Forward by Lawrence Read

Lawrence Read is the president of the Foundation for Economic Education.

“You shall know the truth,” said Jesus (John 8:32), “and the truth shall set you free.”

The immediate context in which Jesus spoke those familiar words prompts many Bible scholars to assert that their meaning is strictly spiritual. In the previous passage, it’s clear that He was addressing believers, especially those who converted that very day: “If you hold to my teaching, you are really my disciples.” The words of John 8:32 advise believers that Jesus is not only the conveyor of truth but the essence of truth itself. Believing in Him liberates one from the lies and snares of a sinful world and promises an after-life where truth will reign supreme.

But in the larger context of how we should arrange our lives and relationships in this physical world, truth liberates in other ways too. Christians should not find this surprising. The God who created humanity would be inconsistent and inexplicable if He intended his creations to be free spiritually but slaves in every other way.

At least that’s how I see it as an economist and a Christian, and that’s why I commend this book by Daniel J. McLaughlin—not just to Christians, but to anyone who appreciates the truth.

Economics is the study of purposeful human action in a world of limited resources and unlimited wants. Properly understood, it explains an immense volume of human behavior and activity. The starting point for it all is not some collective abstraction such as “nation” or “society” or even the more localized concept of “community.” It all begins with the only thinking, acting, decision-making entities on the planet—specific, identifiable individuals without whom none of those abstractions would make sense or even exist. We are not a world of pre-programmed, identical robots. Each of us is unique, which means that to be fully human, we must be free to exercise our uniqueness through our personal choices.

Governed by law that protects each individual’s inherent right to be himself, a free economy is both human and humane. An unfree economy means that some people (those with political power) can suppress or even prohibit the peaceful, voluntary and mutually-beneficial interactions of consenting adults. A little bit of that may be tolerable even though it’s harmful, but a lot of it is called slavery, and that makes possible what a pretty good wordsmith once coined as “man’s inhumanity to man.”

Informed by his Christian principles, Dan unravels the beauty of a free economy in this book. It truly is a miraculous thing, which is what we should expect. The Creator obviously put a lot of thought into it. Each unique, individual human he created acts to improve his material well-being. That leads us to specialize (the division of labor) and then trade with each other, leaving both sides to voluntary transactions better off than if we ignored or fought each other. Moreover, no top-down, mandate-issuing dictator could possibly know a fraction of the supply and demand information that emerges naturally and spontaneously in the form of prices.

Everything of value has a cost that somebody must pay. Nations become wealthy not by printing money or spending it, but through the capital accumulation of individuals and the subsequent creation of goods and services by individuals. Higher standards of living, if they are not to come at someone’s expense, can only come about through greater production and trade, sound money and the ethical values that keep us honest, responsible and future-focused.

When people have little or no economic understanding, they embrace the “quick fix” and support impractical “pie-in-the-sky” solutions to problems. They may think that whatever the government gives must really be “free.” They don’t know the difference between the budget deficit and the national debt. They might even think that trade is a bad thing, that if we shut the borders to the flow of goods our living standards would rise. They will not only be unable to see through economic snake oil, they won’t be able to identify its harmful consequences either. In the absence of sound economics, a lot of what starts out sounding “compassionate” ends up doing real harm to real and innocent people.

As Dan explains and illustrates, a free economy rests upon indispensable institutions and conditions. Private property is one and justice (to each man his due) is another. Between the Golden Rule and the Ten Commandments alone, property and justice would seem to enjoy a solid Biblical foundation. But there’s much more to a free economy, much more to what Christianity says about how and why humans function best when they’re blessed with one. Right here in one very accessible volume is a whole lot of what a compassionate person needs to know so his compassion really can do good, and only good.

When you’re finished with Compassion and Truth, you will have learned a great deal about the science of Economics. You’ll understand its connection to Christian ethical values. You’ll see how this knowledge can lead you toward the right policy prescriptions for improving human lives and away from the seductive but destructive, dead-end proposals that enslave and impoverish. You will have the truth, and if enough of us stand by it and practice it, it will make us free.

Lawrence W. Reed
Foundation for Economic Education—
Atlanta, GA
October 2015

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