In the 16th century a Catholic theologian named Luis de Molina maintained that God's hypothetical knowledge of what would be was logically prior to His divine creative decree. This basically meant that though God has knowledge of any and all true propositions, he also has knowledge of counterfactual truths.
What is a counterfactual?
Counterfactuals are conditional statements in the subjunctive mood.[i] For example: "If I had a million dollars, I would purchase a red yacht."[ii] We use these types of sentences all the time, “If I pulled out into traffic right now, I would get into an accident.”[iii] They are crucial for our daily-decision making process.
God also utilizes counterfactuals in reference to His creation. He has knowledge of what would be given any situation in any feasible world. So if this knowledge is logically (not chronologically) prior to the divine creative decree, this means God knows what would have happened if Peter choose to affirm Christ three times instead of denying Him three times. He also knows a feasible world in which it wasn’t Peter who denied Christ but it was actually John who freely denied Christ. But because this comes logically prior to the creative decree God chose a world in which Christ would be freely denied by Peter three times.
What implication does this lead to?
This affirms free will. God looking at all the feasible worlds so chose a world in which Pilate, if placed as the prefecture of Palestine in AD 30, would freely choose to have Christ crucified. God does not tinker with free will here. He simply chose a world to create that given the players in the game, they would freely choose to bring about a certain reality. Other views on divine providence strip free will from creatures (Theological Determinism, Open-Theism) and can even result in making God the author of sin. If God so determined to make things happen then He can be attributed to making Judas sin by betraying the Son of God and thus God was the cause of Judas’ trip to eternal damnation. But how can God be the author of sin?
There are certainly more things to be said of Middle Knowledge but I wanted to keep this short. I will close with another quote from William Lane Craig on Middle Knowledge,
“Via His middle knowledge, then, God can have complete knowledge of both conditional future contingents and absolute future contingents. Such knowledge gives Him sweeping sovereignty over the affairs of men. And yet, such an account of God’s knowledge is wholly compatible with human freedom, since the circumstances envisioned in counterfactuals of creaturely freedom are non-determining, and, hence, freedom-preserving.”[iv]
[i] William Lane Craig, What Does God Know?: Reconciling Divine Foreknowledge and Human Freedom (Norcross, GA.: RZIM, 2002), 41.
[ii] This can be true or false, but clearly in the actual world I do not have a million dollars and thus I do not own a red yacht. This is why the antecedent “if…” and/or the consequent “then…” can be contrary to fact, however, sometimes the antecedent and/or the consequent is true. This is an example of a counterfactual statement.
[iv] William Lane Craig, What Does God Know?: Reconciling Divine Foreknowledge and Human Freedom (Norcross, GA.: RZIM, 2002), 57.