Read: Introduction and First Principles

LECTURE

INTRODUCTION & FIRST PRINCIPLES

Economics is a scientific discipline that applies to the choices we make in everyday life. Some people divide economics into two areas, the big picture and the little picture. They say that the principles that apply in one area do not apply in the other.

But this isn’t true: the economic principles that apply to individuals also apply to large, national economies. Why is this? Because all national economies are made up of individual people making individual choices. Economics always comes down to the choices of individuals.

Economics is the study of how God ordered the world. Sometimes it’s presented in a boring, mathematical way, but this does a disservice to God and His creation. God made economics an interesting and important part of the created order. It’s the way that it’s approached that often makes it boring. The truth is that God created economics to help man be a better steward of creation.

The first and most basic economic principle is this: God owns everything. God created the world ex nihilo, or out of nothing. Since it is His creation, it is also His possession and He can do with it as He pleases. God’s creation of the world out of nothing is a demonstration of the following two things:

1. His sovereign power: God can choose to do whatever He wants.
2. His sovereign authority: God can choose to direct His creation to whatever end He wants.

God’s creation has as its purpose the manifestation of His glory. We can therefore learn specific things about God by looking at the creation. God governs the world and exercises a purposeful providence over it. God created natural law to order His creation and to provide a framework within which man can live. God does all these things not only to manifest His glory, but also to bless man. In seeking to manifest His glory, God ultimately acts in His own self-interest—which is also in the best interest of man.

God created man to reflect His image. As a result, certain attributes of God are mirrored in man’s attributes:

• Man acts with purpose.
• Man acts in his own self-interest.
• Man makes choices.
• Man acts rationally.