Individual Freedom and Creativity: Hayek, Schumpeter, North, and the Economics of Belonging

This book develops a new theoretical framework to understand economic development by integrating the roles of individual freedom, creativity, markets, innovation, institutions, and social structure. It revisits and critically evaluates the contributions of Friedrich Hayek, Joseph Schumpeter, and Douglass North, identifying a shared limitation: an individualistic ontology that treats economic agents as isolated actors. The work is structured around three central empirical questions: (1) the success of Western economies compared to the failure of the Soviet Union; (2) the success of certain Asian economies compared to the stagnation of Latin America; and (3) the structural similarities between successful and unsuccessful development paths. The book introduces the Economics of Belonging, grounded in the ontological proposition that to be is to belong. Within this framework, individual creativity is understood as emerging within systems of social and institutional integration rather than in isolation. Economic outcomes are explained as the result of the interaction between participation capacity, institutional openness, social integration, and middle-class dynamics. The manuscript combines theoretical analysis, formal modeling (including the belonging function and the θ–ε model of creativity), and comparative empirical analysis of Western, Soviet Union, Asian, and Latin American development. It provides a unified explanation of growth, stagnation, and structural divergence across regions. This work is intended for scholars in development economics, institutional economics, political economy, and philosophy of economics, as well as for policymakers interested in long-term development strategies.