Well first of all, we don't live in a democracy.
We live in a system called "representative government", which is specifically undemocratic. Democracy (aka direct-democracy) means that poeple get a say in all matters. You mention that we have power over policy, but we have virutally ZERO influence there. Without a herculean feet of organizational and awareness effort we have no mechanism through which to communicate our "demands" to the government. Except for one election every four years. Which is quite simply a fucking joke. When you look at it that way, it's laughable when people strut around bigging up our "democratic principles" because we don't have them.
No citizen gets to vote on--or even influence the contents of--any legislative proposals. The only people who can are lobbyists, and they can do that because they are very well funded...by rich corporations who see that funding as an investment, that has an expected return. Normal citizens don't have the time or money--and because the majority of people have to work to survive, time is money--or know-how to effectively lobby the government.
In fact there are so many barriers in the way of collective citizen action that you begin to wonder whether those barriers were erected by design. DeafPlayer has lots of good info on this. The system we live in only talks and acts like a democracy. There are so many examples of the government being terrified of citizens coming together--for example when there is a subway party, the police are mobilised! Police are people who have been furnished with a "monopoly on the legitimate use of violence", they cary semi-automatic handguns that are designed exclusively to put holes in peoples' bodies. Why are they called because a bunch of people are having fun on a subway car? Why is it so necessary to disrupt that activity?
That's one example, but it illustrates a telling reflex against the independent free assembly of individuals, which is supposed to be one of our freedom. Incidentally do you know what the diffrence between a freedom and a right is? Rights cannot be taken away, but freedoms are GRANTED and therefore CAN be revoked. They exist because the government allows it. The implicit message is clear.
I've seen several documentaries that give explicit proof that our "consumer culture" was a deliberate invention for the purpose of occupying the masses because of the terrible things that were associated with mob mentality, like revolutions and nazism. If people are concerned about what they're going to buy, what's in season, what can they afford, how can they afford more, then they will become isolated and incapable, socially, of coming together and forming a critical mass that--by definition--has the power to influence the government. This is every state's absolute worst nightmare. At the same time, the consumer construct allows for the creation of a corporate class that enriches itself on the illusion that we can have whatever we want. Credit card companies and banks are one example. Any economics class, no matter how conservative, will teach that paying workers a sallary is merely a measure taken to ensure that the money goes BACK to the corporation, and by so doing, keep them in business and producing. The cycle.
Actually, economists and historians do not debate that after WW2 a conscious decision was made to pay people WAY more money for the purpose of fostering the consumer 'revolution' People could become obsessed with having stuff, and companies could ensure that they would generate wealth for themselves, and the government could ensure that there would be no real backlash for the apocalyptic insanity of WW2, which was a human catastrophe that amounted to nothing more than genocide against every party.