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01 / 05
Disagreeability, Mother of Invention

Blog Post | Innovation

Disagreeability, Mother of Invention

Maximizing invention and innovation will require us to overcome the fear of growing populations, eccentric individuals and unique ideas.

Innovation requires inventions, and inventions begin with ideas. Though artificial intelligence may, at some point in the future, supplement or complement human ideas, at present only humans are capable of producing new ideas. Or, as the George Mason University economist Don Boudreaux noted in a 2018 article, “There Are No Natural Resources,” “the human mind is the ultimate resource because it, and only it, creates all of the other economically valuable inputs that we call ‘resources.’” That said, ideas are a bit of a mystery. They don’t show up in magnetic-resonance imaging or in people’s DNA. We don’t know who will have them or when they will appear. To quote from Matt Ridley’s 2020 book How Innovation Works: And Why It Flourishes in Freedom:

Unlike most team sports innovation is not usually a choreographed, planned or managed thing. It cannot be easily predicted, as many a red-faced forecaster has discovered. It runs mostly on trial and error, the human version of natural selection. And it usually stumbles on great breakthroughs when looking for something else: it is heavily serendipitous.

In fact, most people don’t invent anything. In his 2018 book The Social Leap: The New Evolutionary Science of Who We Are, Where We Come From, and What Makes Us Happy, the University of Queensland psychologist William von Hippel noted a U.K. study showing that that only 6 percent of people reported modifying a product or innovating in the last three years. The share of innovators was even lower in other countries (5.2 percent in the United States, 5.4 percent in Finland, and 3.7 percent in Japan). It may seem strange that in a species that has thrived through technology, only a small portion of the population invents anything at all.

But while human achievement is largely measured by technological advancement, it’s important to remember that our evolution was defined by social innovation. Figuring out how to throw a stone was a technical problem, but using stones to ward off predators required a social solution — coordinated bombardment. Homo erectus invented tools that were superior to those produced by previous hominids. But the division of labor, which improved the manufacture of those tools and enabled our ancestors to hunt large animals, was entirely social. Finally, fire increased our capacity to extract calories from food, but without using the former for social gatherings, we would never have developed the rich and diverse cultures that made it possible to accumulate knowledge. Technology makes our lives easier, but the success of our species is contingent on our ability to cooperate and organize as a society.

Moreover, since the evolutionary fitness of individual humans is primarily based on their ability to cooperate, most people, when confronted with a problem, choose a social solution over a technical one. If you need to put sunscreen on your back, it’s easier to ask your friend to rub it in for you than to MacGyver your own lotion-rubbing apparatus. The only reason not to ask for help would be that you didn’t have any friends around or (and this is crucial) that you had a unique personality characteristic that made asking for help unappealing.

Less social individuals appear to be more likely to invent a technical solution rather than a social one. That makes intuitive sense. People who would prefer to solve a problem by themselves would be more likely to invent something. Besides intuition, there are a lot of data that suggest a negative correlation between sociality and technical innovation. “Engineers and physical scientists show higher levels of autistic traits (one of which is diminished social orientation) than people in the humanities and social sciences,” von Hippel noted. “Unsurprisingly, engineers and physical scientists are also more likely than people in the humanities and social sciences to hold patents and are also more likely to innovate products for their own use. As a notable example, Silicon Valley is a hotbed of technical innovation and also features an unusual concentration of people on the autism spectrum.”

The pattern extends to sex differences as well. Why? On average, women are more social than men. In terms of work preferences, for example, the former are more interested in working with other people, while the latter are more interested in working with things, such as tools and computers. Moreover, men are four to ten times as likely to fall along the autism spectrum as women are. Perhaps not surprisingly, a study by the U.K. Intellectual Property Office found that women “account for just under 13 percent of patent applications globally.” This discrepancy cannot be fully explained by past discrimination — the share of patents held by female engineers, a Europe-wide study found, is one quarter of the share of female engineers in the labor force. In other words, technical innovation seems to be disproportionately a domain of somewhat autistic males.

Autism, noted the American psychologist Robert Plomin in his 2018 book Blueprint: How DNA Makes Us Who We Are, is not a distinct disease. Rather, it is a long spectrum of abnormality related to social, emotional, and communication skills. Individuals suffering from autism, as noted by the Centers for Disease Control and Prevention, may

not point at objects to show interest, not look at objects when another person points at them, have trouble relating to others or not have an interest in other people at all, avoid eye contact and want to be alone, have trouble understanding other people’s feelings or talking about their own feelings, . . . appear to be unaware when people talk to them (but respond to other sounds), be very interested in people (but not know how to talk, play, or relate to them), repeat or echo words or phrases said to them (or repeat words or phrases in place of normal language), have trouble expressing their needs using typical words or motions, . . . repeat actions over and over again, . . . etc.

Furthermore, autistic individuals tend to exhibit a particular combination of the “big five” personality traits. According to a 2014 study, Personality and Self-Insight in Individuals with Autism Spectrum Disorder, they tend to be “more neurotic and less extroverted, agreeable, conscientious, and open to experience.” Disagreeability, in particular, appears to be a psychological trait that’s conducive to invention and innovation. Disagreeable people, noted the writer Malcolm Gladwell, typically do not require the approval of others. “If you don’t care one iota what your peers think of you, you are essentially a sociopath,” Gladwell told a New York City audience in 2018. “But it is also a precondition for doing things that are extraordinary.”

The Northwestern University economic historian Joel Mokyr noted in his 1990 book The Lever of Riches, a study of innovation from classical antiquity through the industrial revolution, that “technological creativity, like all creativity, is an act of rebellion.” Inventors and innovators, in other words, must be allowed to do things that others disapprove of without being subjected to social opprobrium. That is crucial. Society and natural selection favor agreeability and social innovation. Inventors and innovators, in contrast, are disagreeable and favor technical innovations. If social pressure, including norms, mores, and speech codes, prevents autistic and disagreeable people from flourishing, society will tend toward technological stagnation. Conversely, a society that tolerates disagreeability (as well as neuroticism and introversion) will enhance its potential for technological innovation.

Free, which is to say open and inclusive, societies have had a relatively good record of accommodating disagreeable people. But will that continue? There are plenty of dark clouds on the horizon. Our society appears to be growing less tolerant of eccentricity, which could have profound consequences for the future of invention and innovation. For what it is worth, I think that it would be a great mistake to purge academia and the private sector of individuals with quirky be-havioral patterns or peculiar views on hot-button social issues such as race, feminism, or homosexuality. Humanity should not have to forgo a cure for cancer or a new source of plentiful and reliable energy because the researchers involved are, in some ways, objectionable. Put differently, we should not sacrifice progress on the altar of niceness.

Finally, note that both autism and personality traits seem to be highly heritable. In other words, many of the people who are likely to become technological inventors and innovators (i.e., the people who are most likely to come up with ideas leading to technological invention and innovation) seem to be born that way. That would help explain why society can never know where inventive and innovative ideas will come from and why it is so difficult for today’s governments to design programs aimed at stimulating them. In fact, historically speaking, governments have not been much involved in the promotion of invention and innovation.

If anything, governments have actively discouraged invention and innovation in the past. Three Roman writers — Pliny the Elder, Petronius, and Dio Cassius — recorded similar anecdotes about a man who invented an unbreakable glass bowl and brought it to Emperor Tiberius in the hope of receiving a reward. Tiberius asked the inventor whether he had told anyone else about his invention. When the inventor said he had not, the emperor had him put to death, lest the unbreakable glass made precious metals (from which cups and bowls were made) valueless. Conversely, Emperor Vespasian gave a large reward to a man who had invented a machine capable of carrying heavy columns, but he feared that the machine would worsen Roman unemployment, so he declined to make use of it.

The historical record is replete with similar stories. Montesquieu criticized “mills for taking work away from agricultural workers,” wrote Fernand Braudel in his 1979 book Civilization and Capitalism. In 1754, the French ambassador to Holland asked for “a good mechanic who can steal the secret of the different mills and machines in Amsterdam that avoid the expenditure of the labor of many men,” Braudel noted, adding: “But was it desirable to reduce this expenditure? The mechanic was not sent.” And so on, ad infinitum.

In contrast to the ancient world, today’s governments understand the vital importance of innovation. Alas, they are not very good at promoting it. In 2003, the Organisation for Economic Co-operation and Development published a paper called “Sources of Economic Growth in OECD Countries,” which reviewed the drivers of economic growth between 1971 and 1998. The study found “no clear-cut relationship between public R&D activities and growth” and diplomatically suggested that “long-term sustainable economic growth has many sources and cannot be fully steered by policy-makers.” It is not impossible, Ridley wrote in How Innovation Works,

that governments can aim for, create and perfect an innovation of huge significance. . . . Nuclear weapons might be one example, moon shots another, though hardly ones with any consumer value, and both in practice used a lot of private-sector contractors. It is just that it does not happen very often, and that far more often inventions and discoveries emerge by serendipity and the exchange of ideas, and are pushed, pulled, moulded, transformed and brought to life by people acting as individuals, firms, markets and, yes, sometimes public servants.

It may be unsettling to realize that invention and innovation, to a large degree, depend on chance — a genetic mutation during meiosis. But that observation only reinforces the connection between population growth and higher standards of living. Genetic combinations leading to new inventions and innovations are much more likely to emerge in a population of, say, the 7.8 billion people who are alive today than they were in the population of 300 million who were alive at the time of Christ or Caesar Augustus.

And so, to maximize invention and innovation, we must not only reject the tightening restrictions on the behavior and speech of eccentric individuals; we must also combat the growing anti-natalist movement, which wants to restrict birth rates and sees the fecundity of our species primarily as a threat to the planet. But that’s a topic for another day.


This article originally appeared in National Review Online.

The Economist | Macroeconomic Environment

America Is in the Midst of an Extraordinary Startup Boom

“Last year applications to form businesses reached 5.5m, a record. Although they have slowed a touch this year, the monthly average is still about 80% higher than during the decade prior to covid, compared with just a 20% rise in Europe. Startups normally play an outsized role in creating employment in America, as elsewhere. By definition, every startup job counts as new, whereas mature companies have more churn. That difference has become even starker. In the four years before the pandemic, established firms added one net job for every four created by startups; in the four years since the pandemic, established firms have actually lost one job for every four created by startups.

Perhaps even more important than the numbers is the kind of ventures that are being created. In 2020 and 2021 many startups catered to the working-from-home revolution. These included online retailers, small trucking firms and landscapers. Since mid-2022, however, the baton has been passed to technology firms, according to Ryan Decker of the Fed and John Haltiwanger of the University of Maryland. A paper published in March by the Census Bureau found a particularly sharp increase last year in business applications based around artificial intelligence. For researchers, this carries echoes of the 1990s, when computers and the internet took off.”

From The Economist.

Blog Post | Economics

Javier Milei and the Future of Latin America | Podcast Highlights

Chelsea Follett interviews Daniel Raisbeck about the recent election of Javier Milei and what it means for the future of Argentina and the rest of Latin America.

Listen to the full podcast episode or read the full transcript here.

What are some of the most promising events in Latin America today?

Of course, the election of Javier Milei. He took office on December 10th, and it’s all quite encouraging. He had a large decree that repealed many laws and modified others to liberate the Argentine economy, which is currently one of the most regulated economies in the world.

It will depend, of course, on congress and the courts which can potentially block many of his initiatives. Here at Cato, my colleague Gabriel Calderon and I have focused on his main proposal: the dollarization of Argentina’s economy. In general, we think it’s a very good policy, but in that respect, I’ve been disappointed with the beginning of Milei’s government. We can discuss that further if you like.

First, let’s set the stage. Could you describe the situation in Argentina before Milei?

Well, the main problem was inflation, which was around 140 percent at the time of his election in November. And, of course, this is caused by the central bank. Argentina’s central bank is particularly irresponsible even within a Latin American context. Argentina also has one of the most regulated economies in the world. Forty percent of the population is living in poverty, and its economy hasn’t grown in over a decade.

This is especially sad because Argentina was incredibly successful in the 19th century. Its 1853 constitution was drafted based on the ideas of a classical liberal author called Juan Bautista Alberdi, who basically called for free trade, unrestricted industry, free immigration, and infrastructure to connect the country. And that’s what they did. It wasn’t immediate; it took a few decades, but from 1880 to 1916, you had this very successful export model that made Argentina into one of the richest countries in the world. Then, in 1916 and 1920, with everything that was happening in the world, nationalism took hold in Argentina and eventually morphed into Peronism, which is the standard, prototypical Latin American corporatist ideology. There has been a very clear decline ever since.

Could you talk more about Milei’s political beliefs?

Milei describes himself as a classical liberal or a libertarian and even as an anarcho-capitalist. He was actually trained as a neoclassical economist, but he relatively recently became an adherent of the Austrian School. And he’s been very open about it. He has never tried to soften his stances to appease some section of the electorate. He is also very talented at explaining economic concepts like the causes of inflation or the effects of regulation in a way that the public can understand.

Can you talk a little bit about the classical liberal tradition in Argentina?

Argentina has many classical liberal economists. At a per capita level, it’s probably the highest percentage in Latin America. They also have a long tradition of think tanks beginning in the 1950s. One particular think tank was started by a gentleman called Alberto Benegas Lynch, who corresponded with Ludwig von Mises and Friedrich Hayek. So, Argentina has a rich intellectual tradition in the Austrian School.

You mentioned dollarization. Could you talk more about this policy?

Dollarization means granting the US dollar legal tender or at least getting rid of exclusive legal tender for a national currency. Panama was born dollarized in 1904, and more recently, Ecuador dollarized in 2000 amid a crisis similar to what Argentina is facing now. El Salvador dollarized in 2001 after facing a similar crisis the previous decade.

When you dollarize, you end up with inflation levels akin to those of the United States. That might seem high from a US perspective after the last few years, but when you have 140 percent inflation in Argentina, 7 or 8 percent isn’t so bad. And even with all the problems with the US Federal Reserve, when you compare that to other countries, the dollar is a good option. By taking away the power of local politicians to interfere in the monetary sphere, you get rid of a huge problem. Now, that doesn’t solve all other problems. The governments can still run deficits and have debt problems. But when you have dollarization, those debt problems don’t really affect the private sector and regular citizens. Whereas with a national currency, a debt crisis usually leads to the deterioration of the currency and a loss in purchasing power.

Maintaining that purchasing power is why nobody is thinking about dedollarizing in these countries. Even in Ecuador, when the left-wing strongman Rafael Correa was at the peak of his power and popularity, with 60 percent or above in approval ratings, the dollar was always more popular than he was. That’s also why we think it’s important for Milei to dollarize and dollarize quickly. If the Peronists come back to power, they could overturn a lot of his deregulatory measures, but dollarization would be very difficult for any future government to reverse.

How hopeful are you that he’ll be able to implement dollarization?

Milei had to join forces with former President Mauricio Macri’s party to win the election, and many people in that party do not favor dollarization. Luis Caputo, the person that Milei put in charge of the finance ministry, who was also one of Macri’s finance ministers, has previously spoken out against dollarization. More recently, he has taken the view that the fiscal issue is more important and that dollarization will be a consequence of stabilizing the economy.

Caputo’s plan involves liquefying the debt through inflation. But the thing with liquefying the government debt is that you’re also liquefying everyone’s savings and salary. So, it’s a bold and even dangerous alternative. I also think that dollarization involves a similar process because once the market realizes you’re serious about dollarizing, the obvious thing would be for inflation to begin to fall and for interest rates to come down, but without destroying purchasing power even more. And I think that would be the better scenario.

It’s not clear if this decision was made out of political necessity or if Milei actually believes in what Caputo is doing. Dollarization is a niche policy that only three small countries have accomplished. Even though it’s been terribly successful, especially in bringing down inflation, relatively few economists understand dollarization and how to bring it about.

What other policies has Milei proposed?

His decree and omnibus law aim to deregulate broad swaths of the Argentine economy. One example is they got rid of price controls for rents that dated back to the 1970s. Another one is the Open Skies policy, which allows airlines from abroad to enter the market and even control flights within the country. Previously, they had a scheme to undercut the low-cost airlines in favor of the national airline, which is heavily subsidized. Milei even said he is privatizing the national airline by handing it over to the workers and cutting subsidies. But there’s a wide scope of reforms. These are just some highlights.

Let’s talk about Latin America as a whole. What are some of the biggest obstacles to the region becoming more prosperous?

One that is not well known is the lack of trade within the region. There is a mostly common language and very similar institutions and historical backgrounds, so you would think Latin America is an ideal region for trade. But trading between countries is very difficult. It’s also very difficult to migrate from one Latin American country to another. For instance, Colombia, where I’m from, restricts how many foreigners companies can hire. And this is standard across the region.

Another major problem is that there hasn’t been a very strong classical liberal element in Latin American politics. In the Anglosphere, you had Thatcherism and Reaganism and these types of movements, but the Latin American right has traditionally been very protectionist and corporatist. A right-wing government in Latin America, especially after the era of military dictatorships, might not bring about a humanitarian collapse like in Venezuela, but at the same time, these governments don’t allow their economies to grow. And, of course, if you don’t grow, you won’t be able to lift people out of poverty. That’s the big problem in Latin America: anemic economic growth. And it’s a question of how conscious people are that you need freedom to have that economic growth.

So that’s also why Milei is interesting. He is, of course, breaking from the leftist model but also from the crony capitalist, protectionist, and interventionist right.

We usually try to end on a positive note. What are you the most optimistic about concerning the region’s future?

I’m not going to be terribly original here, but five years ago, if someone had told me that, in a few years, there would be an openly libertarian or anarcho-capitalist president of Argentina, I wouldn’t have believed them. And this is where we are. And I think the lesson is that sometimes it might seem very difficult to enact freedom-oriented reforms, but it can be done. It is being done now. And it’s being done by someone who was very radical in his approach. He wasn’t moderating his principles to convince centrists. He was straightforward. And I think that’s a very positive example to follow.

The Human Progress Podcast | Ep. 46

Daniel Raisbeck: Javier Milei and the Future of Latin America

Daniel Raisbeck, a policy analyst on Latin America at the Cato Institute’s Center for Global Liberty and Prosperity, joins Chelsea Follett to discuss the recent election of Javier Milei and what it means for the future of Argentina and the rest of Latin America.

Blog Post | Economic Freedom

Xiaogang: How a Village Went Forward While China Went Back

Mao’s “Great Leap Forward” caused widespread famines. The small village of Xiaogang had suffered enough under communist principles, so residents decided to implement private property—and the results of this experiment changed the whole nation of China.

Summary: In 1981, 88 percent of the Chinese population lived in extreme poverty, but today that figure is less than one percent. This progress can in large part be traced back to the small rural village of Xiaogang, where, in 1978, local farmers defied state policies in favor of market-oriented reforms involving the rise of private property, setting the stage for China’s broader economic liberalization and rapid growth into a powerhouse.


In 1981, 88 percent of the Chinese population lived in extreme poverty. Today, this figure is less than one percent. In a country composed of nearly 1.5 billion people, that means hundreds of millions of people became more prosperous than ever over about four decades—hardly any time at all compared to China’s 3,500-year history.

Classical liberals and libertarians have observed throughout history that cities are disproportionately the centers of technological and economic development. However, for every rule, there is an exception. The rural village of Xiaogang in China, though small, is that exception: one that transformed not only China’s economy but, inadvertently, the whole globe’s.

The Great Leap Forward and Mass Starvation

A devout advocate of communism, Mao Zedong implemented a state-​run economy. Bureaucrats decided what workers produced, who to hire or lay off, how much to invest, and what workers were paid. State-​owned enterprises, where the only “enterprise” to be found was in the name, were dead weight on the economy and chronically underperformed.

Some opposed the Soviet-​style model of economic planning being implemented in China, such as Gu Zhun and Sun Yefang. In 1956, Gu argued for the importance of the market even in a socialist economy. For his writings, he was denounced as a “rightist” and spent most of his remaining life behind bars or in re-​education centers. Sun observed that state-​owned enterprises lacked autonomy, they could not adapt to local circumstances. For his ideas, Sun was labeled a “revisionist” and was imprisoned for seven years during the Cultural Revolution.

Though behind bars, the observations of Gu and Sun proved prophetic after the disastrous policies of Mao’s infamous Great Leap Forward.

The Great Leap Forward was a large-​scale social and economic campaign initiated by the Chinese Communist Party in 1958 to rapidly transform China from an agrarian to a socialist society through industrialization and subsequent collectivization. The chronic underfunding of agriculture and the glaring inefficiency of collectivization led to critical declines in food production. Historians estimate tens of millions died from starvation through mismanagement by the state during this period.

After the death of Mao Zedong in 1976, fervor for a state-​run, collectivized economy fizzled. By December of 1978, the Third Plenary Session of the 11th Central Committee of the Communist Party of China (CPC) was held in Beijing, an event recognized as the beginning of China’s economic reforms and the opening up of its economy. The ensuing market liberalization propelled China from a stagnant socialist society to a dynamic economic powerhouse that has since shocked the globe.

But before politicians in Beijing relaxed their grip on the economy, large parts of rural China had been ignoring state policy for years. Xiaogang’s villagers drafted the blueprints for China’s meteoric rise.

Xiaogang Goes Rogue

The Great Leap Forward and misguided collectivist policies had the worst impact on provinces like Anhui. In the winter of 1978, in the province of Anhui, the impoverished villagers of Xiaogang gathered together for a group meeting about their future survival. Recent harvests under collectivization were yielding worse and worse results. The villagers decided that rather than farming as a collective, each family would tend to their own plot of land, keeping the fruits of their labor.

Eighteen heads of households signed a document that formalized some simple rules. Each signatory took an oath of silence and pledged to look after one another’s children if anyone was killed or arrested for breaking collectivist policy. The document was hidden inside a piece of bamboo on the roof of a farmhouse.

With villagers now autonomous, and responsible for their individual profits and losses, Xiaogang quickly became successful, producing a greatly increased crop only a year after the secret agreement was made. Understanding the plight of farmers, local state officials stayed quiet and allowed Xiaogang to continue. Though kept a secret, the example of Xiaogang spread, and other villages encountered similar successes. The peripheries of China were experimenting with the cornerstone of the future market economy: private property.

While the state stalled, real change occurred where state control was weakest. On the margins of China, a series of quiet revolutions paved the way for markets to flourish. Before politicians in Beijing relaxed bans on private farming, farmers had already adopted the practice throughout rural China, especially Anhui. Private property proved to be an economic tonic worth every drop. State officials began to notice marked improvements from what were formerly the poorest areas. The Chinese government softened its policy, admitting that markets and private property would be necessary to a prosperous, modernized China.

China’s Future

The Third Plenary Session which reformed the Chinese economy is now recognized as a pivotal turning point in China’s economic miracle. It was influenced by the example of a small group of farmers. Over the following three decades, the world’s most populous country transformed from a poor, stagnant, socialist economy into an economic powerhouse. Villages like Xiaogang rediscovered the benefits of private property. Farmers could make their own decisions and for the first time in decades their potential was unleashed.

The turn to private property and individual responsibility in the midst of Mao’s disastrous experiments in collectivism was not inconsistent with aspects of Chinese tradition. In the Tao Te Ching, the 5th century BC philosopher Laozi argued the state should rarely interfere with people’s lives, writing, “Governing a large country is like frying a small fish. You spoil it with too much poking.” Mencius, a student of Confucius, believed in free trade, and when describing a well-​run state to King Hsüan of Qi, he explained that good kings kept taxes low, promoted trade, and raised no tariffs or levies on goods. The 17th-​century scholar Huang Xongxi advocated for a constitutional system with a separation of powers and strong protections on private property. The Chinese people are by no means innately collectivist.

Xiaogang is evidence that prosperity does not come from state action, but rather arises out of the humble efforts of everyday people to make the world a better place. World history is shaped by great political leaders and powers but Xiaogang also shows us how unlikely people can find themselves at the head of a quiet revolution.

Though private property is no longer illegal, China is nowhere near being a liberal society. China tragically remains an authoritarian country. But when a country of over a billion people leans towards the market, the entire globe feels its weight shift. China did not become a laissez faire society overnight, powerful barriers to liberty remain. The Third Plenary Session did not plan for a “Great Leap” to capitalism, only a small step—but there is no step towards liberty too small to be celebrated and applauded.

This article was originally published at Libertarianism.org on 11/17/2023.