In Universal Economics, Armen Alchian and William Allen state, “Since the discouraging fiasco in the Garden of Eden, all the world has been a place conspicuous in its scarcity of resources, contributing heavily to an abundance of sorrows and sins.”

The authors launch their classic textbook with this stark assessment, echoing Genesis 3’s language. A minor quibble to begin: Something is scarce if the desire for it is greater than what is freely available in nature. In other words, scarcity wasn’t foreign to Eden. Adam and Eve couldn’t be in two places simultaneously. Even in Eden, scarcity reminded us of our creatureliness. Still, the Fall’s fallout saw God cursing the ground and dramatically intensifying scarcity.

Economic science then arose as an extensive commentary on the consequences of living “east of Eden.” So Alchian and Allen continue in their book, correctly perceiving that postlapsarian scarcity has plunged mankind into toil and sorrow:

Most of what you enjoy is acquired by your efforts, accompanied by strain, sweat, and anxiety. Two apparent devils restrict what you can have—the limited amounts of goods and services available, and the rest of us who also want them.

Scarcity, in other words.

In a recent essay on economic literacy, which expounds “four pillars of economic understanding,” Peter Boettke (GCC, ‘83) identifies scarcity as “the first pillar,” arguing that it “brings truth and light to the darkness and pierces the fog to make sense of all human endeavors.”

This essay examines Boettke’s four pillars for what the Christian economist, specifically, can glean from them. Christians at times eye economists warily, agreeing with the foremost critic of economics, Thomas Carlyle, that it is a “dismal science.” Yet, this is our Father’s world—which he pronounced “very good” (Gen. 1:31, ESV)—and economics is indispensable to grasp how it works. I will argue that the “pillars of economic understanding” are not merely consistent with Christian teaching, but that they positively enhance the Christian economist’s understanding, obedience, and ultimately worship.

Economics may not be known for inciting a worshipful response, but maybe it should be. In 1850, the magisterial-though-unfinished magnum opus of Frederic Bastiat—Economic Harmonies—appeared. The name stemmed from his argument that, in free societies, the interests of mankind are essentially harmonious. Contrary to the view of his contemporary Karl Marx, Bastiat shows, for instance, that the interests of capital and labor are aligned and not at odds. In this and other works, he likewise demonstrates that trade is mutually beneficial, even when it crosses political boundaries. And so on. In my opinion, Bastiat could just as well have titled his treatise Economic Doxologies because the phenomena he examines reflect the mind of the Creator and therefore call forth a properly worshipful response.

Before doxology, however, the economist must perceive the seriousness of mankind’s “social dilemma,” to borrow the title of a classic collection of essays by economist Gordon Tullock. Thus, Boettke’s first pillar of economic understanding offers a sobering reality check. We inhabit a world of dramatic tradeoffs where utopia is unobtainable, philosopher Belinda Carlisle’s theorizing notwithstanding. The Christian economist repeats after both Genesis 3 and the iconic Thomas Sowell in his collection of essays: Reality is not optional.

The first pillar of economic understanding enables us to accurately and unflinchingly diagnose the social predicament of Adam’s fallen race. But don’t despair! Accurate diagnosis aids our efforts to “fill and subdue” the earth, while somehow still “loving our neighbors as ourselves” along the way (Gen. 1:28; Mk. 12:31, ESV). 

The Price System Declares the Glory of God

As James M. Buchanan’s 1964 presidential address reminds us, in the face of heightened scarcity, common grace offers mankind a lifeline: cooperation. Adam Smith marveled in his book, An Inquiry into the Nature and Causes of the Wealth of Nations: “Man stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.” And, famously:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Exchange hinges on a radical idea: My wants don’t oblige my neighbors. Want something? Offer value. Exchange demands maturity, not toddler tantrums. In exchange, we heed the apostle Paul’s admonition to “look not only to [our] own interests, but also to the interests of others” on a truly grand scale (Phil. 2:4, ESV).

Trade gives rise to prices. And the price system inspires Boettke’s second pillar of economic understanding. Briefly, the price system transforms efforts to provide for self into gains for countless other people. Considering what the price system facilitates, we are reminded of G.K. Chesterton’s oft-quoted observation that, “The world will never starve for want of wonders; but only for want of wonder.”

Consider: A Concord grape farmer in Washington state innovates a new growing technique that is more resistant to pests. Competition kicks in, and other farmers imitate. Larger yields follow, and world jelly prices fall. Jelly consumption rises, spurring demand for peanut butter. The price of peanut butter rises momentarily, and in Gujarat, India, peanut growers expand by hiring more workers at wages that beat the alternatives. New peanut farm workers unknowingly help Pennsylvania jelly eaters satisfy their desire to eat more PB&J sandwiches. It’s cooperation on a massive scale, displaying God’s “goodness and wisdom”…

Prices generate profits and losses, which guide scarce resources to where they can help the most at the least sacrifice. When producers err—say, by transporting peanut butter via planes instead of cheaper trains—they incur losses, which incentivizes adjustments. (See this argument fleshed out in a classic 1920 article by Ludwig von Mises: “Economic Calculation in the Socialist Commonwealth.”)

In his seminal paper, Vernon Smith, a Christian and economics Nobel laureate, captures the wonder we should experience when we reflect on the price system: “At the heart of economics is a scientific mystery: How is it that the pricing system accomplishes the world’s work without anyone being in charge?” This, the central question of economic science, should stir our hearts like the Psalmist who wondered at the heavens. 

For the Christian, the second pillar of economic understanding is an occasion for doxology. The economic laws that give rise to the prices that facilitate widespread cooperation are part of the created order that our good God created and declared “very good.”

Editor’s Note: This article was originally published by the Center for Faith & Public Life at Grove City College. This excerpt has been republished with permission.