Tuesday, March 22, 2011

Punching Above Our IQ

It seems we're richer than we should be. Ireland is an outlier in a recent study showing that most of the variation between countries in terms of GDP per capita can be explained by an index of economic freedom and average citizen's IQ. The study reports that Ireland's GDP per capita is 'too high' relative to our estimated national IQ (a low 93 vs 100 next door in the UK). But in the detailed explanation the author kindly suggests that Ireland's estimated average IQ is probably on the low side. Phew!

There is a growing interest in the role of IQ in national economic performance. One recent study suggests that it isn't the average IQ that matters but the IQ of the smartest 5% of the population:
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.
IQ - like race - is a sensitive subject, to put it mildly. Even if, as I've noted before, it was we Europeans with our 'middling IQ' that succeeded economically rather than higher IQ Asians. Suggesting that there's rather more to economic success than IQ (see Niall Ferguson's current series on Civilization for the details). Which is good news for 'low IQ' nations. Apart from the persistent problem of measuring IQ we also have the Flynn Effect, i.e.: long run improvements in average national IQ due to a possible combination of diet, education, technology etc.

Even better news: evolution hasn't stopped. I recently read The 10,000 Year Explosion - a truly fascinating book. The authors describe an 'endless dance between biological and cultural change' that continues to this day. That evolutionary force means that Civilization will continue to be an intelligence-enhancing 'drug': one that holds out the promise that all of humanity can eventually enjoy a higher standard of living.

A higher standard of living is something we continue to enjoy here in Ireland, despite our embarrassing lapse into self-pity in recent times. The moral of the story? Don't get mad, get smart.

6 comments:

  1. I think it is just economic 'noise' - over time it will emerge what degree of Irelands's *apparently* high recent wealth is based on high economic productivity, and what is merely increasing levels of borrowing and inflation.

    At present these things are not accurately nor validly calculable (even if governments were *trying* to be accurate and truthful, which they are not).

    But I think that it is very likely that Ireland does indeed have a lower average IQ than the sount east of England (where most of the productive economic activity is located): as well as many measures over many years this would make sense in terms of the nature and levels of migration (and the fact that IQ is mostly hereditary).

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  2. IQ increased in situations where those with higher IQ had more surviving children. I don't believe that is the case today in any advanced country.

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  3. @gcochran. Wouldn't it be more the case that those with higher IQs had used that advantage to increase their chances of survival to reproductive age, and then had reproduced in sufficient numbers to ensure the transmission of that hereditary advantage to their surviving offspring? And in a world where life was 'nasty, brutish and short', perhaps high IQ would not have been the defining factor in survival that it may be in our own time.

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  4. No, not at all. As far as I can tell, IQ was more useful in state societies than it was among hunter gatherers, at least in some cases. if there was sufficient social mobility in those state societies, people with higher IQs had a better chance of accumulating wealth, and that wealth greatly increased the number of children they could raise. Basically, the higher classes out-reproduced the lower classes.

    Today almost everyone, regardless of IQ, survives to reproductive age, and those with higher IQs have fewer children. This is well established. Since IQ is highly heritable, we have to expect that IQ is dropping: improving environmental conditions may mask this drop for a while, but it is bound to happen, if this pattern continues.

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  5. Well apart from the obvious point about disentangling cause and effect (higher GDP leading to perhaps more resources per capita for IQ enhancing purposes - there is some evidence for this in your graph by the way, check out the relative positions of oil rich nations - Norway & Kuwait to a lesser extent UAE etc. There GDP is less a factor of brain power than in peer nations & Norway actually scores lower than predicted by IQ, i.e. by brain power alone they should be creating more companies, but even with the commodity boost they don't reach that potential, which would sugest the causal relationship is in fact the other way about ) -

    IQ is surely far too broad a measure to be any other than a second level indicator?

    I.e. You don't need to be a mathematical genius to write the Harry Potter series of books, or produce world class musicians and artists. On the flip side if you aren't highly numerate & logical you aren't going to create Google or Microsoft (and equally workers and entreprenuers in those fields don't need to extraordinary literary or musical skills). It is surely possible that people with average IQs can be exceptional in one or two areas (to disproportionately beneficial effect), and it is surely possible that some countries may have disproportionate clusters of savants.

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  6. Also worth noting that if you discount the impact of transfer pricing by foreign multinationals by using GNI per capita, Ireland would be much closer to the projected figures (still slightly ahead though).

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