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Mises Economics Blog

Does IQ Determine the Wealth of Nations?

August 21, 2007 7:58 AM by Gene Callahan | Other posts by Gene Callahan | Comments (49)

IQ and the Wealth of Nations is a severely flawed book, falling far short of presenting the indisputable case for the primary importance of genetically determined intelligence in deciding the economic performance of nations that Lynn and Vanhanen claim it offers. Whether or not some nations truly suffer from an ineradicable intelligence deficit, their best path to follow is the one of freedom. Even if a capitalist, low-IQ country has a lower GDP than a socialist, high-IQ nation, that does not argue against the primary importance of liberty for prosperity. FULL ARTICLE

Comments (49)

  • Nat
  • So according to the book's authors, the average IQ of those in China shot up 50 points in thirty years?

    Not very likely.

  • Published: August 21, 2007 8:48 AM

  • TLWP Sam
  • Poor ol' Bart Simpson just can't get away from the chalkboard!

  • Published: August 21, 2007 8:51 AM

  • David A Spellman
  • IQ and the Wealth of Nations is a vanity book written to make rich people feel good about themselves. When the emperors have more than enough clothes, you have to start selling them honorary doctorates, paintings, books, etc. to flatter them. For the most part, this is an exercise in parting fools from their money. But it could turn ugly if people take the game seriously.

  • Published: August 21, 2007 9:08 AM

  • Alex MacMillan
  • Does anyone know what the correlation between reaction to flashes of light and I.Q. was meant to show?

    Having been around university professors for many years, it is my casual observation that many high-I.Q. people seem almost completely devoid of common sense. I often joke that I wonder how some ever find their way home each night.

    If you were stuck for six months on a deserted island with plenty of material resources, for your survival would you prefer your compatriot be a university philosophy professor or a truck driver?

    Another casual observation of mine, which some people may be able to dispute, is that the current birth rate in North America is inversely related to I.Q. levels of the parents. However, I have read that I.Q. levels in North America are increasing. Can anyone shed light on this? Is my casual observation perhaps incorrect?

  • Published: August 21, 2007 10:29 AM

  • Gene Callahan
  • Alex, good comment, relevant to the people of Equitorial Guinea and their supposed IQ of 59. IQs have been rising in the West for decades, as I recall, and among all groups -- faster in blacks than in whites in the US, for instance. (I'm going from memory here, so please double check this if you mean to rely on it in argument or essay!)

  • Published: August 21, 2007 12:20 PM

  • TGGP
  • Gene, I don't think you know very much about IQ test. They have had things like Raven's Progressive Matrices for a while. You do not even have to be literate to take it. It is the most g-loaded IQ test (that means it correlates more with other tests and is considered a better measure of the general intelligence factor). More g-loaded tests tend to have even larger group differences.

    IQ tests showed high scores in East Asia back when they were poor. The "tiger" phenomenon could show that both IQ and economic freedom are necessary but not (by themselves) sufficient conditions for prosperity.

    It is true that the great civilizations of old are not now the places highest in IQ (though they are well above the lowest, which are predominately hunter-gatherer peoples). It is possible that the high IQ populations of today got that way relatively recently. Greg Cochran and Henry Harpending put forth a compelling explanation for how Ashkenazi Jews became the highest IQ population based on their status in medieval cities.

    There is certainly a large environmental component to low IQs in the third world. Gene Expression has the math here showing that you can't believe a 100% genetic explanation for both the black-white gap in America and the african-american gap with native africans.

    A better metaphor for low IQ than mental retardation might be mental age.

  • Published: August 21, 2007 12:21 PM

  • TGGP
  • Gene, the IQ increase you are referring to is called the Flynn effect. It seems to have ended in northwest europe.
    http://www.gnxp.com/blog/2005/08/flynn-effect-in-denmark-norway-rip.php
    http://www.gnxp.com/MT2/archives/004073.html

    There was a small decrease in the black-white IQ gap, but that has also stopped shrinking. You can watch Flynn and Charles Murray's debate on the gap here. I highly recommend it.

  • Published: August 21, 2007 12:25 PM

  • RogerM
  • Alex:"...high-I.Q. people seem almost completely devoid of common sense..."

    That has been my experience, too. As Hayek pointed out, there is a high and valid correlation between IQ and devotion to socialism; in other words, most intelligent people are devout socialists. Hayek believed that high intelligence breeds hubris, which in turn makes intelligent people do stupid things.

    I wonder if the author ever considered that opposite correlation: economic development creates high IQ's. That seems to be the case with education. Econ development increases the educational level of a country, but education doesn't help with development because it's not specific enough, at least public education. The education that grows economies is done on the job for the most part.

    In the "Bell Curve", the authors thought that IQ was 50/50 nature/nurture. 80% as these guys think seems a little high.

    If they found a statistical correlation between econ development and IQ, I would bet that the direction is the opposite of their conclusion. Common sense tells me that greater wealth improves the health and education of people.

  • Published: August 21, 2007 12:31 PM

  • TGGP
  • Alex, a lot of research has been done on the impact of IQ on every-day activities. High IQ results in fewer accidents and better performance in nearly every activity. The only occupation whose performance is negatively correlated with IQ is tomato-grading. The only cognitive skill not correlated with IQ is musical rhythm.

    What you are talking about with birth-IQ correlations is called "dysgenics". In the past the rich had lots and lots of kids. Aristocratic women were practically baby factories. There was not enough property for all of them, which mean a general trend of downward mobility. This is an important factor in "Farewell to Alms". Steve Sailer analyzed birth IQ correlations in present-day America in "Is America Headed for Idiocracy?".

  • Published: August 21, 2007 12:33 PM

  • TGGP
  • RogerM, more intelligent people tend to be more libertarian. Bryan Caplan shows so here and Half-Sigma does so here.

  • Published: August 21, 2007 12:39 PM

  • Daniel M. Ryan
  • Both RogerM and Alex McMillan do make good points. Hayek himself had a very high I.Q.; it shows in his technical writings. As a subsidiary observation, the extent that I.Q. is genetic also supports such a conclusion: Hayek was a first cousin of Ludwig Wittgenstein.

    More to the point, though, there is a relative dearth of common sense amongst high-I.Q. people. I should know, because I'm one myself, and I've seen it in myself. If you're interested, I was assessed by a school psychologist when in senior kindergarten (at the age of five) and got this estimate of my cognitive performance:

    - Math: mid-grade 2 level. (age 7.)
    - Spelling: grade 3 level. (age 8.)
    - Word recognition: early grade 4 level. (age 9.)

    Here's the important kicker, though: also included was a factor that was still measured back in the 1970s in Ontario, Canada.

    "Scores below his age [meaning, "below average"] on a test of common-sense reasoning with factors from social-practical experience eg. 'what do you do if this, or that, happens?' 'Why do people do, have this or that?'"

    Both of these kinds of reasoning skills are variants of correct ad hoc reasoning, or reasoning under what von Mises calls "uncertainty."

    I'm actually glad that I got that last finding back, because it did point out a major difficulty I had and still have. The common-sense lingo for it is, "impractical."

  • Published: August 21, 2007 2:42 PM

  • Max
  • While Dr. Callahan's intelligence and the economic freedom theory of wealth is beyond doubt, his criticism of the IQ hypothesis is clearly not.

    A large number of studies have shown that the intelligence of individuals living in the same nation is highly correlated with professional success and wealth. Since they are living in the same nation, economic freedom is controlled in these studies while intelligence variies between individuals. The results demonstrate that IQ is not the only but an important factor for an individual's wealth.

    Therefore, it is only logical to ask if such an effect should not also apply to a collection of individuals such as a nation. Why should a cause-effect relationship demonstrated by comparisons within groups not also be found by comparisons between groups?

    Since Dr. Callahan doesn't adress this fundamental question, it is difficult to avoid the conclusion that his article is "severely flawed" rather than the book "IQ and the Wealth of Nations".

  • Published: August 21, 2007 3:12 PM

  • Max
  • Dr. Callahan,

    Please permit me to speculate why intelligence might be an important variable for wealth.

    Ludwig von Mises and others have shown that wealth is created by increasing the efficiency of work. According to Austrian economy, an such an increase of efficiency is achieved by the division of labour and investments. Shouldn't intelligence, i.e. the ability to analyse complex situations faster, also lead to increased efficiency and hence be part of the economic equation?

  • Published: August 21, 2007 3:35 PM

  • Mark
  • Say not, 'I have found the truth,' but rather, 'I have found a truth.'
    Kahlil Gibran

    So did Dr. Challahan ever get around to wether a positive correlation exists between I.Q. and wealth of nations?

    Because it seems as if he spent a lot of time on straw dog arguements rather then directly impune the integrity of the I.Q. / Wealth correlation.

  • Published: August 21, 2007 5:05 PM

  • Correlation is not Causation.
  • Ignoring the bias that exists in examinations toward the cultures that create them, this book is another good example of the poor science out there. They believe that just because two variables are correlated then there must be a causation between them that they can not find.

    Either that or it is just a book designed to entice the money suppliers in government to keep the checks coming.

  • Published: August 21, 2007 5:26 PM

  • Gene Callahan
  • Mark wrote:

    "So did Dr. Challahan ever get around to wether a positive correlation exists between I.Q. and wealth of nations?"

    No, Mark, this was a *book review*. Are you familar with the difference between a book review and a research project?

    "Because it seems as if he spent a lot of time on straw dog arguements rather then directly impune the integrity of the I.Q. / Wealth correlation."

    Now you have accussed me of misrepresenting the authors' position, but without offering a single example of when I did so. Unless you can offer one, that is just a underhanded smear.

  • Published: August 21, 2007 5:47 PM

  • RogerM
  • TGGP: "more intelligent people tend to be more libertarian. Bryan Caplan shows so here and Half-Sigma does so here."

    Maybe intelligent people have changed since Hayek wrote that. However, I don't think either article you linked shows that intelligent people are more libertarian. Caplan demonstrated that intelligent people think more like members of the American Economic Association. But AEA members tend to be very socialistic by libertarian standards. I have seen a survey that shows how socialist they are but I can't seem to locate it. But Paul Krugman is a good example.

    The Half-Sigma link is interesting, but actually shows that intelligent people are more libertarian on some issues and less on others. I'm not too confident in their tool for assessing intelligence either.

  • Published: August 21, 2007 6:09 PM

  • RogerM
  • Max: "A large number of studies have shown that the intelligence of individuals living in the same nation is highly correlated with professional success and wealth."

    There should be little doubt that intelligence and wealth are highly correlated. What I contest is the cause-effect relationship. The book's author assumes that intelligence causes people to become wealthy. There is no proof of that. Nor is there proof it doesn't.

    Theoretically, I would argue that intelligence is an effect of wealth, because the children of wealthy people get better nutrition and health care in the critical formative years, and they get better educations, in other words, better nurture and nature.

    Also, I draw support from a parallel field, education. I high correlation exists between education and wealth, but several studies have shown that the cause-effect relationship runs the opposite of conventional wisdom: wealth improves eduation, but education does little to increase wealth of nations. The old USSR is a great example, dirt poor, but some of the best educated people in the world. Even on the individual level, success in college is a poor predictor of financial success later.

    Another example is the commonly held view that poverty causes crime. But sound studies show that the causation is in the exact opposite direction: crime causes poverty, for the individual as well as for the neighborhood.

    Here's another one: international trade causes development. The best economics shows that economic development precedes international trade. After all, if you're a poor nation, what are you going to trade?

    As several posters regularly point out here (and it is the first rule of statistics), correlation DOES NOT prove causation. But people in the social sciences ignore that rule. In fact, that is probably the most commonly broken rule of statistics.

    How can you prove causation? There are some statistical tests you can run on your regression model that help, but most social scientists don't know about them. The best way, as I was taught in statistics, is don't try to create theory from statistical analysis; you're more likely to fall for spurious correlations. Approach statistical analysis with sound theory and interpret the statistics with the theory. That's what good statisticians do and that happens to be the Austrian methodology, too.

  • Published: August 21, 2007 6:30 PM

  • Gene Callahan
  • "I wonder if the author ever considered that opposite correlation: economic development creates high IQ's"

    I speculated about that in the article.

  • Published: August 21, 2007 6:40 PM

  • Gene Callahan
  • Max wrote:

    "Since Dr. Callahan doesn't adress this fundamental question, it is difficult to avoid the conclusion that his article is "severely flawed" rather than the book "IQ and the Wealth of Nations"."

    Max, you, like Mark, seem to misunderstand what a book review is. I *did not* conduct original research into the IQ-nation question. I admit it, I admit it! Nor did I even attempt a thorough review of the literature to try to sum it up. Instead, *I reviewed the book I was asked to review*. I found many very serious problems in the book, and noted them. You do not dispute one of these findings of mine. But you seem to feel that I should have undertaken a several year research project along the lines the authors did in order to produce my own answer to the question they asked!

    Did you see this at the end of my review:
    "It may still be true that inherited mental capabilities are crucial for explaining the relative difference in various countries' prosperity. But if this book represents the best evidence that can be marshaled for that thesis, then we have good reason to doubt it."

    So, I explicitly didn't answer the question you wanted me to answer.

  • Published: August 21, 2007 6:42 PM

  • Reactionary
  • Ideas, not resources, not geography, create wealth. That is why Hong Kong is a major financial player and virtually the entire resource-abundant African continent is the globe's basket case. Better intelligence, better ideas. Mr. Callahan's review is conclusory and leans heavily on Jared Diamond's hypothesis, which Diamond won't even publicly debate.

  • Published: August 21, 2007 7:17 PM

  • TGGP
  • Correlation is not causation but it demands explanation. The high-IQ among east asians preceded their economic boom. Their high IQ cannot be explained by prosperity because they were poor and it can't be explained by test bias either since the tests were not designed but by asians but by westerners. Anyone who thinks IQ tests are biased needs to look at Raven's Progressive Matrices. There is nothing cultural in it, it is pure pattern matching. They also need to explain why IQ scores overpredict success among populations with lower average scores.

    RogerM, the AEA may be socialist by libertarian standards, but because they have studied economics they are much more libertarian than the general public. The only issue that Half-Sigma showed intelligent people to be less libertarian on was the environment, so on net I think we could say they are more libertarian. Also, regarding causation, you can use time (assuming that the future doesn't cause the past) to distinguish them. Twin adoption studies show that the IQ of the biological parents is a better predictor of how a child will turn out than anything about their adoptive parents. At a societal level, high IQ preceded economic prosperity in East Asia.

  • Published: August 21, 2007 7:17 PM

  • Anthony
  • "wealth improves eduation, but education does little to increase wealth of nations. The old USSR is a great example, dirt poor, but some of the best educated people in the world. Even on the individual level, success in college is a poor predictor of financial success later."

    Yes, Hoppe actually notes this in TEEOPP - he attributes wealth to capital accumulation.

    "Another example is the commonly held view that poverty causes crime. But sound studies show that the causation is in the exact opposite direction: crime causes poverty, for the individual as well as for the neighborhood."

    Now I'd love to see a study on that - could you point me to one?

    "Approach statistical analysis with sound theory and interpret the statistics with the theory. That's what good statisticians do and that happens to be the Austrian methodology, too. "

    Excellent.

  • Published: August 21, 2007 7:18 PM

  • billwald
  • Whatever the cause, "The Bell Curve" demonstrated that IQ was predictive of social and economic success in our western society. 50 or so years ago socialist Michael Harrington theorized that success in the city depended upon one's event horizon, how far one could (psychologically) plan into the future. If one couldn't see past next year there was no point to finishing school. Very poor people demand daily wages. Why? Because they can't plan as far as a week ahead.

    Seems to me that when the majority lived on the farm society was mostly cashless and lived from year to year. Maybe the farm owner had to plan ahead, planting trees for the long term, but for the field hand it was plant - harvest - hard times - plant - harvest - hard times . . . until he died. Didn't take much IQ for the field hand to get through the year, especially if he was a slave or serf. Dump him in the city, tell him he is free and must save for his retirement . . . .

  • Published: August 21, 2007 8:19 PM

  • questions
  • Previewing your Comment
    I have noticed that the subject of IQ invariably provokes a string of anecdotes in which the raconteur humbly sneers at purportedly high iq people like professors and describes them as void of common sense, etc. How about doctors? Would they make a better case? How about the civil engineers who build our bridges? don't you care how smart they are? You don't think they don't have exceptionally high I.Q.s? Some people are so uncomfortable with the idea of some individuals being innately smarter, despite the obviousness of this fact, that they duck their heads, and tell comforting stories about absent minded professors, rather than look critically at what intelligence really is and what it means in daily life, in the the invention and maintenance of modern society. Free you minds from these subjective, defensive anecdotes that you have on ready tap. Read the literature. Linda Gottfredson's web site is perhaps the most well researched in terms of practical measurement of IQ and its effect on daily life. Even a minor difference of a few points can determine whether a person can manage their own medicines, for example, or figure out how to fill in a form. IQ is single most significant predictor in life. There is no other one indicator that predicts better. I.Q. A high IQ certainly does not promise success, but is necessary for merited success in any intellectually rigorous discipline. IQ and IQ like tests are forbidden in the U.S. government (leading to disasters in personnel), but the military can't afford to fool around, and people are grouped by IQ. The more complex operations simply don't even consider lower IQ persons. They did that at one time during Vietnam, and disaster ensued--they found out the hard way that intelligence is measurable and does matter. PC and hurt egos must be ignored in matter of life and death. I.Q. must be viewed in a general, statistical sense and very practical examples can be used; i.e.: the percentage of people who end up on welfare, who make poor judgment decisions, who NEVER read serious literature on any subject, who seem void of curiosity, or the desire to construct their own future. The proof is in the pudding--proof was yeast; if the pudding could rise, the yeast worked. That always seemed like one fairly good metaphor for I.Q.

  • Published: August 21, 2007 8:41 PM

  • Anthony
  • So essentially Harrington was referring to Time Preference?

  • Published: August 21, 2007 8:42 PM

  • TGGP
  • Another person who has done research on the link between IQ and economics is Garret Jones. Here is a snippet about him.

  • Published: August 21, 2007 9:34 PM

  • quincunx
  • The original purpose of IQ tests was to spot children that were lacking behind. That was it.

    Any other use is just intellectual masturbation.

    The flynn effect is a self-fulfilling prophecy of the popularity of IQ testing.

  • Published: August 21, 2007 9:54 PM

  • Daniel M. Ryan
  • @questions:

    You have to remember that each person works with a unique self-constructed database in the back of their head, with regard to this question. Many of those people you object to tend to think of extreme success, where a variety of I.Q. levels are found. This is, after all, a libertarian economics Website, so naturally many of those objectors have entrepreneurial successes in mind.

    Also, the research of Dr. Gottfredson is rooted in a specific time - nowadays, naturally - and also (since she's not a philosopher or deep theorist) abstracts away from the auto-catalytic (or, from the philosophic point of view, tautologial) nature of the correlation between I.Q. and success. Success breeds influence, which tends to lead to success for the likesake of the currently successful. RogerM brought up the point that the true correlation between wealth and I.Q. may be the reverse of what's commonly claimed; I even have a plausible mechanism to explain it: rich and/or successful men marrying women with higher I.Q.s than theirs as a kind of treat to themselves. (There hasn't been enough unisex success to establish a definite multigenerational trendline for a reversal of those genders.)

    Here's a question to test your common sense with: if a high I.Q. score causes high overall success, then why is it such a common conceit amongst the high-I.Q. circuit that the upper classes are 'stupid'?

    [BTW: If anyone here is interested, finding valid counterexamples to a theory (or theorem) is an example of proper ad hoc reasoning at the academic level.]

  • Published: August 21, 2007 11:03 PM

  • David B
  • All sorts of things are correlated with national wealth, and also with IQ. In a post here

    http://www.gnxp.com/MT2/archives/001375.html

    I pointed out that the level of infant mortality - a good indicator of environmental conditions - is even more highly correlated with national IQ than national wealth is.

    As every statistics textbook points out, correlation does not necessarily imply causation. But very often there *is* a causal connection of some kind. The difficulty then is to determine how causation works, and in what direction. In the present case, the problem is to determine whether prior differences in IQ cause differences in economic prosperity, or whether differences in economic prosperity cause differences in IQ. We know from the Flynn Effect that quite large differences between mean IQs can be due to environmental influences, such as nutrition and education, but there is no consensus on what the relevant influences are.

    We should also remember that it isn't necessarily an 'either-or' question. In some cases genetic differences in IQ may be more important, in others it may be environmental factors.

  • Published: August 22, 2007 4:02 AM

  • RogerM
  • tggp: "The high-IQ among east asians preceded their economic boom."

    That's very interesting, because their boom came very late, since the 1960's, and they were very poor before that. So how did they suddenly get so smart? In one generation? Were the Chinese stupid (because they were so poor) before Deng opened China's economy slightly to free entreprise, after which they increased their wealth rapidly? I doubt IQ is something that changes rapidly in a country the way wealth has in Asia. So if Asians have had high IQ's for a long time, why didn't they become wealthier sooner?

  • Published: August 22, 2007 7:57 AM

  • RogerM
  • Anthony : "Now I'd love to see a study on that - could you point me to one?"

    Unfortunately, I read a lot of stuff that I don't archive, so I can't point to any specific studies. But the general direction to go is those who study urban development. They have known for a long time that crime drives good people out of a neighborhood, leaving only the poorest and criminals in the area. As a result, inner cities are poor and crime ridden because the police didn't do their job.

    I didn't mean that all poor people are criminals. The vast majority are good people. And that is another reason to doubt that poverty causes crime. If it did, how would you explain that the majority of poor people are not criminals?

  • Published: August 22, 2007 8:04 AM

  • Gaurav Ahuja
  • This is directly to Mr. Callahan. I will not be looking at the comments section again, so please reply to me by e-mail(but not by the e-mail listed here). Nobody doubts there is an interplay between the environment and genetics, but of course there are natural limits between human groups. Yes, it is possible that the average IQ of Equatorial Guinea may not be a valid one, considering it probably it is hard to get people tested there. But, realize that IQ and wealth is not perfectly correlated. Ideology obviously matters. You do not get many perfect correlations, but certain correlations are very strong. And that leads you to wonder. Obviously intelligent people are wealthier on average, given that just about all people would like to be wealthy. This isn't hard to figure out. And obviously smarter people will likely catch on to better ideology. That is why, at least I believe the Chinese have caught on to better ideology faster than people in India, even though Indians definitely have more exposure to the great libertarian giants since English is a national language where as it isn't in Hong Kong. Also I don't know where you get the idea that Dr. Lynn and Dr. Vanhanen are suggesting that Blacks were all completely lazy and such in ancient times. That is way out of line. They have asserted that it is useless trying to get sub-Saharan Africa and the most of the third world to be, more or less, equal with the first world nations. That does not mean he thinks they will never be part of the global economy and be on the path to prosperity. Although, if I read him correctly I wouldn't hold my breath within my lifetime. And I agree with that. Anyway, his argument isn't particularly new, but Jared Diamond has a counterweight now who agrees Dr. Lynn in Dr. Michael H. Hart. His book is Understanding Human History http://www.amazon.com/Understanding-Human-History-Michael-Hart/dp/1593680260
    So basically to sum it up, it is all relative and predictive. There isn't a direct moral condemnation of the people in the third world for their past or relative inadequacies. At least, that's how I, a child of third world parents, take it :)

  • Published: August 22, 2007 8:26 AM

  • Anthony
  • RogerM, if you can recall any at a later date, please do provide some names. I'd love to use such information in debates about poverty - people constantly try exonerate the aggressors on the ground that they are driven by poverty into aggression.

  • Published: August 22, 2007 9:57 AM

  • David B
  • Another post of mine:

    http://www.gnxp.com/MT2/archives/001304.html

    may also be of interest.

    Those who may have heard of gnxp as a 'hereditarian' site should note that I did not by any means take a strong hereditarian line, and whatever your views on the subject you may find some facts and references useful.

  • Published: August 22, 2007 10:20 AM

  • edison
  • I would like to know how the book`s authors explain the diffrence between south and north Korea, one is starving millions of its people to death the other one is the richest country in the world.

  • Published: August 22, 2007 11:52 AM

  • Alex Owen
  • Dr Callahan and others

    Re the Flynn effect: what is your view of Seymour Itzkoff's contrary hypothesis that intelligence is falling in the US? Can someone recommend a study that offers a balanced analysis of each hypothesis?

    Thanks
    Alex

  • Published: August 22, 2007 2:59 PM

  • Max
  • Edison wrote:

    "I would like to know how the book`s authors explain the diffrence between south and north Korea, one is starving millions of its people to death the other one is the richest country in the world."

    The authors explained it by differences economic liberty.

  • Published: August 22, 2007 3:44 PM

  • Dareano
  • RE: CHINA

    If you tie a horse to a post it will move slower than a snail. However, once freed from its bonds the horse will easily outpace the snail. My point is that restrained talent will not get you very far. A high IQ population will not be economically successful if they are not free. IQ is necessary, but not sufficient for economic success. You need economic freedom, among other things.

  • Published: August 22, 2007 3:45 PM

  • Dareano
  • "I would like to know how the book`s authors explain the diffrence between south and north Korea, one is starving millions of its people to death the other one is the richest country in the world."

    I would like you to explain the difference in running speeds between two twins. One twin is tied to a boulder and not moving, while the other twin is not tied to a boulder and is progressing at impressive speeds? I for one can not see a reason why the two individuals are not running at the same speeds. I mean, they share the same genes right.


  • Published: August 22, 2007 3:49 PM

  • Max
  • Excellent point, Dareano!

    Let me add the important differences between economic and political means. Depending on the system they are living in, intelligent individuals will employ the means available to them for improving their lifes. In North Korea, they will work for the state and in South Korea for a private company. In other words, in North Korea they will participate in legalized robbery whereas in South Korea they are trying to increase their income by using their intelligence for developing better services and products for Koreans and the rest of the world.

  • Published: August 22, 2007 4:02 PM

  • Max
  • To Alex:

    Richard Lynn has written an entire book about it entitled "Dysgenics: Genetic Deterioration in Modern Populations (Human Evolution, Behavior, and Intelligence)".

    From Chris Brand's comment on Amazon: "...the state-assisted fertility of the 13.5% of people who fall between IQ 70 and IQ 85. In fact, both in Britain and the USA, much larger and more representative modern studies find that people of above average IQ have fewer children than people of below-average IQ (Kiernan & Diamond, 1982 [following up 13,687 British infants born in 1946]; Van Court & Bean, 1985 [studying around 12,000 US adults, born 1890-1964])."

    In analogy, to the Austrian economic insight (When you subsidize poverty you get more of the same), one may conclude: When you subsidize low intelligence you get more of the same.

  • Published: August 22, 2007 4:18 PM

  • Alex MacMillan
  • Max: Thanks for the Richard Lynn Reference.

    Alex

  • Published: August 22, 2007 5:45 PM

  • Max
  • To Gene:

    "Max, you, like Mark, seem to misunderstand what a book review is."

    I beg to differ. Having written several myself, I am quite familiar with book reviews. A good book review describes the aim of the book, its content, compares it to other similar books so that the reader knows if the book suits his or her interests. You didn't write a book review but instead tried to disprove the scientific hypothesis of the book by citing circumstantial evidence.

    "I *did not* conduct original research into the IQ-nation question. I admit it, I admit it! Nor did I even attempt a thorough review of the literature to try to sum it up. Instead, *I reviewed the book I was asked to review*."

    I beg you pardon for my criticism of your "review" and the editor. However, if someone publishes a slating "review" about a topic he/she is ignorant with, as you are obviously ignorant with genetics and intelligence, the general credibility of all his/her writings may suffer. How do I know if your other writing are suffering from a similar lack of knowledge? For my part, I would decline to write a review about e.g. the Big Bang theory.

    "I found many very serious problems in the book, and noted them. You do not dispute one of these findings of mine."

    Gene, I did not dispute your "findings" because there were so many and nearly of them irrelevant.

    We both agree that the authors described a correlation between IQ and the wealth of nations. That's a fact. How do we interpret this finding?

    Generally, correlations do not prove a cause-effect relationship. That's correct. However, numerous studies have shown that IQ is one of the most heritable human traits.

    If we use the deductive method, as Mises did, we need to start with axioms, i.e. simple true statements about the way the world works. A simple true statement in the world of biology is that genes influence phenotypes in individuals. Since a nation consists of the sum of its individuals plus their interactions, it is difficult to see how this would reverse the cause-effect relationship. Furthermore, a simple true statement is that individuals with an higher IQ have an higher income. Hence, if a nation consists of more individuals with an higher IQ, the sum, i.e. the income of that nation should be higher.

    We may also apply the inductive method, we start with all the observations known about intelligence and check discard those hypotheses which are in disagreement with the facts. What are the facts of intelligence?

    (1) Genetic influence as demonstrated by comparison among species, by animal studies using inbreeding, by family, twin, adoption, linkage and MRI studies in humans.

    (2) In regard to the environment, familial, educational or social factors have at best shown a weak effect on IQ.

    (3) Environmental factors leading to brain damage have been found to have an influence on the IQ.

    (4) Individuals with an high IQ earn more and nations with more high IQ individuals earn more.

    (5) Nations mostly consist of one major ethnic group.

    (6) The evolution of human populations shows that they all went through a bottleneck, i.e. ethnic groups are the descendants of a small group of inbreeding individuals. Genetic drift, i.e. chance variations of their genes, is highly likely including those genes which influence brain structure and development. Hence, we should expect as much variation in brain structure as we see in bone, muscle and hormones among different ethnic groups.

    In conclusion, the axiomatic as well as the deductive method of science supports the hypothesis that genes might be one of the factors having an influence on the wealth of nations. And the IQ hypothesis of wealth does not contradict or exclude in any way the economic freedom hypothesis. On the contrary, the IQ hypothesis supports Mises praxeological hypothesis. Mises central thesis is that economy and wealth depend on the actions (choices) of humans. Who is more likely to take correct actions and to make better choices for improving his/her well-being the more or the less intelligent individual?

    "But you seem to feel that I should have undertaken a several year research project along the lines the authors did in order to produce my own answer to the question they asked!"

    I feel that someone who wants to disprove a scientific hypothesis, as you attempted in your "review", should at least know the relevant facts.

    "Did you see this at the end of my review:
    "It may still be true that inherited mental capabilities are crucial for explaining the relative difference in various countries' prosperity. But if this book represents the best evidence that can be marshaled for that thesis, then we have good reason to doubt it."

    The book represents a correlation between measures of IQ and of wealth on the national level. Since the correlation has been shown to exist, it cannot be doubted. Only the interpretation of the authors may be doubted. The only way to do that is to provide one or several facts which clearly DISPROVE their hypothesis. You didn't present anything which DISPROVES the hypothesis. Instead, you presented Jared Diamond's geographical hypothesis as an alternative. A highly speculative hypothesis which completely disregards major factors such as genes is unable to disprove an hypothesis much better supported by all the available facts.

    Summing up, your "review" demonstrates that also highly intelligent and realistic individuals such as the Austrian economists may sometimes fall prey to the prevailing orthodox religion, i.e. political correctness. It's a pitty because Mises and the Austrian economists are children of the era of enlightment and not of faith.

    "The wish is father to the thought, says a figure of speech. What it means is that the wish is the father of faith." (Ludwig von Mises)

  • Published: August 22, 2007 6:05 PM

  • TGGP
  • Max, while your point about bottlenecks has some truth, it is a bit exaggerated to apply it to ethnic groups (which, dividing them by language, there are a HUGE amount of). In population genetics there are both clines and clusters. Ethnic groups tend to vary clinally while bottlenecks result in clusters. There is some amount of clustering imposed by the fact that people tend to marry within their own culture, but "bottlenecks" in other species are usually caused by a large die-off or a founder population separating off from the rest, making cross-mating nearly impossible rather than merely not preferred. Amid human beings geographical barriers like bodies of water, mountains and large deserts tend to cause this clustering.

  • Published: August 22, 2007 7:52 PM

  • happylee
  • Gene Callahan may wish to rent the movie "Idiocracy." It's a more playful approach to the issue.

  • Published: August 23, 2007 12:43 AM

  • Max
  • TGGP,

    Thank you for your comment regarding bottlenecks in human evolution. Maybe a short excerpt from a review paper in the Annual Review of Genomics and Human Genetics 2000, volume 1, pp. 361-385 is able to shed more light on the issue of bottlenecks in human evolution. But you are probably already aware of the available literature.

    "This is a review of genetic evidence about the ancient demography of the ancestors of our species and about the genesis of worldwide human diversity. Microsatellites exhibit a clear almost linear diversity gradient away from Africa, so that New World populations are approximately 15% less diverse than African populations. This pattern is not compatible with a model of a single large population expansion and colonization of most of the Earth by our ancestors but suggests, instead, gradual loss of diversity in successive colonization bottlenecks as our species grew and spread." (http://arjournals.annualreviews.org/doi/abs/10.1146%2Fannurev.genom.1.1.361)

    In other words, human genetic diversity (i.e. ethnic differences) is the result of successive emigrations of small subgroups of populations (i.e. bottlenecks) each having a more limited number of the genes available in Africans.

  • Published: August 23, 2007 2:42 PM

  • Gene Callahan
  • "You didn't write a book review but instead tried to disprove the scientific hypothesis of the book by citing circumstantial evidence."

    Rubbish. I quite explicitly denied that's what I was doing. I was examining *these authors* case for the hypothesis.

    "Gene, I did not dispute your "findings" because there were so many and nearly of them irrelevant."

    They certainly are not irrelevant to whether or not *it's a good book*.

    Look, it's simple: Someone puts out a book saying "The big bang theory is true. I know this because the Keebler elves told me."

    A reviewer can point out this is nonsense without also claiming the big bang theory is false. He does not need to put forward an alternative theory or be an expert in cosmology. The authors case was full of holes. I noted the holes. In not one instance have you been able to show that a single one of my criticisms was wrong. I believe you just have an emotional attachment to this book and are ticked off that I panned it.

    "Only the interpretation of the authors may be doubted. The only way to do that is to provide one or several facts which clearly DISPROVE their hypothesis."

    This is so obviously wrong that it's hard to believe you even wrote it. If I claim that your room is full of unicorns that disappear every time you look, the only way someone can honestly doubt my idea is if they are able to disprove it? Nonsense. How about, "Your case is really weak, and you've given me no reason NOT to doubt it?"

    "Instead, you presented Jared Diamond's geographical hypothesis as an alternative."

    Did you really even read the review? *The authors* presented it as an alternative. They botched their critique of Diamond terribly. I noted this. How does that amount to endorsing Diamond's ideas?

  • Published: August 24, 2007 12:23 AM

  • Lati
  • I Have gone through your site.It's very interesting website. the information that i really enjoyed very much while reading your site.The information which is in your website it is use full to all the Book lovers .Recently i have visited on site which is smiler to your website.If you are looking for good place to find then here is a great list of sites. how to write a book review

  • Published: August 29, 2007 5:53 AM

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