Reinhold Niebuhr and the Economic Order

In his 1933 essay “After Capitalism—What?” Reinhold Niebuhr made two strident yet questionable claims. Not only did he herald the impending death of capitalism, he greeted it with approbation. Capitalism is dying, he wrote,

because it is a contracting economy which is unable to support the necessities of an industrial system that requires mass production for its maintenance, and because it disturbs the relations of an international economic system with the anarchy of nationalistic politics.

“It ought to die,” he went on to say, “because it is unable to make the wealth created by modern technology available to all who participate in the productive process on terms of justice” (1933).

The claim that capitalism is dying is dubious given that this global economic system reigned even before the fall of the Soviet Union, and has only accelerated further since communism collapsed as a tenable global economic model. For all of the changes, challenges, and limitations to capitalism today (which go well beyond the industrial system that Niebuhr associated with it), capitalism has been as successful as it has been relentless both in its pursuit of new markets and its expansion of existing ones. It offers an increasingly interconnected system in which, far from disturbing international relations, participation in global trade—and adherence to the cooperative arrangements and global institutions that sustain it—is the most immediate symbol of a nation’s power, legitimacy, and standing in the comity of nations; and in which isolationism and economic sanctions are the marks of an outlier’s exclusion, punishment, or presumed eventual demise. Of course, today’s engines and engineers of various forms of capitalism are not, as Niebuhr thought in his time, distinctively liberal, democratic, and individualistic. Even the economic powerhouse China, currently the chief holder of U.S. debt, has embraced capitalistic elements not only to increase its own economic and political might internationally but also to preserve domestically the repressive and corrupting elements of its communist political system.

Much as the Great Depression fueled Niebuhr’s pessimism when predicting capitalism’s ruin, the Great Recession that began in 2008—including the excesses that gave rise to it and the inequalities made manifest by it—affords a new occasion to inquire into what ails capitalism in our day. Niebuhr refrained from predicting when death would come or what would deliver capitalism’s mortal blow—war, revolution, or perhaps “the collapse of the credit structure” (as occurred in the Great Depression and Great Recession alike). But he certainly thought the debilitating economic crisis of his day not only obliged him to spell out the moral lapses of capitalism underwriting his “conviction that it ought to die” but also to prepare for whatever new economic system would follow (Niebuhr 1933). At the time, Niebuhr hoped for the emergence of a strong socialist movement modeled on the Labor Party in Great Britain.

Capitalism, Niebuhr averred, cannot cure itself of its moral failings: “There is nothing in history to support the thesis that a dominant class ever yields its position or privileges in society because its rule has been convicted of ineptness or injustices” (1933). Nor did he hold out hope that capitalism could be reformed with religious idealism, by liberalism’s platitudinous beliefs about inevitable progress, or through grandiose ideals about increasing “social intelligence” through education. This was the stuff of naive moralism—a target at which Niebuhr took frequent aim. Rather, he believed that “new societies are born out of social struggle,” brought on by clashing economic interests—an idea that still resonates when reflecting upon the Tea Party and Occupy Wall Street movements in the United States or the popular demonstrations against austerity measures that raged in the streets of European capitals (Niebuhr 1933).

Nevertheless, alternative new economic systems have not been born out of the socio-economic struggles of Niebuhr’s day or our own—none at least that compare to the resilience or longevity of capitalism. Within the United States, the forces animating the Tea Party and Occupy movements have dispersed, disbanded, or integrated with more traditional forms of political activism, legislative activity...