[...] The researchers collected information on 90 countries, including far-off lands from the U.S. to New Zealand and Colombia to Kazakhstan. They also collected data on the country’s excellence in science and technology—the number of patents granted per person and how many Nobel Prizes the country’s people had won in science, for example.Richard Lynn and Tatu Vanhanen's study IQ and the Wealth of Nations (deemed "controversial" by Wikipedia) has been disputed, so this study provides some confirmatory evidence. Furthermore, the fact that higher IQ had an even greater effect on GDP when considering only the smartest 5% gives credence to La Griffe du Lion's smart fraction theory.
They found that intelligence made a difference in gross domestic product. For each one-point increase in a country’s average IQ, the per capita GDP was $229 higher. It made an even bigger difference if the smartest 5 percent of the population got smarter; for every additional IQ point in that group, a country’s per capita GDP was $468 higher.
“Within a society, the level of the most intelligent people is important for economic productivity,” Rindermann says. He thinks that’s because “they are relevant for technological progress, for innovation, for leading a nation, for leading organizations, as entrepreneurs, and so on.” Since Adam Smith, many economists have assumed that the main thing you need for a strong economy is a government that stays out of the way. “I think in the modern economy, human capital and cognitive ability are more important than economic freedom,” Rindermann says.
[Adventures in Reaction]
Wednesday, June 29, 2011
Are the Wealthiest Countries the Smartest Countries?
From the Department of Duh: Are the Wealthiest Countries the Smartest Countries? (Link thanks to Malcolm Pollack.)
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"'I think in the modern economy, human capital and cognitive ability are more important than economic freedom,' Rindermann says."
ReplyDeleteThis is an artifact of restriction of range--most countries have comparable levels of economic freedom nowadays. A cursory look at the outliers, like North Korea, suggests that Rindermann should be more careful in stating his conclusions.
The problem with this though is that Israel, for instance, with an IQ of 94 is fairly wealthy and has an incredible tech sector, and Asian countries tend to be poorer than Western countries despite being, on the whole, smarter.
ReplyDeleteEither average IQ of a country obscures certain complexities, for instance in the case of Israel the top cognitive tier, while small, is made up of brilliantly intelligent Ashkenazi Jews with entrepreneurial personalities, and in the case of Asian countries the high IQ masks a low a verbal IQ which in some unproven way is crucial for great economic success, or the link between IQ and wealth is more complex itself (it is one element but not the crucial one)
"An aging Western nation, not thought of as being on the vanguard of high technology right now, without an abundance of natural resources, in the midst of an existential crisis all around it, just keeps cranking out the jobs."
ReplyDeleteRead more: http://www.businessinsider.com/june-unemployment-in-germany-2011-6#ixzz1QlNqozQi
Good points, Dog of Justice and Anon.
ReplyDeleteThese are not separable factors. Without economic freedom, intelligence is useless.
To be innovative and entrepreneurially successful requires both liberty and intelligence. They are complements.
Culture and other factors matter too. Intelligence may be in part a marker of sociability and cooperativeness, both of which are extremely important in business.
The problem with this though is that Israel, for instance, with an IQ of 94 is fairly wealthy and has an incredible tech sector
ReplyDeleteIsrael has significant populations of Arabs and Oriental Jews, which drags down the average IQ. I imagine that the Israeli tech industry, in contrast, is largely made up of smarter European Jews. That would be consistent with the paper's idea that the smartest people have an outsized effect on national wealth.
I also wouldn't take the 94 IQ estimate as gospel. IQ and the Wealth of Nations has been criticized for shoddy research, see for example:
http://dienekes.blogspot.com/2006/09/more-massaged-data-from-richard-lynn.html
Wealth changes on much faster timescales than IQ. In a single generation GDP per capita can increase by 8x, whereas IQ might go up by at most some fraction of an SD (due to Flynn Effect, although genetics will be almost unchanged).
ReplyDeleteSo it's obvious that the relationship between wealth and IQ is dynamic. If you come to some conclusion at a particular moment in time (e.g., Asians underperform their IQ), then you better check the historical record to see whether you are being fooled by special circumstances (Asia recovering from disastrous last couple hundred of years). In fact, if you look over the last 2-3k years you'll find that Asia was the economic center of the world for most of that period.
This trivial observation is just a bit too difficult for people like La Griffe to understand. Rindermann, however, does seem to get it (at least judging from some comments in his papers).
"The problem with this though is that Israel, for instance, with an IQ of 94 is fairly wealthy and has an incredible tech sector, and Asian countries tend to be poorer than Western countries despite being, on the whole, smarter. "
ReplyDeleteAsian countries are smarter? A select few are, and almost all of them are as wealthy as the West. Except the countries with currently or formerly communist governments... which they are now recovering from and growing rapidly.
Wealth changes on much faster timescales than IQ. In a single generation GDP per capita can increase by 8x, whereas IQ might go up by at most some fraction of an SD (due to Flynn Effect, although genetics will be almost unchanged)...This trivial observation is just a bit too difficult for people like La Griffe to understand.
ReplyDeleteExactly correct. The whole IQ=Wealth theorizing is basically ludicrous for precisely this sort of reason. And the counterexamples aren't exactly trivial, since they include essentially all the major countries of East Asia, which contain roughly 2 billion people. Does anyone really believe that the intelligence levels of the Japanese, the Chinese, and the Koreans rose enormously over just a few decades?
Since East Asia now contains roughly 1/4 of the world's population and approaching 1/2 of the world's economic production, if you discard the East Asian datapoints as "outliers", you've essentially thrown away a very sizable fraction of all your empirical evidence in order to support your model, and turned yourself into a scientific laughingstock.
Now it's obviously true that some people are smarter and more orderly than other people, for all sorts of different reasons. And it's also obviously true that smarter and more orderly people tend to be more economically productive, all other things being equal. But that's a very long distance from the sort of sweeping theories advanced by the more foolish IQists.
@RKU
ReplyDeleteSlight nitpicking here, but the population of East Asia is more like 1.55 billion or so. It's almost certainly under 1.6 billion. I define East Asia to be China, Taiwan, Hong Kong, Japan, North and South Korea.
Yan Shen: Slight nitpicking here, but the population of East Asia is more like 1.55 billion or so. It's almost certainly under 1.6 billion. I define East Asia to be China, Taiwan, Hong Kong, Japan, North and South Korea.
ReplyDeleteYes, that's probably the more standard definition. I was actually thinking of a somewhat more expansive group, which might include some of the geographical "borderline cases" such as Vietnam, Indonesia, Malaysia, and perhaps even the Philippines, thereby bringing the total up to the 2B or so. Most of these countries obviously haven't had as strong sustained GDP growth rates (let alone technological advancement) as Japan/China/Korea but still every respectable ones by world standards, leading to a huge rise in per capita GDP in a relatively short timeframe.
"the fact that higher IQ had an even greater effect on GDP when considering only the smartest 5% gives credence to La Griffe du Lion's smart fraction theory."
ReplyDeleteI think that would depend on their loyalty to the nation as a whole. If a large part of your smart fraction were entirely disloyal to the nation as a whole then they'd suck out and then either hoard or transplant the nation's capital like a vampire sucking out blood. In small numbers it wouldn't matter but if there were too many your nation's economy would basically be doomed. They'd be like Japanese knotweed.
http://en.wikipedia.org/wiki/Japanese_knotweed
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"and Asian countries tend to be poorer than Western countries despite being, on the whole, smarter."
I don't think that's remotely true. It's the northern lattitudes and their outposts that are smart. Top 10% immigration from other places clouds this somewhat imo.
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I'd say a combination of average IQ and level of co-operativeness sets the long-term indigenous limit of per-capita GDP.
It can be dragged down by things like communism.
It can be temporarily super-charged by massive injections of foreign capital.
It can be increased above its limit long-term by long-term injections of foreign capital and expertise.
@RKU
ReplyDeleteCountries like Vietnam, Malaysia, etc are almost certainly better classified as Southeast Asian.
There are almost 30 million overseas Chinese in Southeast Asia. From what I've read, there is actually a decent correlation in Southeast Asia between the percentage of Chinese living in a country and its per capita GDP. Singapore is the obvious example, being one of the wealthiest nations in the world. Almost 80% of its population in Chinese. I don't think it's a surprise that, ignoring tiny Brunei with its huge oil and natural gas reserves, that the country with the next highest per capita GDP is Malaysia, which has a 25% Chinese population, or thereabouts. So it's actually not unreasonable to attribute the economic development of certain Southeast Asians to a rapid change in the gene pool over the past few decades or generations, because of a substantial increase in Chinese immigrants.
Now, it's fairly obvious that IQ is one of the major factors determining national wealth, but as we can tell from certain countries, not the only one. If you're a nation like China and have been devastated by a few decades of Communist rule, you can certainly end up being fairly poor despite the relative abundance of cognitive capital. On the other hand, the 10% average annual growth that the Chinese have had, in contrast to say the economic stagnation of countries in Africa which were on equal footing with China economically when China finally opened up under Deng in 1978, can probably be attributed in large part to IQ.
I suspect that the correlation between IQ and wealth will only strengthen over time, as other salient factors become increasingly equalized.
Yan Shen: Countries like Vietnam, Malaysia, etc are almost certainly better classified as Southeast Asian.
ReplyDeleteYes, it's partly a matter of somewhat vague and overlapping geographical definitions. When I see "Southeast Asia" I automatically think of Vietnam and perhaps Malaysia. So it comes down to whether the countries of "Southeast Asian" are also considered part of "East Asia", which doesn't really have a precise answer. As an analogy, when I see "Northeast Asia," I automatically think of Korea and perhaps Mongolia, yet most people would classify Korea as also being part of "East Asia."
Certainly the presense of substantial or large ethnic Chinese minorities in many of the S-E Asian countries has been an important factor in their economic growth, but I think e.g. Vietnam has been doing pretty well the last decade or two even though most of the Chinese were driven out after the end of the Vietnam War (though obviously the Vietnamese are closely related genetically and culturally to Southern Chinese). Looking at the other side of the world, I think Turkey has had one of the best recent economic growth rates in Europe (that is, if you consider Turkey part of Europe), despite all sorts of racial/cultural factors which would probably have caused WNs, HBDers, or IQists to predict the exact opposite. So the relationship is a pretty complex one.
My own view is that after an extended periods of time for social/cultural/political factors to gradually sort themselves out, probably the smarter and more orderly a people, the higher its economic productivity. I'd think a good analogy would be that taller people generally play basketball better than shorter people, though this can be totally swamped by e.g. lack of training. But if we exclude social factors, the correlation between height and basketball ability isn't anything close to unity.
@RKU
ReplyDeleteI'm not familiar with recent growth rates in Vietnam, but certainly countries starting from an extremely low base can accumulate an early period of rapid growth largely by picking the low hanging fruit. Perhaps this can partly account for Turkey's superior rate of growth relative to other European nations in the recent years?
Regarding the Vietnamese, you yourself alluded to closer genetic similarity with Southern Chinese. My superficial understanding has been that the Vietnamese are somewhat of a hybrid between East Asians and Southeast Asians. So if Vietnam indeed stands out amongst the other non-Chinese dominated countries of Southeast Asia, wouldn't that lend more credence to Rindermann's hypothesis?
Now I don't have any evidence to back this up, but I'd surmise that a few decades from now, once East Asia has basically fully modernized, you'll end up finding a fairly high correlation between wealth and IQ once you account for the remaining salient factors, such as the presence of natural resources, etc. Indeed, without oil, many of the Middle Eastern nations today would surely be worse off economically.
Yan Shen: Now I don't have any evidence to back this up, but I'd surmise that a few decades from now, once East Asia has basically fully modernized, you'll end up finding a fairly high correlation between wealth and IQ once you account for the remaining salient factors, such as the presence of natural resources, etc. Indeed, without oil, many of the Middle Eastern nations today would surely be worse off economically.
ReplyDeleteYes, that certainly seems like the most likely scenario. In fact, one of the most astonishing economic claims I've seen somewhere is that on a purchasing-power-adjusted basis, China might actually have a numerically larger *middle class* than the U.S. within another decade or so (though obviously much smaller proportionately).
However, while "intelligence" is clearly very important in economic productivity, I think there's overwhelming evidence from Lynn's accumulated data that IQ is a very noisy and unreliable measure of intelligence, often being massively depressed due to apparent cultural/socio-economic/rural/educational factors. I think that's the only possible conclusion which one can draw from the enormous IQ dispersion in Lynn's numbers between groups which are genetically indistinguishable, hence almost certainly of similar innate "intelligence."
And economic productivity can also be swamped by other factors, notably Communism. But in a closer to home and less heartening example, I think I've seen some figures floating around that over the last 40 years, the bottom 90% or so of the American population has experienced virtually no gain in real personal income. More alarmingly, I think something like half the American population today has zero to negative net worth. Now unless dysgenic factors have been supplemented by Venusian mind-rays, I think this seems more likely due to "systemic economic organization factors" analogous to Communism, rather than changes in American intelligence.
I suspect that the correlation between IQ and wealth will only strengthen over time, as other salient factors become increasingly equalized.
ReplyDeleteI suspect the exact opposite. Being on the technological frontier and on the frontier of industrialization is hard. Catch-up growth is easy.
All the developing world needs to do, is to adopt mature, idiot-proof technology and established methodology.
The IT revolution makes a lot of white collar work obsolete.
National IQ thinking goes mainstream.
ReplyDeletehttp://mason.gmu.edu/~gjonesb/JonesADBSlides
If you come to some conclusion at a particular moment in time (e.g., Asians underperform their IQ), then you better check the historical record to see whether you are being fooled by special circumstances(Asia recovering from disastrous last couple hundred of years). In fact, if you look over the last 2-3k years you'll find that Asia was the economic center of the world for most of that period.
ReplyDeleteWhat evidence is there of this? Preeminent statistical economic historian Angus Maddison estimated China's per capita GDP in the year 1AD to be $450 (1990$), while most of the Mediterranean belt (including Egypt) and the near east was in the low $500s, with Italy (ie Rome) the clear leader at $800. One can quibble with whether such slight differences of estimates of 2000 years ago mean much, but the point is that there is nothing in Maddison to suggest that east asia was some sort of economic wonder land at the time in comparison to the rest of the planet.
Full article has been published: https://lesacreduprintemps19.files.wordpress.com/2011/05/rindermann-and-thompson-2011-cognitive-capitalism.pdf
ReplyDelete@Silver: Maddison's results are little more than guesswork. But you are missing the main point. What were the germanics doing in 1 AD? Were they richer than Africans at that moment in time? Certainly they were much poorer than Romans or Chinese. What does it tell you about their IQs?
ReplyDelete