No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter One: Introduction to Economics 15 In the economic arena, we can understand much about the micro world around us, what is likely to happen in a particular market if something changes (e.g., a price change). But to tease out the full implications to the broader economy is much more difficult. Further, the market is very dynamic, i.e., it is constantly changing based on different variables. Our tastes and preferences change, sometimes for the better, sometimes for the worse (by what standard!?). And there are people constantly coming up with new processes for producing and delivering current goods and innovations modifying existing products or creating new ones, which adds another level of complexity. What is the source of this innovation? How do we “plan” for it? Can we produce more innovation, and if so, how? The problem of our finitude must be coupled with our fallen nature to see the issue; in our prideful hubris we seek to leap the bounds of our finitude and control our circumstances. The psalmist says “I look to hills and the Lord is my help,” but we do just the opposite, thinking our help comes from our own effort, not trusting that God will meet our needs. We reach out ourselves for the forbidden fruit, thinking we can control our destiny. We think we have sufficient knowledge, if not perfect knowledge, to be able to guide our economy. There is no God to depend on; I look to the hills and say my help comes from my own effort. BIBLICAL ANTHROPOLOGY PRINCIPLE #4: WE ARE CORRUPTED BY THE FALL Finally, as fallen creatures we have the desire to get something for nothing. The biblical model suggests deferred gratification and hard work are the path to success; our fleshly nature wants things today and does not want to work for them. We will enslave others to get what we want, we will deceitfully market our products, we will use false weights and measures, and we will do many more wicked things to exploit others so that we may have them serve us without regard for the mutually beneficial part of exchange. Our flesh needs some constraint to prevent us from exploiting others. The extent of the Fall means that everyone is fallen; we’re not basically good people that have been corrupted by bad institutions. Rather bad institutions are the result of Fallen people who create them—they are the outworking of sin in humanity. Because of this, we have no hope in “better” leaders or in “better” systems. Indeed, when we centralize power this tends to only magnify the risks of the monstrosities we’ve seen in history. It is no coincidence that totalitarian dictatorship regimes have committed the most murders in history. As Lord Acton said, “Power corrupts and absolute power corrupts absolutely.” The Roman poet Juvenal said it similarly in his Satires when he asked, “ Quis custodiet ipsos custodes ,” or “who will guard the guards themselves?” Just as good governance has found that the decentralization of power and decision-making can constrain evil, so too many competitors tend to limit the exploitation that one party can do to others.