Why Innovation Requires Economic Freedom

Why Innovation Requires Economic Freedom

Aaron Tao
Aaron Tao
4 min read

Recently, I read a review of a new book, Lysenko’s Ghost: Epigenetics and Russia, by MIT science historian Loren Graham. The book surveyed Lysenko’s scientific legacy and “whether new developments in molecular biology validate his claims.” (Spoiler: They do not). Having studied evolutionary biology as an undergraduate, I was familiar with the story of Lysenkoism, a tragic episode of politicized science in the Soviet Union. For those who don’t know this history, a Soviet biologist named Trofim Lysenko explicitly rejected Mendelian genetics in favor of a pseudoscientific hypothesis propagated by Jean-Baptiste Lamarck. Here’s a brief summary of Lysenko’s career as described in the MIT Technology Review:

He rose to immense power in the 1940s under Joseph Stalin by promoting a number of erroneous scientific techniques he claimed could increase wheat yields on famine-wracked collective farms. Among other things, he professed that by keeping seeds of winter wheat at low temperatures for longer than usual, he could convert the strain to a variety that would mature in the spring. When other scientists objected to his work, he attacked them in ways Graham calls “lethal and passive-aggressive,” pointing them out to the secret police and letting the wheels of Stalinist “justice” do the rest.

Because of its emphasis on the heritability of acquired characteristics, Lysenkoism found itself at home and became an official dogma of Communist ideology, which believed human nature itself can be transformed to create the “New Socialist Man.” In the zeal to completely remake society, legitimate scientific research and other creative pursuits were forcibly suppressed. To what extent Lysenkoism exacerbated Russia’s crop failures and contributed to famine remain debated, but it is painfully clear that Marxist-Leninist ideology inspired the disastrous collectivization campaigns responsible for vast human suffering and poverty.

Although my family was not from the Soviet Union, they did have first-hand experience with life in Mao’s Communist China. Like so many other immigrants, my family found freedom and economic success in the United States. Growing up, I was moved by the stories I’ve heard and was grateful that the decisions my parents made spared me from the worst. Their struggles and sacrifices certainly played a role in my own intellectual development towards supporting individual rights, free enterprise, and an open society. As both a science enthusiast and civil libertarian, the story of Lysenkoism troubles me deeply on a personal level.

I always appreciate the efforts of scholars and other intrepid individuals to uncover truths that get suppressed or censored by political ideology. Modern day behavioral research shows that corrupt institutions and societies encourage lying, fraud, and dishonesty among ordinary citizens. Therefore, there should be no surprise that authoritarian political systems displace and destroy civil society, and with it, scientific inquiry, technological progress, and economic prosperity.

Russia is an especially interesting case. Although biology and genetics were set back decades thanks to Lysenkoism, other fields of science and engineering saw major advances. For example, Russian scientists were the first to invent lasers, do early pioneering work on computers, and even came up with the idea of fracking. In a revealing interview with the Boston Globe, Professor Graham mentions these fascinating stories but points out that despite the genius of its scientists and inventors, Russia was mostly unable to “translate ideas into commercial products” to benefit its citizens. Graham believes this failure to be the result of political institutional differences between the United States and Russia which also extended to cultural attitudes towards business and entrepreneurship:

One of the characteristics of American culture is that successful entrepreneurs become almost cult figures—I mean, Steve Jobs, Thomas Edison, Bill Gates. These people are held up in popular culture as role models, and they have almost iconic status. There’s no one like that in Russia.

In a separate article provocatively titled “Russia is great at invention, but stinks at innovation,” Graham elaborates upon the reasons behind this striking phenomenon:

Why are Russians so good at the development of scientific and technological ideas and so miserable at gaining economic benefit from those ideas? The answer is not the lack of talent or ability of their scientists or engineers; it is their failure to develop a society in which the brilliance of its citizens can find fulfillment in economic development. All the rulers of Russia, from Peter the Great to Vladimir Putin, have believed that the answer to the problems of modernization is technology itself, rather than the societal environment which promotes the development and commercialization of technology.

What kind of “societal environment” is best suited towards fostering innovation, harnessing creativity, and supporting wealth creation? The answer is almost self-evident:

A democratic form of government, a free-market economy with investors seeking new technology, protection of intellectual property, control over corruption and crime, a legal system in which the accused has a chance of being declared innocent, a culture that tolerates criticism and allows independence, a willingness to learn from failure in order to try again — these are some of the intangible characteristics of an innovative society.

Graham’s unique insights as a science historian are shared by development economists. In Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development, economist Benjamin Powell assembled a series of case studies highlighting countries that managed to lift themselves out of poverty. Countries as varied as Hong Kong, Singapore, New Zealand, and Botswana that experienced dramatic economic growth and prosperity all shared the following practices and institutions: private property rights, the rule of law, low costs of market entry, and trade liberalization. All of these variables are critical components for an economically free environment that encourages entrepreneurship and wealth creation.

In sum, if there are no sound institutions in place, namely private property rights and the rule of law, economic prosperity is virtually impossible to achieve no matter how many brilliant people and natural resources your country has. When Russia is compared with other countries that embraced economic freedom , the stark contrast is glaring. For those of us who promote and defend a free society, these poignant lessons from science, history, and economics are instructive and should remind us of what is at stake. Reflecting upon his life under authoritarianism, former Russian chess champion and current human rights activist Garry Kasparov said it best: “Innovation requires freedom of thought, freedom of capital, and people who believe in changing the world.”


Aaron Tao is a writer and graduate student at the McCombs School of Business at the University of Texas at Austin. Follow him on Twitter: @AaronTao2

Science / Tech

Aaron Tao

Aaron Tao is a writer and graduate student at the McCombs School of Business at the University of Texas at Austin.