Economics 101 & Public Square

Economic Freedom and Care for the Environment: Mutually Exclusive or Mutually Beneficial?

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In the late 1970s, our energy outlook was not looking good. Over six years, gas prices had tripled and there were shortages and long lines at the pump. It appeared that we were at the mercy of OPEC (Organization of the Petroleum Exporting Countries). Experts predicted that we would be out of oil soon, perhaps as early as 1990.

Man-Made Crises or Man-Fabricated Crises?

The gasoline shortage was just part of the story of gloom and doom we heard on a regular basis. Stanford University professor Paul R. Ehrlich’s best-selling book, The Population Bomb, sounded the alarm in its opening lines:

The battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate…

Ehrlich introduced a whole generation to a new and improved eighteenth-century Malthusian catastrophe. Not only, Ehrlich maintained, were we on the eve of mass starvation of humans over the next two decades but the increasing population boom would rapidly use up all of our energy resources.

Sitting in line for hours to fill our cars with gas led many of us to believe he might be right. The population of the world in 1970 was 3.7 billion.

A Crisis Mirage

Today the population of the world is 7.5 billion and expected to climb to 11.2 billion by 2100. A $3.00 gallon of gas today is a bargain compared with the prices in the late ‘70s ($1 in 1977 adjusted for inflation is worth $4.15 today). According to BP, global reserves of oil could almost double by 2050 due to extraction technology advances and competition among energy sources.

What happened to the projected mass starvation? In the late ‘70s, more than 40 percent of the world was living in extreme poverty. Today fewer than 10 percent are and, according to a 2015 World Bank report, more people have climbed out of abject poverty in the last 25 years than ever before in all of history. If this trend continues, we will see extreme poverty almost completely eradicated by 2030.

The population growth led to neither mass starvation nor energy resource exhaustion. Why? Economic freedom.

Crises Averted Through Freedom to Innovate, Problem-Solve

This historic economic movement was not the result of government redistribution of wealth, the United Nations’ national debt forgiveness, or even Christian charity. It was brought about by increasing economic freedom.

This powerful economic environment allowed engineers, inventors, and entrepreneurs, working out of their own self-interest, the opportunity to solve problems, which led to flourishing instead of scarcity. People found ways to produce more pounds of food per acre. They found ways to locate and extract more oil, while at the same time making the products that use this resource more efficient.

Economic Freedom and Biblical Flourishing

Economic freedom, through the free-market economic system known as capitalism, sets us on the path of flourishing as we steward our resources to God’s glory and to serve the common good. Flourishing gives people hope and provides a glimpse of the way things could be—and will be—in God’s kingdom.

In IFWE’s new book, Counting the Cost: Christian Perspectives on Capitalism, Cal Beisner makes the following statement about capitalism:

Its historical track record shows that it’s better than any other economic system so far devised at raising people out of poverty and making efficient use of resources.

The Dividends of Economic Freedom: Innovation, Problem-Solving, and Flourishing

Not only does economic freedom provide a path out of poverty and into flourishing, countries with more economic freedom have higher incomes (even among the poor), greater happiness, better protected civil rights, cleaner environments, and longer life expectancy. They also have less corruption, lower infant mortality rates, less child labor, and lower rates of unemployment.

Today, some Christians are unaware that economic freedom has actually had a positive impact on the environment. This positive impact has everything to do with property rights.

As IFWE scholar Anne Bradley and economist Joe Connors explain in the paper “Economic Freedom and the Path to Flourishing”:

Private property rights provide incentives for people to cultivate land and resources so as to increase its future value. They also provide protection against the destruction of large amounts of forest. It is in countries with weak private property rights and little economic freedom that one finds the large-scale cutting and clearing of forests.

Economic freedom is predicated on the property rights of individuals, starting with your ownership of your talents and labor. When you can take what is yours and use it to innovate, you create wealth not just for yourself but also for others.

Old Testament scholar Walter Kaiser notes the idea of property rights is reinforced by the eighth commandment “You shall not steal” in Exodus 20:15, and defended throughout the scriptures (Exodus 21:28-36; 22:1-15; Deuteronomy 22:1-4; 23:24-25; and Proverbs 22:28; 23:1).

Stewarding all of creation well, which naturally includes both wise use of our resources and care for our environment, harkens back to the cultural mandate and our original job description:

The Lord God took the man and put him in the Garden of Eden to work it and take care of it (Genesis 2:15).

May we continue to enjoy and advance economic freedom so that fewer people live in poverty and more people can enjoy the myriad dividends that come with it—not least of which are a better-cared-for environment and the ability to innovate to surmount the next challenges that come our way.

 

Does free market capitalism harm the environment? Read about this topic and other important questions in IFWE’s latest book, Counting the Cost: Christian Perspectives on Capitalism. Order today in the IFWE bookstore

Help reach more people with this critical message of freedom, fulfillment, and flourishing! Donate to IFWE today.

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  • mark barr

    makin’ me think before my first cup of coffee…. my mind is infatuated with God’s providence right now as a teacher of systematic theology…. your article brings to the forefront the dynamic interaction of man’s will and God’s providence. I cannot think out more than a few moves on a chessboard with my feeble mind; to imagine that the World will be made new requires stretching my faith. Yet reading your article fills my heart and mind with AWE and WONDER at His providence. Thank you for this work.

  • Mutanu Mumo

    I’m amazed at the correlation between private property rights and the environment. I believe this also translates to ability to own land. Great article.

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