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Beyond capitalism vs. socialism

Scott Anderson argues that Christianity offers a way to think about markets, government and economic justice beyond the tired binary of capitalism and socialism.

Wide Angle View of the US capitol during Day time with Blue Skies and tourists

Photo by PorqueNoStudios

Nearly 50 years after I first encountered Michael Harrington’s book Socialism, I have come to believe that “socialism” is one of the least useful words in American political debate. It obscures more than it explains. The important question is not whether Americans should embrace that label, but whether we can move beyond labels to discuss the democratic and moral values already embedded in our public life.

I first read Harrington in college during the mid-1970s while preparing for ministry as a Presbyterian pastor. His work mattered to me because it joined two questions I was already asking: What does justice require of a democratic society, and how should Christian faith shape public responsibility?

What does justice require of a democratic society, and how should Christian faith shape public responsibility?

Harrington argued that genuine socialism must be rooted in democracy, civil liberties and political pluralism. He distinguished that vision sharply from the authoritarian regimes of the Soviet Union and Eastern Europe, which he regarded as betrayals of socialist ideals rather than authentic expressions of them.

Democratic socialism and Christian faith are not the same. However, I was struck by how Harrington’s concern for democracy and the vulnerable overlapped with central themes in Christian social ethics: the dignity of every person, the communal nature of justice and a preferential concern for the poor.

Michael Harrington, democratic socialism and Christian ethics

Harrington himself was deeply influenced by Christian ethics. As a young man, he joined Dorothy Day’s Catholic Worker Movement, living and working among the poor at its House of Hospitality in New York. Harrington’s biographer Maurice Isserman writes that Day had a “profound influence” on him. Although Harrington later left the Catholic Church, that encounter helped shape the moral concerns that informed his democratic socialism.

Over time, I became less interested in organizations claiming Harrington’s legacy, and I no longer identify as a democratic socialist. Yet the question Harrington left me with has only grown sharper: When markets generate extraordinary prosperity alongside widening inequality, what obligations does government have?

When markets generate extraordinary prosperity alongside widening inequality, what obligations does government have?

According to a Pew study released in 2025, growing disparities in wealth and opportunity have coincided with declining trust. Americans broadly see the U.S. economic system as “unfair and favoring powerful special interests,” and Pew draws a correlation between this belief and the fact that only about one-third say most people can be trusted.

Romanticizing government is not the answer. Bureaucracies can become inefficient, public programs can produce unintended consequences, deficits matter and markets often allocate resources more effectively than governments. Those cautions deserve serious consideration. But they do not erase government’s responsibility to address structural injustices that private charity and markets alone cannot remedy.

Reinhold Niebuhr, John Calvin and structural injustice

Reinhold Niebuhr, one of the most influential Protestant theologians of the 20th century, believed that structural injustice required structural remedies. He famously wrote in The Children of Light and the Children of Darkness, “Man’s capacity for justice makes democracy possible; but man’s inclination to injustice makes democracy necessary.” In this view, democracy is necessary because human beings are sinful, and government is necessary because love alone is insufficient in public life.

Niebuhr echoes an important insight from our Presbyterian forebear John Calvin. Both would insist that governments are imperfect – but so are markets, corporations and churches – because human beings are imperfect. The practical question is not whether government or markets are pure enough to trust. It is which imperfect institutions, subject to democratic accountability, can best restrain injustice while preserving liberty and advancing the common good.

The American political tradition has long rested on a mixed economy. We have never assumed that markets alone could achieve every public good. Social Security and Medicare reflect a durable national consensus that some risks are better shared than borne alone and that protecting human dignity is a legitimate responsibility of democratic government.

The debate, therefore, is not whether our faith has something to say about economic justice, but how those convictions should inform the responsibilities of government in a democratic society.

These convictions overlap with democratic socialist ethics, Catholic social teaching and our Presbyterian tradition, which has long insisted that economic justice is a matter of Christian responsibility. For instance, one of our historical statements of faith, the Confession of 1967, declares that “enslaving poverty in a world of abundance is an intolerable violation of God’s good creation” and calls Christians to address injustice in the economic order.

The debate, therefore, is not whether our faith has something to say about economic justice, but how those convictions should inform the responsibilities of government in a democratic society.

Medicare and the fear of “socialism”

During the Medicare debate of the early 1960s, then-actor Ronald Reagan became the public voice of an American Medical Association campaign against the proposal. He warned that health insurance for older Americans would lead to “socialized medicine” and eventually socialism itself. He suggested that Americans might someday tell their grandchildren what it had once been like “when men were free.”

History proved that prediction wrong. Sixty years later, America still has private hospitals, medical practices, businesses and capital markets, while Medicare has become an established public institution. Even during Reagan’s presidency, he never proposed abolishing it. Medicare did not replace capitalism; it corrected one of capitalism’s shortcomings.

In 2011, Warren Buffett publicly pointed out that he paid a lower effective federal tax rate than his secretary — not because he had used loopholes, but because investment income is taxed differently from wages. His point was not that capitalism had failed. It was that even a successful capitalist system must be measured against a public standard of fairness. The question is whether those who benefit most from that system should contribute proportionately to the common good.

Beyond capitalism vs. socialism

Markets are indispensable, but they are not self-sufficient. Government is necessary, but it is fallible. A healthy democracy depends upon the proper relationship between the two.

A more faithful democratic conversation would ask not which ideological label can defeat the other, but which policies best protect freedom, restrain injustice and serve the common good.

If our public debate began there, we might recover greater clarity, democratic humility and moral seriousness. Theologically, that requires remembering both the dignity of every person and the persistence of human sin. Politically, it requires resisting utopian promises from the left and market absolutism from the right. A more faithful democratic conversation would ask not which ideological label can defeat the other, but which policies best protect freedom, restrain injustice and serve the common good.

The question is not whether America must choose between capitalism and socialism. It is whether our democracy can be just enough to preserve freedom, restrain injustice and serve the common good.

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