The Adam Smith Institute, in summarizing Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, wrote this:

The first theme in The Wealth of Nations is that regulations on commerce are ill-founded and counter-productive. The prevailing view was that gold and silver was wealth, and that countries should boost exports and resist imports in order to maximize this metal wealth. Smith’s radical insight was that a nation’s wealth is really the stream of goods and services that it creates. Today, we would call it gross national product. And the way to maximize it, he argued, was not to restrict the nation’s productive capacity, but to set it free.

I cannot think of a better quote from an economist to help us understand the biblical principles of creativity, purpose, and freedom that underlie poverty alleviation: “And the way to maximize it, he argued, was not to restrict the nation’s productive capacity, but to set it free.”

If you are a regular IFWE blog reader, you know that our goal is to educate and inspire Christians to live out a biblical theology that integrates faith, work, and economics.

In our twelve days of significance series, we are establishing foundational principles that we think inform how Christians can and should integrate these three areas.

In fact, we believe that these are biblical principles that are woven into the very fabric of our creation, and are what we need to achieve true flourishing.

1. Creativity: We all born with special gifts and talents that can serve the common good.
2. Purpose: We are called by Christ to use our gifts through our work to contribute to flourishing.
3. Freedom: We need an opportunity society where the least among us can flourish and experience long-term thriving.

The first two principles are necessary but not sufficient conditions for human flourishing. We are special, gifted, and matchless. Each of us has not only the capacity to innovate, but the call from Christ to unleash our ingenuity on the world.

I like what Maya Angelou has to say about creativity:

You can’t use up creativity. The more you use, the more you have.  

I think this gets to the issue of our individual dignity.

We were created by God to do special things. We are more fully alive in Christ when we are actively, obediently using the gifts he gave us.

What we want for the poorest among us is to experience long-term dignity which comes from their ability to showcase each of their gifts to the world.

We need freedom in addition to creativity and purpose. To get freedom, to get flourishing and improve the lot of the poorest among us, we must understand markets.

What Adam Smith understood in his insights as a moral philosopher was that human potential was limitless. When we put our innovative spirit to work, there is no telling what we can get. We know that human ingenuity has lifted billions out of poverty over the last two hundred years.

The power of God-given human ingenuity is a biblical principle carrying economic significance. Jeremiah 29:7 reads:

Also, seek the peace and prosperity of the city to which I have carried you into exile. Pray to the Lord for it, because if it prospers, you too will prosper.

Elise Amyx mentioned this in her post earlier this week when she spoke of the fixed-pie fallacy. Jeremiah is saying that if we seek the peace and prosperity of the city, we all benefit. It’s a positive-sum gain: I win and you win too, rather than me winning at your expense.

A society which supports work, innovation, and ingenuity, and allows people to keep what they earn, while not overburdening them with state interference is one where the poor have a chance to prosper.

When we  look out at the world we know this to be true.

The World Bank reports that in China alone, since initiating market reforms in 1978, 600 million people have been lifted out of poverty with GDP growth averaging 10% per year. This is no accident, and it is not just specific to China.

Markets provide a space for people to use their gifts and be creative, to experience the dignity of work. Here is how markets do this:

1. Markets rely on well-defined and protected property rights which create incentives for work and productivity.
2. Profit and loss signals work to encourage the efficient use of scarce resources by entrepreneurs.
3. Prices coordinate millions of dispersed individuals across the globe to respond in the most efficient ways to changing levels of scarcity.