Economics 101

Do Free Markets Promote Greed?

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In the discussion of markets and morality, objections to free markets often center around values and character. Art Lindsley has written about the need for Christians of character to be involved in culture, and that need is just as great within markets. Why?

Critics of free enterprise often argue that it promotes the worst kind of human behavior, and it must be rejected if moral human action is to prevail. They argue that free enterprise promotes jealousy, envy, and greed.

In their opinion, life on this planet would be better served if we substituted another means of control over the production and distribution of economic goods. The assumption is that the collectivization of economic life would promote the highest level of virtuous living amongst one another.

Is this assumption correct?

First, it must be noted that jealousy, envy, and greed are all evidence of the inherent sinful passions present in every human heart. They are not spawned by economic activity. To assume that these vices are the outgrowth of economic action displays ignorance of what constitutes a free market.

A free market is an institutional arrangement of private property and voluntary trade. It’s also a means whereby we harness our God-given resources—both natural resources and our time, talent, and creativity—and use them for the good of others. A free market provides us with a chance to “seek the peace and prosperity” of our communities, as the prophet Jeremiah exhorts in Jeremiah 29.

The only way to succeed in such an economic environment is by continually serving your customers with goods and services that they value more than what they must give up to get them. One of the first principles of economic exchange is the realization that there are mutual gains from trade. Otherwise, no trade would develop in the first place. If you want to succeed, you have to serve the other person by offering them something they value.

Consider for a moment a world where you had to produce all the goods and services you consumed solely by your own efforts without the benefit of another person. A casual consideration of such a world reveals that we are great beneficiaries of economic exchange and voluntary trade.

Activities as simple as making a ham sandwich for lunch would be impossible if it all depended on you. You would have to:

  • Find the pig
  • Kill the pig
  • Prep the pig
  • Cure the ham 
  • And slice it.

To accomplish these tasks would require a wide variety of tools and ingredients you would also have to produce yourself. The amount of labor needed to complete every task would take years.

Yet for the fraction of an hour of your labor, someone is willing to make a sandwich for you. This is evidenced by the fact that Subway advertises foot-long sandwiches for five dollars. Not only that, but everyone who had a hand in the labor needed to produce your sandwich did their work voluntarily. No one forced them to do what they did. They voluntarily chose to put their God-given energy, talent, and time to use.

This process is like that outlined in the video, I, Smartphone, which outlines how free markets harness our talents and creativity to serve one another across the globe.

When we begin to think about the question of markets and morality in these terms, what would be immoral and reprehensible would be a situation where some people forced other people to do certain things for them or else be punished in some way. God created us each with a unique set of gifts, and if we are to discover and develop these gifts within the context of our vocations, we need the freedom and opportunity to do just that.

Editor’s note: Explore biblical perspectives on the free market in Counting the Cost: Christian Perspectives on Capitalism.

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On “Flashback Friday,” we take a look at some of IFWE’s former posts that are worth revisiting. This article was previously published on April 5, 2013.

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