No Free Lunch: Economics for a Fallen World: Third Edition, Revised
Chapter Six: Applications in Markets 128 kings and leaders in authority simply decide the rules and we live with them. Ultimately we have to ration scarce goods by some mechanism; as we discussed early in the book, the price system is only one way. We could also ration scarce goods (like vineyards) by “might makes right,” or by the politically powerful. Jezebel thought of a way to “appear” as if the rule of law were still in effect, and Ahab received his coveted vineyard. Nevertheless, there are unintended consequences of not limiting exchange to mutually beneficial trades. Under the L ORD ’s command (v. 19), Elijah told Ahab: “Thus says the L ORD , ‘In the place where the dogs licked up the blood of Naboth the dogs will lick up your blood, even yours.’” In this chapter we will examine how government sometimes limits voluntary exchange through price controls, and analyze some of the unintended consequences. One of the most applicable verses in the Bible to economics (and the passage above) is Galatians 6:7 : “Do not be deceived, God is not mocked; for whatever a man sows, this he will also reap.” If we ignore the teachings of economics, we will have worse economic results. And if we reject God, he will “give us over” to live with the consequences of our actions ( Romans 1:28) . In neither case will the outcome match the intent.