Why Faith and Free Markets Need Each Other

Article excerpt

An important new book has recently been published which addresses the question of global poverty, but does so by provoking the reader to also consider our own nation and demand that we better understand ourselves and the wellsprings of our own success.

Two evangelical Christians have teamed up, one an economist and one a theology professor, to write "Poverty of Nations: A Sustainable Solution."

The economist is Barry Asmus, senior economist at the National Center for Policy Analysis. The professor is Wayne Grudem, research professor of theology and biblical studies at Phoenix Seminary.

There is no question more perplexing than "Why are some nations poor and some rich?"

What accounts for the astounding success of our nation, at the same time the world's most prosperous but also, at just 227 years old, one of the world's youngest?

The mystery of the nature and sources of wealth and poverty is far from new, and Asmus and Gruden survey the vast literature dealing with this most basic question.

They also review the long experience of attempts by governments to design policies to alleviate and eradicate poverty in their own country and in others.

In the end, the picture that emerges appears quite clear. Over thousands of years of human experience, going through economic arrangements such as tribalism, slavery, feudalism, mercantilism, socialism and communism, and welfare-statism, no arrangement can compare in creating new value, production of goods and services, and prosperity, like the free market.

However, despite the success of free-market economies, they are regularly subject to political challenge because of the ongoing human desire to understand the "ghost in the machine," so to speak, and control it and its outcomes.

How does it work? How does this prosperity happen when no one seems to be in charge, and when there seems to be no place to turn to see who designed and is running it all?

The authors help the lay reader understand key aspects of free markets that make them work so well - ownership and private property, the vital information conveyed by prices in the marketplace and profits and losses of business, specialization and competition, and creativity and entrepreneurship. …