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I would argue that it is the priest Father Barry, played by Karl Malden, who is the most powerful character in On the Waterfront. Father Barry is the protagonist. He is responsible for introducing change in the status quo. Most of the workers and their families are Catholics, so the priest has a great deal of influence over them. He has the Catholic Church behind him, which more than counterbalances the power of the hoods who run the union. When his brother is killed, Terry is only interested in taking personal revenge; but Father Barry sees the big picture and persuades Terry to testify against Johnny Friendly and his goons. Terry's testimony is extremely effective because he is an insider, and his brother was a top insider. The mobsters are temporarily forced to stop using violence and terror. Johnny Friendly tells his henchmen, "We're a law-abiding union." Terry is only able to stand up to the mobsters because they are under close scrutiny and unable to kill him. All of this is due to Father Barry's coming into the waterfront world from the outside, learning what is going on there, and upsetting the status quo. Terry is just a little man caught between big forces--the government, the mobsters, the Church. He enjoys a small temporary victory, but he will remain nothing but a working stiff for the rest of his life.
Terry Malloy is the most powerful figure in On the Waterfront. Faced with the challenge of forgiving his brother and himself while also realizing that a different life exists for him but which is agonizingly difficult to attain (symbolized by Edie), Terry finds a strength to stand up to the forces that have knocked him down and claim a life of self-respect.
The most powerful moment of the film comes in the film’s climax, when Terry literally stands up to Johnny Friendly. Terry has come to avenge the death of his brother, standing up to Friendly despite the many thugs and guns that surround him. Terry’s face-off with Friendly is symbolic of the working-man’s plight, labor versus management.
Jobs are scarce and money even more hard to find on the waterfront and it is believed that everyone must play along, obeying the rules given by those in power, the bosses and Johnny Friendly. In the beginning, Terry does go along and does as he is told. But as the story moves along, Terry realizes how the system has ruined his life, and continues to do so.
In the end, he becomes a fighter again, reclaiming the pride and sense of self that had been taken from him and he does this by taking a moral stand.
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