According to most theists, God has an exhaustive foreknowledge of everything. If this is true, why did God create man knowing that man would sin?
Before answering your question, I'd like to point out that the real glory of the gospel isn't the justification of sinful men. Surprizingly, that isn't the real glory of the gospel at all. The true glory of the gospel is that God is glorified all the more against the backdrop of defeating sin and evil by being able to save sinful men. For this the saints shall sing to his glory forever.
We have an allusion of the real glory of the gospel when Jesus walked among and ate with the lowest of the low. His righteousness, his holiness were seen all the clearer against the backdrop of the sinful and the wicked.
Why did I just tell you this? Because most inquires that point out the problem of evil and an omnipotent, good and holy God seemingly always look horizontally and not vertically. They cry, what of me, me, me and the little pigmy paddling down the Amazon and not toward God.
I suppose that I could walk you through the endless reasoning to justify evil in the world, but frankly I'd like to skip that for now. Instead, l'd like to visit two similar inquires from the Bible pictured through Job and Habakkuk.
Nelson's New Illustrated Bible Dictionary comments on these inquires, saying:
Habakkuk begins his book with a cry of woe. Injustice is rampant, the righteous are surrounded by the wicked, the law is powerless, and God doesn't seem to care about the plight of His people (1:1-4). Habakkuk wonders why God is allowing these things to happen.
God's reply brings little comfort to the prophet. He explains that the armies of Babylon are moving throughout the ancient world on a campaign of death and destruction. At the time when Habakkuk received this vision, the Babylonians had already defeated Assyria and Egypt. The implication is that Habakkuk nation, Judah, will be the next to fall.
The prophet was shocked at the news. He reminded God of His justice and holiness (1:12-13). How could He use the wicked Babylonians to destroy His Chosen People? Surely He realized the sins of His people were as nothing, when compared to the pagan Babylonians "Why do you holdeth thy tongue when the wicked devoureth the man that is more righteous than he?" he asks (1:13). This direct question indicates Habakkuk's great faith. Only a person very close to God would dare question the purposes of the Almighty so boldly. God assures Habakkuk that the Babylonians will prevail not because they are righteous, but because they are temporary instruments of judgment in His hands (2:4). Then he pronounces five burdens of woe against the Babylonians (2:6, 9, 12, 15, 19). God will not be mocked; the end of the Babylonians is as certain as the judgment they will bring on Judah. In all of this, God will vindicate His righteous character: "For the earth shall be filled with the knowledge of the glory of the Lord, as the waters cover the sea" (2:14).
After this assurance, Habakkuk breaks out with the beautiful psalm of praise to God contained in chapter 3. This is one of the greatest testimonies of faith in the Bible.
Job also struggled with the question of why God allowed evil:
After job and his friends have debated the question of why Job has suffered at length and have failed to arrive at a satisfactory solution, God Himself speaks from a whirlwind. He does not enter their discussion about why the righteous suffer; He reveals Himself as the all-powerful, all-knowing God. God's message to Job is that He does not have to justify or explain His actions. He is the sovereign, all-powerful God who always does what is right, although His ways may be beyond human understanding.
Job is humbled by this outpouring of God's power, and he learns to trust where he cannot understand. This leads to his great affirmation of faith, "I have heard of thee by the hearing of the ear, but now my eye seeth Thee" (42:5). God so orders Job to pray for the misgivings of his three friends. Then the book closes with the birth of more sons and daughters and Job's rise to a position of even greater wealth and prominence. Job lived out his additional years as a happy, contented man: "So Job died, being old and full of days" (42:17).
With Nelson's commentary laid down as a biblical backdrop that frames the big idea to trust that God shall always act righteously, we can move into the classic arguments that address the problem of evil:
God didn't create evil. Evil is simply a lacking of good. God is good, and the things that He created are meant to be good. But with the increased capacity of good a created being possess, its capability of evil also increases should the creation reject God. Obviously an inanimate object such as a rock lacks much capacity to do good and coincidentally it also lacks much ability to do evil according to this argument (although a falling rock could knock sense either into [good], or out of you [evil])—but a living creature, one who has received the invaluable gift of life, God calls for an unreserved, grateful and active response to do good. Thus good could also be defined in creaturely terms as the creatures' response to the giver of life that meets with favor in the eyes of the giver of the gift of life. Whereas evil could also be defined as an unfavorable response to the giver of the gift of life.
In anticipation to a possible objection that you never asked to be made alive in the first place and therefore should not be obligated to respond to the giver of the gift of life, I will point out that in order to be asked in the first place, one would have to precede their own existence. This would result in a logical inconsistency. Life is given to us prior to any choice of our own.
It should also be noted that God has the ability to stop evil, but what is the greater good: passive complacency or active freedom? Divine providence has determined the greater good is to enable human free agency. Although God has limited human free agency (I cannot fly by flapping my arms for example), the providence of God grants and permits human free agency where that freedom is enabled to act. If God were to omnicausally control all events, human free agency would not be real because people would not be responsible for their actions. Thus it is said that God doesn't unilaterally operate our wills, but cooperates with our wills so as to be present in and with our every activity. In this way God funds and resources our free wills. A fine point should be made at this point: God cooperates with our will so as to allow the effects of our freedom and choices, but not to applaud the defects of our freedom. Clearly because there is evil and sin in the world we can see that God permits freedom, the greater good, to distort an otherwise good creation, but this does not mean that God affirms or enjoys the defective side of freedom like cursing him or flying wide-bodies into tall buildings.
The basic free will defense goes like this: The real question isn't if God gets His will, but if God allows man freewill. If man indeed does have freewill then one cannot escape the fact that man will at times not fulfill God's will for him. If man has not freewill then God Himself is the author of the sin he hates (God forbid!). The fact that sin exists makes it illogical and contrary to say God always gets His will. Nevertheless, the only way God could overcome evil from a freedom perspective is to so restrict freedom that whatever was left could not cause evil. Thus God would revoke that most wonderful of human gifts: the moral choice of selecting right over wrong.
From this perspective, one could argue that a world with choice and evil which is ultimately destroyed is a greater good and a better world than a world without choice but no evil because it is always superior to willingly obey and love than to be forced to obey and love.
While that argument does justify some sort of freedom, it still doesn't entirely handle the problem of evil because God who knows all things would have known that free will would ultimately involve evil as you've pointed out.
Therefore we look to what is called the "Best Worlds Defense."
The Best Worlds Defense goes like this:
1) God knows all possible worlds.
2) God could make all the possible worlds.
3) God is omnibenevelant: thus this is the best possible world.
Therefore, we reason, any evil that exists in this world serves the greater good of God.
The problem with this argument is that we still have what seems to be unjustified evil in the world and because of this it can be argued that the Best World Defense fails to account for this.
Since the Christian faith posits an ultimate end to evil, all Christians really need to do is justify the current evil. To do this we introduce an argument called "The Best Way to the Best World Defense."
Although the The Best Way to the Best World Defense has many varieties, we may summarize it by stating:
1) This is not yet the best possible world.
2) This is the best way to get to the best possible world.
Therefore, God will not allow anymore evil than is necessary.
That is a very simplistic way of stating the Best Way to the Best World Defense. With greater depth, we may argue that a moral world where both good and evil exist is a greater good than an amoral world were only good exists because it is a greater good if one chooses the good over the evil rather than having no choice. Nevertheless an amoral world can sometimes appear to be a better option for those who suffer from evil in a moral world, hence the theists' need to justify evil in the first place.
With this in mind, the Christian argues that heaven is the best possible world because it is a good world that contains no evil; yet it is a moral world because all those who dwell in heaven have chosen the good over the evil to get into heaven. Therefore, this world is the best way to the best possible world because evil serves God's purpose by making that best possible world, possible.
Ta-da, justified evil!
Regardless, we still have difficulty understanding evil. Both Job and Habakkuk made appeals to God as to why evil is allowed, and God did not answer either of them. He simply stated that He is God, and that we are not to lean upon our own understanding but trust in Him. To that I say, fair enough.
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