Reinhold Niebuhr’s Quest for Balance in the Public Oversight of Market Economies

Three basic themes played indispensable roles in Reinhold Niebuhr’s engagements with economic issues: (1) the foundational importance of a theological anthropology for his critical assessment of complex social, economic, and political issues; (2) his focus on two clashing theories of economic order: Adam’s Smith’s doctrine of laissez-faire capitalism and Karl Marx’s revolutionary vision for the collective ownership of property within a centralized state system; and (3) his endorsement of a realistic yet viable alternative to these two classic theories, one that involved pragmatic and incremental steps toward fostering economic justice through the public regulation and oversight of a free-market economy. These pragmatic measures included allocating government resources for vitally important public goods and services at federal, state, and local levels. Though Niebuhr was initially drawn to some form of democratic socialism, he embraced this incremental strategy within the context of President Franklin Delano Roosevelt’s implementation of his New Deal agenda. My analysis of Niebuhr’s contributions concludes with attention to new challenges confronting contemporary quests for economic justice in a post–New Deal era, one marked by an expanding global economy and substantial technical advances in the production and delivery of valued goods and services.

Theological Foundations for Critical Social Analysis

What is most distinctive about Reinhold Niebuhr’s critical engagements with social issues is his reliance on a theological anthropology to inform his examination of complex social processes. In this regard his Gifford Lectures on The Nature and Destiny of Man are foundational for his scholarly contributions. Of central importance is his emphasis on the dialectic between our intrinsic limitations as finite creatures and our radical freedom as creatures made in the image of God (Niebuhr 1941, 251–60). Niebuhr contends that our struggles to cope with this dialectic render sinful actions virtually inevitable, though by no means necessary—an insightful reconstruction of the doctrine of original sin. On the one hand, our finite limits may dispose us simply to accommodate existing social realities, no matter how unjust or immoral they may be, because we see no possibilities for achieving meaningful changes. On the other hand, our capacities as free agents may motivate us to naively invest our energies in efforts to reconstruct existing social arrangements in ways that have no realistic chances for success. Even more important is the fact that people in positions of power and influence are tempted to use their freedom to advance their own interests, largely disregarding the needs and priorities of fellow human beings in more subordinate or marginal positions. Given Niebuhr’s focus on social issues, it is understandable that he portrays pride and abuses of power as the primary manifestations of human sinfulness. Such abuses, he contends, cannot be effectively constrained without the generation of countermovements that are capable of resisting oppressive forms of social, economic, and political power. Over the course of his extended career, Niebuhr engaged these complexities with a pragmatic vision of political realism. The goal was to devise strategies that could potentially contribute to higher levels of social justice, even in a flawed and imperfect world.¹

Niebuhr devoted considerable attention to the ways in which historical processes exemplify the complex interplay of human finitude and freedom. History follows no necessary order, he contends, precisely because historical developments involve multiple levels of causation, including innovative initiatives by free human agents. While these developments set conditions that both shape and constrain future possibilities for human action, they do not finally determine what we can or should do as free agents. Various branches of the human sciences, including psychology, sociology, cultural anthropology, political science, and economics, can illumine some of the ways in which existing social conditions both constrain and facilitate concrete human actions and practices. Yet these studies cannot predict or explain what human beings will actually do because their methods of inquiry do not take into account the full nature and scope of human freedom. Niebuhr also maintains that studies in the human sciences frequently display an ideological bias, one that reflects prevailing interests and values in...