Government’s Role and the Journey with Capitalism

The debate over the role of government in western societies has been a product of our journey with free-market capitalism since the 18th century. Christians may dress the debate up in biblical language, but we need to pay attention to the peculiarly modern and capitalism-driven shape of our tired debates over government’s role.

Modern capitalism has been the great driver of economic, technological, and cultural development in the modern world. In fact, modern capitalism essentially defines the modern world.

But it became clear quite early in the career of industrial capitalism that it produced numerous losers as well as winners. Losers included workers (including women and children) abused by overlong hours and unsafe working conditions; mass urban workforces at the mercy of business owners and the business cycle; failed businesses and those who lost their jobs when they failed; communities harmed by environmental “externalities” of profit-hungry industries; villages and cities dominated by business monopolies; those who lacked the skills or the good health to work; and many more.

Many thoughtful observers attacked capitalism as early as the 18th century. Protests mounted in the 19th century, ranging from dreamy utopian experiments to the hard-eyed revolutionary plans of the Marxists. Marxism especially posed a mortal threat to capitalism and brought terror to those who benefited from its arrangements.

We know what happened. The 20th century became, in large part, the story of the battle between Marxism and capitalism, with a bit of Nazi fascism thrown in there to keep things suitably apocalyptic and bloody. Western societies generally rejected Marxism but did gradually grow the role of government to deal with all of the problems that capitalism itself produces.

Much of the modern role of government is indeed best understood as a response both to capitalism’s failures and its most radical critics. So government protects the environment because we know business on its own will fail to do so voluntarily. Government educates children (or requires that they be educated) and now protects children from being drawn prematurely into the workforce. Government (sometimes) regulates both the health and safety of workplaces and the activities of banks and investors, because we know that business on its own will not do so adequately. Government supports higher education because an educated citizenry makes a better and more productive workforce for capitalism. Government commerce and agriculture departments directly encourage economic activity and productivity. Government economic and monetary policies seek to prevent the boom and bust cycle of capitalism from being too disruptive to people and communities. Government programs for the poor, the sick, the disabled, and the aged seek to provide income support to those unable to participate (any longer) in the workforce.

All of this is on top of the baseline role of government in providing law and order services domestically and security services internationally, which most everyone understands to be part of what even a minimalist government needs to do.

Christians who hold a realistic understanding of sin, together with an informed understanding of the history of modern capitalism, must reject the claim that an unregulated capitalist business sector can be counted on both to pursue profit and to advance the common good. Reinhold Niebuhr is still relevant here, in his shrewd assessment of human selfishness, especially at the level of collectivities. He is also relevant in his analysis of our endless capacity for self-deception when our self-interest is at stake. That would include the self-deception involved when capitalism’s great winners seek to remake the social contract according to the way they see the world.

One final Niebuhrian note, however: concentrations of power are intrinsically dangerous wherever they appear. Thus unchecked capitalism is dangerous. But so is unchecked government. Unchecked owners are dangerous. But so are unchecked unions. Power corrupts. Great centers of power need to be checked by other great centers of power. I am among those who believe that western societies have been more damaged by unchecked capitalism than by the mix of capitalist power and government power that we now experience. But history gives us plenty of examples of the dangers of unchecked government as well.