This book might have been the most controversial and important book written in the social sciences in 2015. It is controversial because it makes claims primarily based on IQ tests. Garrett Jones states that, while individual IQ is a poor predictor of wealth, on a national level it is highly correlated to growth. He begins by explaining why modern IQ tests are not culturally biased, even predictable by MRI scans of brain mass. Then he goes on to explain the Flynn effect: the steady rise of IQ over time. Finally, he points out that IQ scores tend to predict a nation’s wealth due to networking effects, mimetic human nature, and cooperation in prisoner dilemmas and in O-ring technologies, which all trickle down, making even those with poor IQs in high IQ countries richer and more productive.
However, what is important to remember is that the actual IQ test scores are of minimal importance. What is important is that they serve as proxies for effects that have empirically significant relevance in the real world. These effects are statistically significant. The magnitudes can be quibbled with and debated, but there is no doubt as to their significance. In fact, IQ test scores are a better predictor of a country’s economic success (measured as GDP per capita) than even years of education. The paradox is, however, while IQ tests are a great predictor of a nation’s wealth, these test results predict little to nothing about any individual’s wealth. Why would IQ test results have such a great effect on a nation’s income, while almost no effect on an individual’s?
First, IQ tests tend to be a good predictor of overall intelligence, the so-called general factor or Di-Vinci effect. The weighted average of a large number of test scores can summarize 40-50% of all differences across people on modern IQ tests. 40-50% is not everything, but when pooled to all of a country’s citizens one gets a pretty good benchmark of general aptitude. I will not get into why modern IQ tests that rely primarily on spacial tasks are not culturally biased, but, sufficed to say, a handful of different tests all produce similar results and they even correlate positively to MRI scans of physical brain size. People have speculated on what factors raise IQ: from a more iodine-rich diet to less lead in the environment. These are interesting sidelights of this book, but not its main thrust.
What traits did people with higher IQ exhibit? They tended to be more patient, tended to be able to juggle multiple facts in their heads including long chains of events, tended to be able to sift through the noise to pick out pertinent information, tended to be more imaginative (and could foresee longterm results perhaps leading to greater patience), tended to be more “savings” prone, tended to be more open to new experiences, and tended to be socially intelligent (that is they could read other people’s motives and signals early and react accordingly). “People who are more rational are more likely to be aware of just how irrational most people are.”
Why are these traits magnified when looking at countries rather than individuals (a magnification effect that Jones’ research puts at up to 6x)? One clue is provided by modern sociology, which has noted people’s tendency to want to conform to the group. Good (and bad) traits are often mimicked through the imitation channel. For instance, the Veblen effect states that consumer spending habits are driven by social comparisons. If your neighbor is getting a Mercedes or a pool installed in his yard you tend to do the same. If your neighbor is saving for her kids’ college fund, you imitate that behavior also. This applies to imitation in the workforce as well. “Just being placed on a shift with other workers who were 10 percent more productive made a worker 1.5 percent more productive on that shift.” From Prisoner Dilemma games to Harvard Business School role playing, it was not the smartest person that tended to do the best, but the smartest average pair that was able to grow the pie the most, creating win-win situations for both parties.
Nations with high IQ scores also tend to score highly on political governance issues. They tend to be more free market, open to trade, and socially liberal. The Corruption Perceptions Index correlates strongly with high IQ. People with high IQ tend to be more politically aware and hold politicians to greater account. High IQ countries tend to save more of their income and invest in longer term capital projects. They also tend to put their investments in foreign countries that offer higher returns, not falling for the “home-country bias” that affects most of the world’s investment. Higher IQ test scores are not an end in themselves. But if they result in citizens with higher overall intelligence, as measured by the Di-Vinci effect, that will, more likely than not, result in a more prosperous nation.
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