St. John Damascene: Why God Allows Evil People to Be Created

From An Exposition of the Orthodox Faith (Book IV):

God in His goodness brought what exists into being out of nothing, and has foreknowledge of what will exist in the future. If, therefore, they were not to exist in the future, they would neither be evil in the future nor would they be foreknown. For knowledge is of what exists and foreknowledge is of what will surely exist in the future. For simple being comes first and then good or evil being. But if the very existence of those, who through the goodness of God are in the future to exist, were to be prevented by the fact that they were to become evil of their own choice, evil would have prevailed over the goodness of God. Wherefore God makes all His works good, but each becomes of its own choice good or evil.