The humanomics underpinning free market productivity: synthesizing insights from social philosophy, systems thinking, and neuroeconomics

Why do free markets at the macroeconomic level perform better than command and control economies over time? Similarly, why do more open, less rigid hierarchal organizational systems at the microeconomic level, generate higher levels of productivity over the long term? Systems thinker Russ Ackhoff asserted that if you want to know how something works, you analyze. However, if you want to know why something works you synthesize. As we shall explore in this paper, Max U-based analyses adopted in traditional neoclassical (Samuelsonian) economics are useful for helping us explain how markets work but not necessarily why. The purpose of this article is: (1) to synthesize insights from humanomics, neuroeconomics, and systems thinking to explore why free markets at the macroeconomic level and more open, less hierarchal organizational systems at the microeconomic level, allow human ingenuity and creativity to flourish and (2) to apply those insights to exploring how we can improve communication and cooperation in boundaryless systems such as the global economy or virtual organizations that operate within it. This article is part of a project that was organized by a group of Public Choice scholars who are committed to the rigorous study of free markets and how their operations might be enhanced at the margin. JEL: A13, B53, D83.