Commencement season is now underway, and President Barack Obama recently had the honor of speaking at Howard University. His speech touched on a variety of topics, including the troubling trend of colleges canceling speakers that some students and faculty find offensive. The president is right that people should engage with one another on the battlefield of ideas rather than try to silence those with whom they disagree. As many people have pointed out, this engagement is important for a well-functioning democracy. But what people may not realize is that it's critical for a well-functioning economy as well.

New ideas and innovation are necessary for sustaining economic growth, and there's a large body of evidence that emphasizes the exchange of ideas as an important component of an innovative economy. The United States has been especially successful at fostering innovation and growth in the technology sector. Facebook's market capitalization alone is twice the size of all the large European tech giants combined. There's good reason to believe that America's economic prosperity in this rapidly changing sector is due to its commitment to the free exchange of ideas.

The theory that ideas and innovation are crucial to economic growth is an old one. Joseph Schumpeter's "creative destruction" is perhaps the best known explanation of the role that innovation plays in the economy. Schumpeter explained that competition requires firms to constantly innovate, since those that don't will quickly be replaced by those that do. Ultimately micro-level creative destruction helps drive macro-level economic growth.

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