I had a very interesting discussion with a friend this past week about something called "The Smart Fraction". The theory goes like this. On a nation-state level, per capita GDP and mean IQ correlate pretty well - even better if you exclude a few reasonable outliers like Qatar for its oil revenue and Barbados for tourism. This is true whether the economy is an advanced economy or a developing economy, and is independent of the size of the population.
Without making your eyes glaze from the math, the basic "Smart Fraction" theory states that in order to maintain a modern "developed" economy, you need a certain percentage of people with a higher than average IQ (average being the global average) to do those jobs that require an excess of intelligence.
Civil engineers, systems designers, doctors, chemists, bankers , software engineers and many other intellectually demanding jobs make up a set percentage of any modern economy. And the number of these jobs required to sustain your modern economy scales with population. So if the percentage of your population that meets that requirement is below a certain threshold, then there simply aren't enough of them to keep a modern economy going. Either you import the 'smart' people from elsewhere, or things just 'don't work'.
I had to confess, this had never occurred to me. I always assumed that if you have enough people you have enough smart people. But the data would reasonably lead one to believe otherwise. Think about Nigeria for example. It's Africa's most populous country and I know from personal experience that there are a ton of REALLY smart Nigerians. I've met dozens and worked with many on and off throughout my career. I'm exposed to brilliant Nigerians all the time. But the IQ of Nigerians is below the global average. And even though there are a great many brilliant Nigerians, the percentage of the population that's brilliant is actually quite small.
Since the percentage of smart people in Nigeria isn't high enough, they can't sustain a modern economy. Meanwhile, Nigerian culture is still dominated by it's lower than (global) average mean IQ. So instead of those brilliant Nigerians staying home and inventing Africa centric Facebook Apps, founding Lagos based Venture Capital firms, or developing the Nigerian pharmaceutical industry, they spend their time trying to figure out how to steal from one another, inventing online inheritance scams, or fleeing to London or NY where their brilliance will be rewarded.
As you can probably imagine, I found the idea very interesting.
So for a the sake of argument let's accept that premise - that a modern economy requires a certain percentage of above average IQ people working in highly productive positions in order to sustain it. If that's so, then I think this raises an interesting question about the future of our economy here in the US, particularly if we extrapolate the current socioeconomic trends. Imagine for instance that instead of doing productive things in the private sector, a great many of our intelligent people are deciding that there is a better future for them working in government instead. Government does not require a higher than average IQ (as is evidence by most of Congress), but it's employees can game the system to arrange for higher compensation than a free market would provide them. So instead of adding value to the economy, they only add rules for others.
Suppose at the same time, we also put social welfare programs in place that hand out a comfortable existence to anyone who applies - essentially importing a huge population of people who may not be below average, but are certainly not a part of the "Smart Fraction". Both of these policies will drive the 'smart fraction' down, lowering the per capita GDP. Theoretically it could be lowered enough to drive the world's dominant economy out of the 'developed world' and into the third world.
This is a long way from the most likely scenario of course, but it's at least reasonable speculation. But roughly a third of our population can't even discuss it (and must declare it an unspeakable heresy) because it represents uncomfortable truths for them. It's too ... controversial... too awkward. It points to facts that they are emotionally incapable of facing.
But that doesn't make the facts any less persuasive. And for those of us who are able to rise about our sentiments on such issues, I think there is opportunity in accepting the truth before others can. I think there is money to be made on this information. I'm not quite there yet, but I'm thinking about it. And I've found that people are able to accept anything if it is both 1: The Truth, 2: Profitable to them.
Maybe that's the key to accepting the facts on the issue of IQ heritability.
14 comments:
Ya know - there are districts in NJ that are utterly and completely devoid of what you are referencing. That is why people like Reed Gusciora and Loretta Weinberg are re-elected over and over again. Not that they are any smarter than their constituents, It is because anyone with a sense of dignity or work ethic vacated those districts long ago...
It could also explain the cult of personality among the the wealthier districts where a british ex-pat with a billion dollars can be the huge proponant to an Anti 2A PAC and then propel his wife to the upper ranks of the local Republican party.
The community where I live now, it's the Best and the Brightest from Central and South America. I like the fact that they embrace our freedoms.
Ikaika..Unfortunately the day will come that your island of intelligence will start looking like the exception and the folks on the left of that graph will want what you have or at least want to bring you down to their level. Then you will need a gated community and then you will need a ZIMS to patrol it and then "we all know where that leads to".
A compelling reason to eliminate quotas for skilled worker visas. We impose a limit in this country on how many smart people are allowed to come, and our current system errs on the side of low skilled legal workers and illegal immigrants, many of whom can't even speak the language. The smart ones who want to come but can't will just go work somewhere else, not pay a smuggler to get them in here.
A compelling reason to eliminate quotas for skilled worker visas. We impose a limit in this country on how many smart people are allowed to come, and our current system errs on the side of low skilled legal workers and illegal immigrants, many of whom can't even speak the language. The smart ones who want to come but can't will just go work somewhere else, not pay a smuggler to get them in here.
I think there is a reasoned case for it at least. There are a whole lot of things wrong with out immigration system, but I can certainly see the case for encouraging those that have the most to add, rather than encouraging those that have nothing to add.
you need a certain percentage of people with a higher than average IQ (average being the global average) to do those jobs that require an excess of intelligence.
Is the successful economy a function of the quantity of the cohort of those with high intelligence, or a function of the access to jobs that requires excess intelligence to maintain the advanced economy? Reuven Brenner comes to mind, when you talk about intelligent Nigerians. Where a society restricts access to capital, the citizens, I even daresay those with excess intelligence, turn to crime. Restrict capital enough and you reach the Third World tipping point you describe. I would think you can have a nation with an abundance of highly intelligent in a third world status, if they lack the liberty to access capital.
Nigerians have plenty of access to capital so long as the idea is one that makes business sense. It's one of the largest oil producers in the world, and that doesn't happen without capital. The problem is not global financial infrastructure, but culture. If there were enough smart people with enough good ideas to set up a Nigerian Pharmaceutical industry (for example), all the capital in the world would be ready to finance it.
This isn't as 'chicken and egg' like as you think. Really sound ideas and business plans always find funding.
It's happning in the Eurozone. If you use Edison's creedo: 10% inspiration & 90% persperation.
there is a migration from Eurozone crisis countries to non Euro countries like Czech Republic etc... mixed in with those that need to survive, you have those that need to flourish. Usually these innovators are not shut-ins nor complacent, espescially when a extra-government affairs neccessitate the exit!
Maybe Emerging Europe will be a good basket for 2013 or more...?
Really sound ideas and business plans always find fundingLet's say a Nigerian has a business plan that poses a challenge to the largest oild producer. Will there be a government imposed impediment that restricts capital getting to thant plan? How about in Venezuela?
This is why economies that are based upon a limited number of natural resources seem to have greater restrictions on access to capital. Singapore, HK, post WWII Germany, etc. have no single source of wealth, and thus fewer restrictions to capital access.
Certainly human capital can travel, so perhaps your model should look at a smart fraction differential by age - not everybody is George Bailey. A higher concentration of the smart fraction cohort in any particular political division may be an indicator of lower restrictions to access to capital.
I think you have it wrong. I see private equity deals out of Nigeria all the time - at least 3 or 4 per year. I have friends who work in that space and do nothing else. All kinds of small deals get done there... constantly. They just don't turn into Facebook. No one is even trying to do something like that. There aren't enough smart people there to make it worthwhile to even try.
Maybe if you clear something up for me it will be a little easier for me to see your point. Maybe you can describe for me a deal which "poses a challenge to the largest oil producer" or anyone for that matter. What does a deal like that look like? Economics isn't zero sum. If I win you don't automatically lose. So I can't even think of a deal that some other entity would go out of it's way to prevent. That really only happens on "Law And Order". (They might buy it themselves if they're trying to avoid competition or something... but even that happens more in Silicon Valley than in Nigeria.
Everyone who sticks a straw in the ground represents competition for big oil... so that's not how they optimize their business. My experience is that they aren't worried about it.
It's true, you can blow up your economy by trying to run it top down, but that's really a separate issue, and is smoothed over by looking at all countries, not just those countries with relatively free markets. the correlation holds - albeit less will in a place like Venezuela.
Well it wouldn't be the first time I had it wrong. ;)
So the Nigerian Oil Bill Waters Down Reforms - the government may need not publish how much oil it pumps and all the payments it receives from oil firms and anyone that interferes with the Oil Minister may be fined or imprisoned. How does a member of the Nigerian smart fraction cohort get a deal like what NNPC has? Sorry for the reductio ad absurdem, but I would bet that Nigerian deals you have heard about don't involve taking on the risk of crossing the Oil Minister. Government restricts access to capital even without going out of its way. So maybe I am thinking of access to capital more broadly than getting just funding for a particular deal.
Without the ability to borrow from their future, the Nigerian smart fraction kick the dust off their boots and get out of their little towns - human capital is mobile to a point.
All I'm suggesting is a hypothesis that you may see golden lumpiness in the distribution of smart fraction cohort locations and ages which correspond to political subdivisions that present lower friction in access to capital - smart people like liberty.
first of all a 'smart fraction' is a group not an individual. If the country is thoroughly corrupt and has a segment of the economy completely under government control, then the way the smart fraction gets access is to either go to work for the corrupt person getting the deal, make their own deal with the minister (few of them stay bought) or does something else.
I'm telling you, access to capital is not what's wrong in Nigeria. It isn't really what wrong anywhere. Money is looking further afield for yield than it ever has. If the cure for cancer is developed by some village doctor in Nepal working all alone, two weeks after the test results are published he'll be one of the richest men alive.
Capital access simply isn't a problem if you have something real. You only hear that capital access is a problem from people who don't really have their business ducks in a row.
I have a friend who has a business sin Nigeria turning Palm oil into bio-diesel. He leaves the factory on skids in Lagos harbor so the gear can't be stolen, then brings it in to convert the oil and cart it away again. He solved the local problem in a creative way and easily found capital.
There are some problems I spot in your argument.
Firstly, IQ isn't totally synonymous with intelligence. There are multiple intelligences and many street-wise clever manipulators aren't in fact higher IQ. Having a score under the top 2% doesn't mean such a person cannot have high intelligence in any area. Average scorers can make productive gains in a nation's economy with motivation. Psychologists have even found registered nurses with 85 IQs, so the capacity for intellectual success is more broad than IQ will lead you to believe.
The other problem is the heritability of IQ. If I read you right, you're assuming that welfare will increase the amount of lower scoring individuals? Before I say anymore, I will say I'm vehemently opposed to any non-voluntary welfare.My problem with your conclusion is that I'm thinking you believe low scoring welfare users cannot produce intelligent children due to poorer genes. This isn't exactly the case. What creates more low scoring individuals is the poor prenatal health and nutrition; that is what keeps the low scoring trend occurring. It's a vicious cycle: Many are not clever enough to realize the sheer importance of prenatal care and poor prenatal care encourages unhealthy babies ... continuing the trend. Favoring welfare will have a dysgenic effect, but not for the reasons I think you are implying here.
I don't disagree with much of what you say, but I just wanted to make it clear that 'inferior genes' aren't the problem here. Minimizing government would probably raise the standard of living and a raised standard of living means more healthy functioning children capable of intelligence. I am small government, but because I'm serious about improving and preserving our nation's intellectual capacity, a ban of HFCS and hydrogenated oils would be a step in the right direction as well.
Nonetheless, there will still be irresponsible parents in the world we can't do much about who could damage some of our future's brain health, but rest assured we are finding out how intelligence works and technology will eventually, and soon enough improve the brains of the less fortunate.
I'd be interested in any hard evidence you can produce to back this claim of yours that poor nutrition is the cause of low IQ tests scores.
To be frank, I don't think there is any. And the fact that you sound like someone with a dog in this fight (either an academic or a government official with a stake in persuading people of your view) only amplifies my cynicism.
This has the look and feel to me of self congratulatory nonsense. But I'm open minded. Point me at the data to support your view and I'll happily say I was wrong. But be advised - I'm not some dimwit grad student. I analyze data and the people that analyze it for a living, and can spot intellectual fraud a mile off.
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