In theory, capitalism is in many ways the friend of democracy, but in practice, capitalism as we know it can restrict democracy too. I will begin by defining both concepts in their pure theoretical form, to explore how capitalism and democracy have mutual interests. Firstly, the competition of efficient capitalist markets incentivises innovation and growth, which raises the state's revenue and allows a democratic state in particular to meet more demands of the electorate. Secondly, pure capitalism creates a middle class who tend to seek a number of social and political consequences conducive to good democracy: education, the rule of law and political participation. Thirdly, the libertarianism of capitalism was in many places the very motivation for democratization in the first place, as I shall explain with regards to the French revolution and the Arab Spring. However, whilst these relationships hold in theory, actually-existing capitalism is much more unequal than perfect competition theory. This inequality allows a minority to lobby even a democratic government with much greater influence than the majority. The inequality of opportunity and of outcome goes against the equality necessary for democracy with universal suffrage. This minority's preference for small government clashes with the democratic demand for government intervention, which I shall explain in the cases of pollution and the welfare state. The emphasis on libertarianism can also be questioned with respect to a more positive account of liberty. So whilst capitalism is the friend of democracy in some ways in theory, in practice it can be the foe of democracy in other ways. Let me begin by defining terms. Capitalism is "A system of economic organisation based on market competition, under which the means of production, distribution and exchange are privately owned and directed by individuals or corporations . Democracy is "A set of arrangements that give the great majority of the people of the country the ability from time to time to choose in conditions of freedom and political equality who their rulers will be . In their pure form as defined here, there are many aspects through which capitalism can be the "friend  of democracy. The first of these is that insofar as the state needs to raise revenue, capitalism is one of the fastest and most innovative modes of production to achieve economic growth, and hence taxation revenue for government. Capitalists profit more from factors of production than previous modes of production, because of the competitive nature of the market always incentivizing innovation. An example of this is pharmaceutical companies who invest in research and development. They compete against each other in order to find the next cure, with the incentive for exclusive profit from its investment. Similar speeds of progress are seen in the technological sector, where again the chance to create a new product and capture the market incentivizes huge investment. This is good for democracy because this provides the state with higher taxation revenue to then benefit the welfare of everyone else. The alternatives of government-controlled production or feudal aristocracy are not as efficient because they become complacent, it may take longer to produce goods and there is no incentive for research and development. All states prefer larger revenue, but democratic states in particular benefit most from large revenues to fund the demands of the electorate, who can then benefit from higher standards of living. Democratic states must meet common demands of the people like education, defence and healthcare more than previous political structures in which those in power were not accountable to the majority of the population. Keeping the electorate happy also reduces political and social conflict. The mutuality of aims shows that capitalism is favourable to democracy, because letting capitalism flourish helps government indirectly, in raising the tax receipt and thus expenditure on citizens and its positive spill over effects. Spill over effects such as self worth and happiness are not easy to measure economically, but are always expressed at democratic elections. Capitalism is also favorable to democracy due to its social and political consequences. Over time, capitalism creates a "large middling stratum of property owners who tend then to seek for education, autonomy, personal freedom, property rights, the rule of law and participation in government. Let me explain each of these effects in turn, and how they are conducive to good democracy. Education is intrinsically desirable not only in terms of teaching us skills, which allow us to get well paid jobs, but also in nurturing our personal development. Education is a way of achieving equality of opportunity because if everyone learns the same skills from a universal level of education, they face the same opportunity to find a good job to achieve economic gains (wages, rent, inter