Practical Evidence of Economic Theory

In my post this morning, I suggested that human activity and innovation is best encouraged through economic liberty and social encouragement, rather than exploitation or investment.

Within that sort of environment, of course, people can be exploited when they don’t know their own value and investment allows them to do the things that they want to do, economically.  But those are detractions or amplifications of the initial principle that freedom and the potential for self-defined self-fulfillment are the starting points for economic progress.

This reminds me of something else I’ve come across recently.  Based on brain imaging, researchers have found:

… a tight deadline increases people’s urgency and stress levels. These people show more activity in the brain’s “task positive” network, which we use for problem solving. But it’s not the part of the brain that comes up with original ideas.

Or consider this one:

Roderick Gilkey, a professor of management and associate professor of psychiatry at Emory University, conducted a study with colleagues to look at what happens when executives are making strategic decisions. …

They expected to see a lot of activity in the prefrontal cortex, the area of the brain known for its involvement in things like planning and logical reasoning. There was activity there, but different areas of the brain were dominant—those involved in social and emotional thinking. And the more adept strategic thinkers in the group displayed much higher levels of activity in these areas.

“The potential conclusion is that people who are good at strategy are better at sensing or feeling their way through strategies, rather than relying only on logic and being rational,” says David Rock, director of the research organization NeuroLeadership Institute.

It’s speculation, of course, but it’s not difficult to translate these findings to my initial point.  When your economy is structured from the top down, with limited or conditional economic freedom, the workers must limit themselves to the deadlines and facts and rules that they’ve been told must apply.

This doesn’t mean the ideal economy would give everybody the leeway to do whatever they want on somebody else’s dime, which is the progressives’ false promise; we need structure and motivation, too.  But it does mean that we need freedom as our basis.  That engineer who’s putting in his time building something for a larger company should feel himself free to work on his own ideas and, when he’s built up enough resources, to launch his own venture without facing a wave of laws and regulations that he had no reason to consider, before. 

The same is true for plumbers, hair dressers, or any other professionals.  That’s how an economy — a society — advances.

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