland, air, and water in order to minimize the rate of environmental pollution. This has been done to create an enabling environment for the entrepreneurs.

I can assert that there are no other better ideological models than the Liberal capitalist democracy because all other ideological models, for example, conservative, and radical ideological models have been used by many countries of the world and dropped due to their loopholes. The conservative model, which was used by Japan and Sweden proved unworthy in the managing recession of the economy. It was also in use in Germany but after the second world war, it was done away with due to its inferiority as compared to the capitalist ideological model.

The idea behind this ideology was that women and older people were not supposed to enter or re-enter the labor force thus underrating the experience and contribution that this group of people had. Women in the labor force were given extended maternity leave because they were considered inferior to men in their workplaces and therefore their contribution was not taken to be of any importance. The radical ideological model was used by the dictators who would impose policies without consultation.

There was minimal or no participation at all from other groups in the economy. The result was either low growth or collapse of economies where a few people amassed great wealth and many people were left in abject poverty. This ideological model was in use in Germany and exercised by Adolf Hitler during his rule and also in Yugoslavia. The radical ideology model caused loss of lives because anyone who dared to oppose any policy set by the dictators was met with a harsh reaction.

The liberal capitalist model remains the only model adopted by many countries today due to its participatory nature where all groups in the economy are given equal freedom to carry out their obligations without fear of intimidation. This, of course, integrates the contribution of different talents in the economy the result is robust economic growth and most countries have adopted this ideology the result being increased economic performance.


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