If you want to get something done, ask a busy person — or, job lock is a good thing for innovation

obama-doctor-needleObamacare is the gift that just keeps giving . . . if you want to prove to Americans that Leftism works only on paper and, even then, only if you lie about the numbers.  We’ve already had proven that you can’t keep your insurance, you can’t keep your doctor, you can’t keep your hospital, and you can’t keep your money.  The past weeks have also revealed that you can’t keep your job.

The Democrats have tried to spin this last point by saying that people will be freed of the drudgery of work and suddenly have time to innovate.  In fact, according to studies of people who were given that time to innovate (start businesses, invent things, etc.), the sudden time freedom made no difference:

More importantly, a thorough review of the available literature done by the RAND Corporation in 2010 concluded “On net, there appears to be little consensus in this literature on the existence or magnitude of the effect of health insurance on business creation.” To be sure, the same RAND report provides a new empirical analysis suggesting “that “entrepreneurship lock” for men is just over 1 percentage point relative to an annual base business creation rate of 3 percent.” But one way or the other, all these various studies represent efforts to infer the number of “entrepreneur-locked” individuals in the U.S.

Far more convincing is evidence of what happens after the introduction of universal or near-universal health coverage. For example, our OECD competitors all have had national health systems for decades.  Yet Edward Prescott, co-winner of the 2004 Nobel Prize in Economics, has observed that “entrepreneurship is much lower in Europe.” If universal health coverage truly had a demonstrable impact on individual willingness to take risks, this disparity seems counterintuitive. Admittedly, there are many other factors such as tax and regulatory policy that might affect these cross-national comparisons. So the most convincing evidence comes from the first empirical study ever to explore the actual impact of the a shift to universal coverage on entrepreneurship. This study of the Massachusetts health reform (“Romneycare” after which Obamacare was purportedly modeled) found the following:

The author finds significant and persistent suppression of new organization formation when controlling for organization size, sector and owner gender, and limited evidence of geographic displacement of firms across the New Hampshire border. While theory suggests mandatory insurance should reduce insurance costs and improve worker productivity, the author finds that the regulation has no significant impact on worker productivity and limited evidence of increases in insurance costs, and estimates the expected cost in terms of lost employment, sales to the local economy and tax revenue to in the majority of cases exceed the benefit.

Judging by my own life, this data doesn’t surprise me at all.  When vistas of free time open before me, I don’t innovate, I become inert.  More significantly, my brain slows down.  While I, as a busy person, can get 10 chores done in a day, as an un-busy person, I’m lucky if I get 2 or 3 chores done.  My flywheel has stopped spinning and I find it difficult to marshal the energy needed to overcome the inertia and get that flywheel spinning again.  It’s entirely true that, if you want to get something done, you should ask a busy person.

Moreover, if you want to build a better mousetrap, you should probably ask a busy person about that too.  It’s the busy person who has an incentive to simplify tasks.  It’s a busy person who engages with the world in a way that sows and fertilizes ideas in his mind.  It’s also a busy person who dreams of leisure and takes affirmative steps to create sufficient wealth to bring that leisure time about.  Enforced leisure lacks all of those incentives.  After all, if enforced leisure went hand in hand with creativity and innovation, Europe’s once-thriving cradle to crave welfare states would have resulted in the most dynamic economies in history, rather than in economic basket cases.

It’s true that there have always been people who, because of their great wealth, were able to indulge their passions in ways that benefit the world.  Reading about these people, though, one senses that they were so driven that, no matter their station in life, they would have affected the world around them.  Florence Nightingale, for example, had a calling that would actually have been easier for her to pursue if she hadn’t come from a fabulously wealthy, upper-class family.  Most inventions, though, come from busy people trying to figure out a better way (Henry Ford, Thomas Edison, John Rockefeller) or from people who were in a line of work that let their brain float freely to another line (Albert Einstein).

This is a sort of random, ill-thought-out post.  I’m confident in my core idea, but I’m not expressing it as well as I ought — probably because of the stultification of being couch-bound for so many days now.  Please chime in to support or oppose my ragged thoughts.

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  1. Libby says

    Many of us have seen this in action at work. I have worked for several start-up companies, and in this environment, there is a need to produce the best possible product/service within the given (short) amount of time in order to keep the business afloat. The idea being that it’s better to get something out that meets some of our customer’s needs now than take much more time and resources to produce the perfect product/service later. Subsequent releases will address other needs, which cumulatively result in the (most) perfect product possible. This environment also has minimal administrative bloat and management (and managers contribute, not just supervise others). This is how I’ve seen a lot of innovation take place – under pressure, with realistic goals, and everyone pitching wherever they can to get it done in order to survive another year.
    On the other hand, the one unsuccessful start-up for which I’ve worked had a stunning amount of venture capital, which it proceeded to waste in a variety of ways over many years before going “live” (I imagine business schools them as a case study in total failure). With all that money & time (and no actual customer sponsoring a product that would meet his particular needs) they were free to pursue all sorts of silly ideas and ended up producing a suite of product and services that only a few people wanted. Come to think of it, this seems quite similar to the Obamacare website/state exchange roll-out last fall.

  2. JKB says

    The busy person gains more from the savings the innovation creates.  Perhaps to do other things, or perhaps, they do the task repeatedly so that a tiny improvement has a cumulative return.  It hardly makes sense to spend the time require to develop a specialized tool or technique if it is only going to save you a small amount of time on a one-off task.  But if you are going to do that task a lot, it has great value.   The same in innovating the saving of a penny per unit.  
    In addition, being busy, you are more likely to encounter more “problems” to solve.  As Paul Graham has written, the key to entrepreneurship is to find a problem to solve.  Sometimes the solution is just for your small area, but it turns out others find it useful.  See the Khan Academy.  Even if you are busy on a repetitive task, you are more likely to develop the expertise to see the problems.   Just have to keep the desire to make your problems go away in a conscientious    manner.
    One problem with time-on-your-hands innovation is the conditioning inherent in our schooling.  The education ruins most children for open-minded thinking by 3rd grade.  And for acting independent of authority approval soon after that.  Some come thru or recover from the conditioning but most do not.  
    Everyone’s probably seen those commercials with the guy sitting asking questions of kindergarteners, who answer in amusing but often innovative ways?  Why don’t they use 3rd graders?  Why is the 5ht grader known for his regurgitation of random knowledge instead of innovative answers?  What is the difference in what happens if you leave 6-yr olds with unstructured time compared to 12-yr olds?  What has happened to those kids in the intervening 6 years?

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