A Price Is a Signal Wrapped in an Incentive to Be Coordinated by God

Last updated on: February 28, 2015 at 11:35 pm by Acton Institute

A Price Is a Signal Wrapped in an Incentive to Be Coordinated by God 2015-02-28T23:35:32-04:00 Acton Institute

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By Joe Carter

When Christians think of the majesty of God’s handiwork we tend to think of the visible aspects of nature. We agree with King David that, “The heavens declare the glory of God; the skies proclaim the work of his hands” (Psalm 19:1). But there are intricate and beautiful aspects of God’s creative genius that we don’t often think about—or don’t think about as being created by God.

Take, for instance, the price system. As economist Alex Tabarrok says in the video below, “If it had been invented, the price system would be one of the most amazing creations of the human mind.” The price system is indeed an amazing creation—but of the divine mind. It’s one of God’s means of coordinating human activity for the purposes of human flourishing.

As with most good gifts given by God to humans, we are able to corrupt it and use it in ways that harm our neighbors. Yet for the most part, the price system is an ingenious method of communication that has been used to improve the human condition.

In this video, Tabbarrok explores the mystery and marvel of prices and discusses how the price system allows for people with dispersed knowledge and information to coordinate global economic activity.

(Originally published at the Acton PowerBlog)

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