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Feb. 27, 2016 - Freedomain Radio - Stefan Molyneux
01:11:50
3216 Why Your Nation’s IQ Matters | Garett Jones and Stefan Molyneux

Over the last several decades, economists and psychologists have documented the many ways in which an individual's IQ matters. But, research suggests that a nation's IQ matters so much more. Garett Jones joins Stefan Molyneux to discuss the impact that a nation's collective IQ has on it's prosperity, wealth and much much more!Get "Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own" by Garett Jones: http://www.fdrurl.com/hivemindGarett Jones is Associate Professor of Economics at the Center for Study of Public Choice, George Mason University.Freedomain Radio is 100% funded by viewers like you. Please support the show by signing up for a monthly subscription or making a one time donation at: http://www.freedomainradio.com

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Hi, everybody.
It's Stefan Molyneux for Freedom Aid Radio.
Yes, we are back to the IQ well once more.
This time, Dr.
Garrett Jones.
He is Associate Professor of Economics at the Center for Study of Public Choice.
Obviously, with that job title, it's one of the widest business cards on the planet.
He's at George Mason University and is the author of Hive Mind, How Your Nation's IQ Matters So Much More Than Your Own.
You can see on the video there, Hive Mind.
You can get it Kindle-based.
You can get it...
And I think for an extra 15 bucks, he'll come and read it to you in your house.
Because, you know, we've actually done that twice.
It was actually worked out pretty well.
Absolutely.
Hey, kids, new bedtime story.
So, I mean, we've talked about IQ here.
And I'm always, you know, it's always tough to know how much background to go into.
Because whether people are following the series or dipping into the individual ones, I don't know.
So why don't we start a little bit with some of the common misconceptions about IQ? You know, that it's culturally biased, that it doesn't measure anything meaningful, that, you know, it's really EQ that matters and so on.
I wonder if you could talk a little bit about where IQ comes from and how predictive it is and the degree to which work has been done to attempt to erase cultural bias from the process.
Sure.
Well, that's a great place to start.
So one of my favorite facts to note about IQ is that people who do well on one part of an IQ test are pretty likely to do well on other parts.
Psychometricians tend to call this the general factor of intelligence.
I think of Leonardo da Vinci when I think of this, and I think about how when Leonardo was strong in one area, he was also strong in other areas.
And that's actually a common human trait.
Strengths predict strengths, weaknesses predict weaknesses.
So I call that the da Vinci effect.
And it's worth noting that this da Vinci effect is incredibly broad.
So people who do well on verbal type tests tend to do well on math type tests.
And people who do well on math type tests tend to be better at musical pitch discrimination of all things.
So that's one reason why economists find IQ tests useful in a variety of settings is because we can give somebody one short 45 minute IQ test, the Ravens, which is a sort of visual pattern finding test.
And that gives you a pretty good idea, not a perfect idea, but a pretty good idea of how people will do on a bigger, longer two hour IQ test.
But what's more important is that your skills on an IQ test predict real world events as well.
My favorite one is job performance.
That's one that matters to economists.
The relationship between how well you do on an IQ test, given in high school, and your job performance or your wages when you're in late middle age.
It's actually moderately, between a weak and a moderate relationship, depending on which study you're looking at.
So, IQ tests predict job performance, IQ tests predict skills in a wide variety of settings, and IQ predicts emotional intelligence as well.
It turns out that psychologists and organizational behavior people have run these IQ tests and these emotional intelligence tests, and it turns out that if you're trying to predict somebody's job performance, you're better off just using the IQ test.
By now, there's a vast empirical literature where it turns out that how well you do on an IQ test is the single best predictor of your job performance.
It's not a perfect predictor.
The best thing, the closest predictor of job performance is actually watching somebody do the job for a while.
So, IQ tests do a pretty good job, and it does much better than handwriting analysis, which still gets some popularity in some circles.
Or even calling references and other things like that as well, right?
Yeah, yeah.
Checking references, doing an informal interview where you just sort of shoot the breeze for 20 minutes.
These things work much less well than an IQ test.
You're better off with an IQ test.
So one can complain about the flaws of IQ tests, but we have to be non-utopian about this and compare it to other actually existing methods of picking workers.
So one of my favorite points, though, is to note that IQ predicts EQ. Intelligence predicts emotional intelligence.
So there are a variety of these tests.
I discuss them in the book to some extent.
And to me, the big finding of the EQ literature is that if you're trying to predict job performance, the best thing you can say about current emotional intelligence tests is that they're mediocre IQ tests.
You're better off just giving, if you only get to give one test to your worker, you definitely want it to be the IQ test.
There's some debate in the literature about whether an EQ test helps you a little bit or not at all once you know somebody's IQ. Right.
Well, and I think it's also fair to say that with advances in medical technologies, particularly what's going on with brain scans these days, it's getting closer or we're getting closer to being able to measure the physical substrata that underlies what the IQ test, like the G factor, right?
I mean, obviously, brain size is being very accurately measured.
And there's some correlation, not perfect, but not totally non-existent correlation between...
Yeah, I think it's a.4 or something like that between brain size and IQ, presence of white matter, and even reaction times.
Now, reaction times can't possibly be culturally biased, and the higher IQ people tend to have faster reaction times, which would indicate just faster processing overall.
Yeah, the link between IQ and something like the metaphor of chip speed I think works pretty well.
It generally seems to work with the people who have higher IQs tend to be better at information processing.
So you mentioned the reaction time studies, and those have been run so many times, partly because it's pretty cheap to run, you can imagine.
My favorite one, though, is actually the information processing tasks where somebody, for instance, shows you either the letter L or an F for half a second, and you try to guess which it is.
You try to say whether it's an L or an F. And then they show it to you for a quarter second, and then a tenth of a second, and then finally a hundredth of a second.
And it turns out that people who do better on IQ tests need to look at the figure for less time to figure out what it is.
So the person with a higher IQ might be able to distinguish the two at a thousandth of a second, to exaggerate a bit, whereas the lower IQ person can only do it at about a hundredth of a second.
The lower IQ person needs to look at it longer to know what the symbol is.
Right, right.
Now, when it comes to IQ as a whole, one of the, I don't know, depressing it is to me, you know, one of the depressing realities is that IQ is not evenly distributed across the planet.
I mean, it would be great if it was, because egalitarianism, multiculturalism, so on, would have a much easier time of things, but the reality is that it's not, and sometimes it's by ethnicity to a smaller degree.
At the extreme ends, of course, it's by gender, and that men tend to cluster In a wider sense, among the higher and the lower bounds of IQ. And so there's ethnicity, there's race, and then there's country.
And this is, I think, where your book is so illuminating.
I've argued for years that IQ is the most important natural resource in the planet.
And if you don't have that, it kind of doesn't matter what else.
I'm trying not to have confirmation bias with your book, but I think if you can help people to understand the importance of wealth, economic growth, political stability, lack of corruption, and its relationship to national IQ. Yeah.
Well, you know, so Jim Flynn, Eric Terkheimer, and a bunch of other psychologists co-authored a recent paper summing up where IQ research stands about 20 years after the bell curve.
And I think their findings to – I think to a lot of outsiders would be shocked to read what they had to say because what they say is they're basically looking at just the rich countries at the beginning of their paper and they say – The rank order roughly is Asians slightly above whites perhaps.
They know there's some dispute there.
And then African Americans tend to do worse than whites on average.
Many exceptions.
And then Hispanics are somewhere in the middle.
And these are the kind of comments that get a lot of people in trouble.
And here it is being said by Jim Flynn, Eric Terkeimer, a couple of other big names.
And just so I want people to get the rough gauge, I think it's something like Asians 104, 105, whites 100, African-Americans 85, Hispanics around 90, and then there's the sub-Saharan Africans which are a separate category around 70 to 75 depending on who's data you look at.
And these are huge differences, right?
So an IQ of 70 is in the bottom 2% of, say, British people, but of course if that's the average in sub-Saharan Africa, That's a whole different society to work with and that's one of the challenges without recognizing that that people have.
And as I point out in the book, I go through a series of papers that was co-authored by Jelty Weikertz, who was criticizing some of the IQ data that I'm drawing on.
And even he found that Sub-Saharan African scores tend to be quite low.
And he says, maybe we can raise this through nutrition or better childhood environments or through better TV shows, but they make no promises, right?
They say, like, there's something here that doesn't seem...
It could be partly test bias.
They kick that idea around.
But the idea that that's all of it, the idea that these test score gaps are 100% test bias is not really a part of the serious literature.
And let me point out one more thing.
The da Vinci effect exists across countries.
So when we look at these famous, widely publicized international math and science and literacy tests...
Those correlate extremely strongly, I'd say nearly perfectly, with these IQ scores.
So if a reader really doesn't like looking at IQ tests, I think that they're very useful, but if they don't, every time you see the word IQ test in my book, you can just read the word International Math and Science Test and you'll get the same answer.
Right.
Now, again, it's really, really important because we don't want to collectivize.
And as you point out, of course, individuals' IQ is much less predictive.
IQ is a very, very big picture view.
It really only matters when you're looking at giant swaths of the population because individual IQ does not even remotely perfectly predict individual outcomes.
And the differences between each individual and an ethnic group, their IQ tends to be the same if not Larger than differences between, so you can never judge any individual by any group's IQ or any country, by the country's IQ, but when you start to talk about a big enough group of people, the correlations do start to show up, however much individuals may randomly place themselves on the bell curve.
The law of large numbers seems to really kick in at this level, and that's really where I get some of the power, I think, with my findings, is by noticing some facts from, for instance, mainstream political science research, which is that mainstream poli-sci says that the median voter, in a sense the average voter, is probably going to have a big influence on his society's government.
So if you have a better informed median voter, somebody who is better on IQ-type tests, who just picks up more knowledge over the course of his life...
That person's going to bring that knowledge into the voting booth, and that's going to affect which politicians can win and which politicians can lose.
So when you're talking about millions of people, the law of large numbers really is worth thinking about.
Right.
So the really startling thing, I think, at the very beginning of the book is, as you write, on average, nations with 10 test scores in the bottom 10% worldwide are only about one-eighth as rich and productive as nations with scores in the top 10%.
And, you know, that's the kind of thing you can sit there for a day in a darkening room with just that fact revolving around in your brain.
Now, most people's goal is to immediately, and because group disparities make our egalitarian hope for equality itself somewhat uncomfortable, most people that I've talked to about this, either in the show or privately, immediately, well, you know, it's let.
Or, you know, parasites, or ill health, or disease, or bad governments, or bad schooling.
Like, they immediately wish to move towards a purely environmental explanation.
And that, of course, would be great, because we all love to think that we could be social engineers, and we simply create this environment, and everyone ends up the same.
But there are significant challenges with the environment-only hypothesis, and I'm wondering if you could talk about some of those.
Well, I want to say that that really is not the focus of the book because, you know, I said this early on that a lot of people want to talk about where IQ comes from.
So I decided to do not that.
I decided to write a book about where your nation's IQ takes you.
But I do discuss Jim Flynn and his quote on this.
So Jim Flynn, well known for discovering what we now call the Flynn effect, the long-term increase in IQs.
He's a believer that these IQ differences across countries and across demographic groups are heavily, perhaps totally environmental.
But he himself says that when he comes and talks to academics in the U.S., he finds that they're really unwilling to fund research that would definitively prove that these IQ gaps are environmental.
And he says the only explanation he can come up with for why they won't study this is because these people themselves, these American academics, suspect that part of the IQ gap is genetic and they don't want that to be documented.
So, you know, I'm an economist.
The expertise I really bring to the table is about the link between IQ and politics, IQ and economics.
But it's worth noting what Jim Flynn, who's followed the IQ research more carefully than just about anybody in the world, what he has to say about it.
And what he thinks is that a lot of American academics suspect that a substantial portion of the IQ gap across countries and across demographic groups is partly genetic.
Yeah, and just for those who are interested in pursuing that conversation further, we did have Dr.
Flynn on this show for a nice juicy conversation a little while back.
We'll put the link to that below.
Fantastic guy.
Yeah, I just, I mean, and it is one of the most important questions in the world, particularly with mass migration of different cultures and ethnicities attempting to all live together.
The degree to which there may be genetic limitations on aggregate scores of intelligence are, it's a pretty significant question at the moment.
But let's notice this as well, because Flynn's story is that these IQ gaps across demographic groups or cross-countries are environmental.
And by that, he really means heavily cultural, right?
So he's open to the idea that health is part of it, but he places a lot of weight on these cultural stories.
And if someone tells me that cross-country IQ gaps are mostly cultural in origin, I'm going to really worry about whether we'll be able to find a way to close them.
Right?
Because culture, if you ask me, what field are we likely to learn more about in the next 50 years?
How to fix genetic problems or how to fix cultural problems?
Ah, yes.
Yes.
Yeah, it's like if you try and talk someone out of a long-term cultural belief, you'll quickly find the limitations of reason and its capacity to change minds.
So, yeah, if you look at Islam, 1400 years and still going strong, it's going to be, if that has a factor, then it's going to be tricky to change.
Culture seems quite heavily persistent.
I mean, it's hard to measure.
Anthropology is a field that is almost a collection of mysteries more than a collection of answers.
Fascinating mysteries.
But if you ask me, leaping to the cultural conclusion, leaping to the idea that it's cultural does not mean easily fixable.
I mean, this is something that a lot of people across the political spectrum have thought about in the last decade, right?
Is that, wow, cultural traits seem really persistent.
Wow, how can we fix that?
How can we close some of these gaps that exist in just, say, treatment of women, for instance, right?
It's really hard to close these things.
It's really hard to change culture.
So I don't think we should treat finding that it's non-genetic as meaning, oh, we'll just change that with a few government subsidies here and there.
Well, I think that closing the gap between the rich and the poor, I've sort of argued that America spends more on welfare than the entire world's GDP in 1870, normalized by inflation.
And so if you can't spend the entire world's GDP in 1870 to solve poverty, and the gap sometimes seems to be getting worse, there's not a lot of...
And this is Charles Murray, who's also been on the show.
He talks about this, of course, that no matter what we find, nobody has a big solution that they haven't tried yet.
You know, if you just look at Head Start, there's $100 billion spent, I think, on trying to close achievement gaps between blacks and whites and low-income and high-income.
Kids with almost no long-term effect.
I mean, there's no easy solution no matter what the course.
I think that's where it stands at the moment.
Yeah, I think a lot of people want to think of saying, well, if IQ isn't genetic, it's all just test bias, right?
But the serious academic debate isn't those two poles.
The serious academic debate is Flynn versus Jensen, right?
It's genetics versus culture, not genetics versus mismeasurement.
Right?
And those are both, I still think that, like, people should pay more attention to Flynn's own writings on this.
I think a lot of people don't want to look at his answers, or even his hypotheses, that there are these culturally driven differences, that we're using our brains differently than we did a century ago, and that people in some countries are currently using their brains differently than people in other countries, and that these are sort of, to some extent, cultural.
So that's my preaching about that.
To me, I think economists and sociologists could actually do a lot of fantastic work on testing what Flynn's stories actually mean.
Because we know from adoption studies that IQ seems to be malleable in childhood, but then there's this fade out, right?
And this is one of the facts that Flynn has drawn on in his research.
As he says, hey, that fade out that happens, don't just take that as some law of nature that we can't explain, some mystery.
He says, that's a sign that culture matters.
So the childhood, the fact that your parents' environment that they create for you seems to shape your IQ during your entire childhood.
To him, that's a sign that your local culture matters a lot.
And I think that's an idea that deserves more attention, not just for thinking about IQ, but for thinking about worldviews more generally, that our environment shapes how we see the world.
Right.
And there could also be the explanation which, you know, from an amateur outsider standpoint, I tend to drift towards however much against my will, is that if there is, of course, a genetic basis, and certainly by adulthood, we're talking 50% to 80% according to some researchers, It's sort of like this, that if you don't get enough food, you're going to grow up shorter than you would be otherwise, but extra food isn't going to make you taller.
You'll get to the height that would be natural for you if you get enough nutrition, but you just generally get wider rather than taller if you get too much food.
I think that there is a lot we can do to harm IQ, the degree to which we can push it above what may be natural to the person or to the group.
It seems to be more tricky.
Chinese people are shorter than, say, Danish people on average, but they're going to be a lot shorter during Chairman Now's great starvation epidemics of the 60s.
But if they get enough food, it doesn't mean that they're going to end up as tall as Danes.
That's sort of where I sit, just for my audience's sake.
I don't have any particular proof, but it's where a lot of data somewhat seems to point.
Well, let me see if I can turn us to where I think my unique contribution is.
Me pretending to be a psychologist is a lot of fun, and I enjoyed reading that literature over the last few years and contributing to it to some extent.
But really, I think where my value added is telling people, hey, IQ matters more for nations than for individuals.
And there I have some theories and some models and some experiments that not a lot of people are familiar with.
So, for instance, the trait I draw heavily in the book is the fact that smarter people are more patient.
This shows up in both lab experiments where people are playing for hypothetical money, and it happened when the U.S. military downsized and gave people a choice between one big lump sum right now versus a much bigger lump sum spread out over, say, 10 years.
And it turns out that enlisted people in the military who had higher IQs were more likely to be patient and to take that much bigger lump sum over a longer period of time.
And that was true even when you controlled for a bunch of other things, like what branch of the military, what race you were, how much you had made in the military, a bunch of factors.
And that's because the military, of course, has been testing for IQ for, what, about a century now?
Yes, and they've been keeping people out of the military who do poorly on IQ tests.
So it would be foolish for the U.S. military to use these IQ tests if that meant that they were basically giving up people who were willing to work for low wages for the U.S. military.
But they're turning people away every day on the basis of these supposedly fraudulent tests.
So the link between IQ and patience gets me a lot of leverage because there's a whole lot of economic and political theory that says that patience matters, most obviously in terms of savings rates.
People who are more patient are more willing to delay gratification, they don't buy what's ever right in front of them, and they're more willing to save for the future.
And indeed, I showed that across countries, even when you control for some other stuff, Countries where people have higher IQ test scores tend to have higher savings rates.
And economic political theory says that people who are more patient in the political realm are more likely to worry about their reputation.
They're more likely to worry about, well, if I'm an honorable person, then other people treat me well.
Whereas people who are more impatient might be saying, hey, I'm just going to grab what I can while the getting is good.
I'm going to take this corrupt deal.
I'm going to stick some money in a Swiss bank account, and then I'm out of here.
So the link between IQ and patience doesn't just matter for savings, it matters for your political system's health.
So patient politicians can create prosperity.
Okay.
And, of course, savings rates, again, for those who have not delved deep into the dark caves of economics, savings rates matter because an excess of savings lowers the cost of lending money, which stimulates entrepreneurial activity, investment into capital equipment.
Worker productivity generally is the economy in the long run, in my particular opinion, and that requires a lot of investment.
If you don't have the savings, you can't upgrade your plan.
Yeah, so there's a study co-authored by two economists at the CBO that I draw on in the book.
And these two researchers said, we're trying to explain China's very high savings rate.
And they use a bunch of statistical tests.
Is it just because the Chinese population is young?
Is it because they're poor?
Is it because they're growing fast?
What is it?
And they say, ultimately, in most of our analysis, it looks like China is like the other East Asian countries, and the other East Asian countries tend to have really high savings rates too.
So there's this frugality that spans East Asia and its major offshoot, Singapore, and they can't really explain it.
They don't have a good story for it.
Well, I've got a story for it, and it's that there's this well-documented fact that people who do better on standardized tests tend to be more patient, tend to be better at delaying gratification.
So solving a puzzle is something that economists like to do, and I'm really happy to help contribute to solving this puzzle of why China's savings rate is so high.
I predict as long as their test scores stay high, East Asia as a region will tend to have quite high savings rates.
Actually, by the by, it just popped into my head around 2000, I was in China for business.
And after some of the business, three beer business lunches, which was still common over there, they took me out for a quick round of table tennis.
And there I got to see not only the IQ very high, but the reaction times are unbelievable.
It's one of the reasons why they just pointed out that as a sort of cultural observation.
Now...
When it comes to the deferral of gratification, you have a lot of examples, of course, why that's so important.
And this goes all the way back to the marshmallow test, which I'm sure you've heard about, where you give kids the option of two marshmallows in an hour or a marshmallow now.
It's a pretty good predictor of where things go.
Do you think that there are any environmental differences that might stimulate A deferral of gratification in a particular population.
You know, one theory that's been put forward, you know, it's hard to talk about Jensen without running into his good friend, the Canadian psychologist who worked with him.
Yeah, yeah.
So the argument is, well, you know, when you have a long winter and you've got to save your seed crop and you've got to defer all the gratification, that there may be selective pressures on the brains which accidentally develop the deferral of gratification, and that may have something to do with particular climate.
So that's just one Because we had Linda Karfridson on here who was talking about that theory.
I'm just wondering if you've had any thoughts.
It's not particular to the book, but in terms of origins, I think it can be helpful in helping people understand what might have stimulated these kinds of changes.
You know, economists have been looking at this kind of stuff lately.
In our top journal, the American Economic Review, there's something trying to look at how weather could lead to differences in how you treat in-group versus out-group folks, right?
And the article was very explicit about, like, European weather patterns could be driving, you know, evolutionary changes over the medium term.
So, let me tell you the one time I have heard your story discussed, not in the context of IQ, though.
I was talking to, of all things, a diplomat from a Nordic country, who I won't name the country or the person, of course, but who said that, you know, there's something about having to go through these long winters that probably makes people have to be patient and cooperative.
There's something about those, too.
I mean, it's...
Cultural trait, evolutionary trait, I don't know.
We'll know in maybe 50, 85 years, right, when people can actually do some serious genomic studies on this.
But it's certainly a hypothesis that should be tested.
That's what I'll say.
It's certainly a hypothesis that ought to be taken seriously.
And young professors, like, let me tell you right now, I have to discourage graduate students who want to do research in my area, right?
Right.
I have to discourage them.
Because as I said, you have got a career ahead of you.
Don't ask the wrong questions.
I actually, I didn't follow my own advice, right?
I worked toward tenure, doing all this IQ research.
I was an assistant professor.
I did all this stuff you're not supposed to do.
I had a couple of people I respect pull me aside and say, why do you really want to do this?
Why are you taking chances with your career like this?
So I took this path, but I can't recommend it to others.
I shouldn't be in that position.
Academia is the place where you're supposed to be able to ask big questions and get the wrong answers.
And George Mason University is just the kind of place where you're allowed to do that.
I've had fantastic support from my colleagues here.
My old university, Southern Illinois University Edwardsville, supported me a lot.
So there are pockets where you really can ask the big questions.
More of academia should be like that, and I should be able to encourage my grad students to study IQ research, the link between IQ and evolution, how geography could affect people.
We don't live in that world right now.
No, it is a bit sort of Copernican in terms of where things are and the heresy.
I mean, it's hard to ignore James Watson, Nobel Prize winning biologist, one of the most famous biologists in the world, mentioned something about IQ differences and ends up having to sell his Nobel Prize for food money.
So, yeah, it is it is tragic.
And but, you know, I'm sort of drawn towards the fire.
I think that's where the most exciting intellectual advances are.
Now, let me run.
Earl Hunt, who has a fantastic new textbook on intelligence available on Amazon.
It's ridiculously inexpensive by textbook standards.
He actually has four pages in his book discussing the Watson affair and comparing, you know, James Watson is a man who does not say things in a polite way.
He never really has been that guy, right?
He's a very good writer.
I enjoy his prose.
He gets a lot of his fame for being blunt, terse, sometimes rude.
Anyway, so Hunt had the gumption to actually compare Watson's statements...
To the actual empirical data, right?
To the mainstream literature.
And it's a little four-page.
It's a pull-out box.
It's the kind of thing you can Xerox and assign to students.
It's probably floating around.
You can probably pull it up on Google Books.
It's just a couple of pages.
And he basically says, if you look at Watson's actual statements and treat them as empirical claims, by and large empirical claims, not as always and everywhere true statements, these claims are within the range of the mainstream literature.
Right?
I mean, Watson's a blunt guy.
He's not the guy you want on the hiring committee, right?
And all he said, just sorry, for those who don't know the affair, basically what he said was somebody was asking him about foreign aid or foreign aid came up in a conversation and he said, well, one of the problems, the reason I have some despair about foreign aid is we're treating everyone around the world as if everyone is the same and in particular in sub-Saharan Africa, the data says not really.
I think that was generally the sum of it.
Yeah.
What he was saying is just basic, that particular claim, just stick to that one claim, that is what this Dickens-Flynn-Turkheimer co-authored paper says.
It says, IQ differences across countries are important, and it's unlikely that we can end cross-country inequality unless we end cross-country IQ differences on average.
Right.
I mean, it was their statement.
If you had put on television their quote out of context and attributed to James Watson, you could imagine the Twitter fury.
Right, right.
Well, so just so people, if you bring our topics to your local dinner party, you might have a very exciting dinner party.
That's what I wanted to say.
But, you know, I'm for the excitement.
So let's go back to income disparities because this is something that is, of course, discussed at Infinitum in...
The media, right?
Income inequalities, income inequalities growing and so on.
But people usually look at them within a country.
You broke down income inequalities between the richest and the poorest countries and you've got staggering amounts of differences.
Help people understand just how big the income disparity is between high IQ and low IQ countries.
Yeah, so the estimate I have in the beginning of the book is that the difference between the top 10% and the bottom 10% of countries, sort of by IQ, is a factor of income of about eight, right?
So that's no small difference.
And so by normal measure, you know, just a normal finding of ordinary macroeconomics is that cross-country inequality is much bigger than within-country inequality, right?
If you just look at countries and sort them by income, the 90-10 ratio, 90th percentile, 10th percentile of income.
It's a factor of maybe 30, maybe 50.
I mean, how do you even compare incomes?
I mean, we have this crummy measure called GDP. It's maybe as bad as IQ measures.
But that's all we've got.
So a factor of 30 to 50 across countries in terms of income.
And that's much bigger than what anybody thinks is the cross-country, within-country inequality measures.
And that's the difference between $100,000 and $2,000 or $3,000.
I mean, it is crushing in its disparity.
Oh, it's amazing.
And so the question is, why is...
I mean, where does this come from?
Why is it that the poor countries find it so difficult to actually produce valuable output?
Why can't other countries...
I mean, Denmark's just some country, right?
How is it that they produce so much value and they build these homes and they have internet that works and people have hospitals?
What is the difference?
Why is it that people who, you know, outwardly seem pretty similar managed to create countries that are just so different?
And so this is what I call – I refer to this in the textbook.
I refer to it as the paradox of IQ, which is that within a country, the link between your IQ and your own wages is small to moderate.
One IQ point within a country is associated with 1% higher wages perhaps.
One IQ point, however, predicts perhaps 6% higher income across countries.
So if you have a choice between raising your own IQ one point or raising your nation's IQ one point, it's obvious what you want to pick.
You want to raise your nation's IQ because being around smart people somehow seems to make you more productive yourself.
And the heart of the book is about explaining why I think that is, but I think that is a genuine fact.
I think being surrounded by the intelligent, being surrounded by people with a lot of cognitive skills helps you do more every day.
Right.
Okay, so let's talk about the halo effect, or whatever you would want to call it, but this effect where if you're around smart people, you do better.
I mean, everybody knows, as you point this out in the book.
If you're running against someone who's a great runner, you're going to run faster.
This supermarket example has just been turning around in my brain.
I wonder if you could help people understand the cashier example even in the sort of non-O-ring economy, the degree to which you're paying someone who's better not just for their own increased efficiency but the effect they have on the efficiency of others.
Yeah.
So here's a paper published in a cool econ journal.
And they had data on the productivity of grocery store cashiers.
And, you know, most grocery stores have a bunch of aisles, you know, aisle one, aisle two, aisle three, all set up.
And in addition, you know what direction people are facing, right?
Because the way the cashier desk is set up, you can actually, you know, you're going to be pointing one way.
And so these researchers could actually tell if you assign, they check to see if a more productive person went on a shift, did that make the people around them more productive, right?
Does being around a productive worker make you more productive?
Does being around less productive workers make you less productive?
And they did find, in fact, that having more productive workers on your shift made you more productive.
I've got a long-term measure of how productive me, Garrett Jones, is as a supermarket cashier.
And then you check and see, when do I do better and when do I do worse?
And one of the things that predicts when I do better is when I'm on a shift with a lot of good people.
So the second check they did is they checked to see what is it that drives that because they knew what direction people were facing.
So was it more important to be watching someone who's a hard worker or to be watched by someone who's a hard worker?
And the answer was it's important to, if I recall correctly, to be watched by someone who's a hard worker.
When you know you're being monitored, that gets you to work harder.
The effect is small, but because it's free in multiplier, it's important.
So the cashier who was 10% better, every person that they had their eye on increased productivity about a percentage point and a half.
So if they're looking at 10 people, that's a 15% increase plus their 10% increase, and it's free.
So this is one of the reasons why slightly more productive people get paid a lot more because they make everyone else more productive, which isn't an effect that's there if they're gone.
Exactly.
So the idea that, you know, the old saying I heard was that I went to BYU when I was my undergraduate, and I remember seeing a sign walking through the library, something to the effect that all of us are examples for other people.
Some of us are examples of what to be, and some of us are examples of what not to be.
And this is a version of this, right?
Peer effects seem strong on productivity.
But I think the most important one is one that people don't really think of as a spillover effect, which is the political effect, right?
Having smart – if I live in a nation that is populated with a lot of people who love laissez-faire and who are in favor of capitalism and competition and they're against, broadly speaking, communism, then I get the benefit of that whether I vote for that or not.
So the most hardcore communist who moves to America and is doing activism for the unreconstructed communist party or the new Trotskyist movement or whatever you call it, that person gets the benefit of living under moderate laissez-faire with all the benefits it offers.
So having – so basically voting is pure spillover effect, pure side effect.
And so having a nation filled with people who are more likely to support basically market-oriented policies, more likely to support politicians who focus on the long run rather than the short run, these are things that are likely to help – that are going to help everyone in the economy whether they vote for it or not.
Yeah.
Ah, yes.
Now, this again, I was great to, in the endorphin rush of confirmation bias, I was very happy to read in your book, of course, the relationship between IQ and a support for free market policy.
So let's talk about that a bit.
And I'd like to talk a little bit more about how that shakes out politically.
Yeah, yeah.
So, my co-author, Nicholas Petrovsky, actually wrote the first paper on this by himself.
He used the well-known Corruption Perception Index, the CPI, which is, they have a great website.
And these folks draw on a lot of different measures of basically how corrupt government is, how many people you have to bribe to get anything done, that kind of thing.
What Petrovsky did is he checked to see if these national average IQ scores were robust predictors of whether your country was corrupt or not.
I mean, so corruption isn't like genuinely a measure of laissez-faire, strictly speaking, but it's just a measure of, can you get things done in your country?
Does it take two years to set up a business or a week and a half?
And it turns out he found it was quite robust.
These IQ scores did a robust job predicting institutional quality.
So later on, he and I worked on a paper together where we used a measure of property rights, some property rights measures that a group in D.C. had created.
And again, we found that countries with higher test scores, whether you use these IQ scores or these international math science literacy scores, You're much more likely to have well-protected property rights if your country had higher test scores.
And that was true even if you controlled for the nation's income level, what kind of legal system they had had, what part of the world they were in.
It was a reasonably robust predictor.
So, of course, test scores, you know, having high IQ scores aren't the only thing that makes your country support property rights and at least a moderate degree competition, but it certainly doesn't hurt.
Right.
And it has struck me that, you know, one of the big challenges of economic style thinking for most people is the unseen versus the seen.
You know, the old example that the government goes and creates 500 jobs and everyone's like, woohoo, 500 jobs richer, but they don't see all of the jobs that weren't created and never will be created that were probably much more sustainable than the government jobs because of the money that was taken out of the economy by the government.
In order to create the 500 visible jobs.
And it struck me as you were talking, I was writing in the book about the degree to which smarter people are able to defer gratification and to see the long term consequences of things not immediately in front of them, that that relationship between sort of free market economic style thinking and IQ would seem to be fairly robust.
Yeah, so I can always recommend my colleague Brian Kaplan's excellent book, The Myth of the Rational Voter, which is a booklet treatment of these topics about how informed voters really do matter and smarter people who do better.
He did another paper with IQ. The book uses education.
But either way, Brian Kaplan has confirmed that smarter people are more likely to see the invisible hand.
Seeing the invisible hand is a key part of having voters who will support some degree of market competition, some degree of long-run thinking.
Like you said, looking at the short run over the long run, looking at the unseen versus the seen, as Bas Jot would say, these are things that are pretty cognitively demanding tasks.
Having a higher IQ certainly is an ingredient in the recipe of supporting at least moderate market-oriented policies.
Right.
Now, an area where I have some pushback on the thesis in the book is around immigration, which, of course, is one of the biggest topics in American politics at the moment.
I wonder if you could talk a little bit about the thesis, and I don't want you to give the cold notes of the book.
You've got to go buy the book.
I mean, it's a fantastically written book.
But you have, of course, some economic arguments as to the benefits of immigration into America, and I have some pushback, which we could back and forth a little.
Sure, sure.
So, you know, so we've got this puzzle, right?
Which is what I call the paradox of IQ. So you're being around smart people seems to make you more productive.
But at the same time, there's a big empirical literature that shows that for one thing, lower IQ people don't earn that much less.
And another literature showing that low skilled immigrants don't seem to push down the wages of natives very much.
If at all.
So the debate, the serious academic debate is over whether low-skilled migrants, we can suspect that on average they have low test scores.
I mean, there's no real measures of that.
So that's why in that chapter I tend to use the term low-skilled.
So on average, we know that low-skilled migrants don't seem to push down the wages of domestic workers that much, right?
And people have checked this a lot of ways, and it's not like economists have some bias against telling people this story.
I mean, economists tell a lot of people things they don't want to hear.
So, George Borjas has found the most pessimistic mainstream estimate.
He's at Harvard and the Kennedy School.
And his estimate, which people get a lot of attention, is that the level of low-skilled migration that the U.S. has experienced has probably pushed down the wages of, say, high school graduates by perhaps 8%.
I mean, that's a real loss, but it's not economic catastrophe.
It's not a 50% decline in wages.
It's...
Small to moderate, right?
So when you look about what people are unhappy about, about the U.S. economy, to look at low-skilled immigration as being the cause of short-term job loss or lower wages, that doesn't seem like is the best answer.
So anyway, I've got a story.
I'm trying to figure out a story for why is it that IQ can matter so much for nations and yet relatively modestly for individuals.
Okay.
And so I thought about it and I pieced together two different models.
Michael Kramer's awesome O-ring model, which shows that his story is that a lot of tasks in the modern economy are like building a space shuttle, where if one little thing goes wrong, total catastrophe.
And just for my younger, I'm sort of cognizant that I got a lot of listeners in their 20s and early 30s.
Could you just give the backstory of the O-ring?
Yeah, so the space shuttle Challenger exploded about a minute or so after takeoff in the mid-1980s, and it was later found that the reason it exploded was because one small rubber O-ring, perhaps about this big around, which was basically a fancy rubber band, right?
A thick, big rubber band.
That had failed, and that was the only thing keeping hot rocket gases from escaping the vehicle.
So the hot rocket gases got out, they set a fuel tank on fire, the entire space shuttle exploded.
So the failure of one small O-ring, one small piece of one big rubber band, was enough to cost the lives of an entire space shuttle crew.
And so Creamer uses this as a metaphor for much of the modern economy.
You can think of the old child story about for want of a nail, the shoe was lost.
For want of the shoe, the horse was lost.
And then you lose a whole battle just because somebody forgot to put in the horseshoe the right way.
This is a version of that.
So a lot of the modern economy seems to be like this.
Oh, and I'm sorry to interrupt, but I thought it was a great example of the vases, if you could mention that.
I think that crystallizes it for people a lot.
Oh, yes.
The Parable of the Vases.
This is...
So the story...
So here's my metaphor.
Suppose there are two people and it's their job to make vases.
One person makes the vase and casts it.
The second person packs it away and ships it off.
So it's a two-step process.
So suppose each worker has 100% chance of doing the job right.
So you're sure that everything is going to go through, right?
Okay.
Suppose there's another team where each worker has a 50% chance of doing the job right.
Well, so that means half the time the person making the base is going to drop it and break it, and half the time the person who is trying to pack it away for shipping is going to drop it and break it.
So on average, that team, that second team, is only going to finish 25% of their bases.
Half times a half is a fourth.
So, the question is, suppose all I have is these four workers.
Two perfect workers and two of these sort of mediocre 50-50 workers.
How would I want to sort them into teams to get the job done?
And so, should I put a good person with a bad person or should I put two good people together and two bad people together?
The answer, just from math, totally unambiguous.
You want to put the good people together and the bad people together.
If you put the good people together and the bad people together, what will you get in total output?
Every time you try to make, you know, each team tries to make a base.
First team's going to do it perfectly, 100% success.
Second team's going to get it right 25% of the time.
That adds up to, according to leading experts, 125%.
Suppose you did it the other way.
You decide to be egalitarian and like have diversity or whatever, whatever you want to call it.
So you put the good person with the weak person on each team.
First person's going to do it perfectly.
Second person's going to drop it half the time.
You're going to get a 50% output from each team.
50% plus 50%, 100%.
100% is less than 125%.
You definitely get less output when you have the workers be on the diverse teams compared to having the workers be on the, what academics would use the clunky term, teams with strategic complementarity.
That's a terrible mouthful.
But basically, if you sort your teams by worker skill, best people together, weakest people together, you definitely get more output.
This is Michael Kramer's story.
So it's an argument for sort of, you know, putting the best with the best.
And so one version of it is when it comes to computer chips, you're going to have the very best workers all working together to make the chips for like my fancy smartphone here.
And because, you know, it's a cutting edge one, whereas a smartphone that's 10, 15 years old where the technology has been worked out or whatever, you might put the weaker workers working on those projects.
Right?
So sorting by worker skill, a natural reason for sorting like with like.
So Kramer works that out.
What I bring to the table is I wrote a theoretical paper with a bunch of math where I said there's another kind of way jobs can get done.
And it's actually the way that economists usually think of skill battering, which is we just assume that, in a sense, one really sharp worker can be the same as maybe two weaker workers.
So basically, I can have one college grad who's like a top-notch corporate attorney getting a job done, or I can have two graduates from a weaker law school to get a job done.
They're substitutes, but I know the exact trade-off ratio.
And if jobs are like that, then there will be only a modest relationship between worker skill and worker wage.
Whereas, you can imagine, in the vase example, how much could I really pay those two mediocre workers?
Really, they're producing one-fourth of what the top workers are, so I can really only pay them one-fourth, or else I'm going to be taking a loss.
So, most of the economy probably works in the second way, what I call the foolproof way, where you can kind of mix and match your workers.
Firms know I can have some mediocre workers and some sharp workers and all.
The sharper workers are better, but they're not that much better.
There are other tasks, mission-critical tasks, where worker skill is crucial.
And so I think this shows why it can be that IQ matters a lot in some sectors of the economy.
And those are what I think of as the commanding heights of the economy.
But many other sectors of the economy, like a sharper person just isn't going to get that much more done.
And that second sector, I think, helps pin down the wages between higher IQ and lower IQ workers.
So, higher IQ workers tend to earn only a small to moderate amount more, and part of the reason is because down at the McDonald's front line, down at the working at the job at the mall, that sharper person isn't going to be able to do that much more.
I think that's what helps pin down the moderate wage effect of IQ within countries.
Yeah, and I mean, this is, I think, the challenge with medium to low IQ people looking at these kinds of things is you always hear, well, you know, this person, this CEO gets paid so much, and I think that it's somehow arbitrary, but of course, it's the value that you create.
Justin Bieber gets paid more than the roadie because… People are there to see Justin Bieber, not the roadie.
He's not making money more than the roadie unfairly.
It's because he's the reason that people are coming and paying $600 a ticket.
So he's paid by the customers, and it's the customers who choose the wages, not some arbitrary capitalist guy with a monocle and an evil wand that just makes these things happen.
But it's harder, I think, for people to see that because it's a couple of steps removed from just the obvious paycheck.
Well, wages aren't charity, right?
So there's an interesting question about whether CEOs are able to sort of control the levers of power and pull some money their way.
But Bieber, professional athletes, a lot of staff at top law firms, I mean, these guys are just costs, right?
The firm is not going to pay you more than it needs to.
And if it does pay you double or triple what it needs to, they could risk going out of business.
If you routinely pay your workers much more than they produce, you're not going to be in business for very long.
Well, and the rich people, again, I sort of think that given that IQ and its manifestation in terms of capital are very scarce resources, what I love about the free market is the degree to which it relentlessly moves resources to those who can make the greatest use of them.
Whether you like that or not, it's sort of customer demand satisfaction and so on.
And that's a real challenge for people.
Like I say to people who call into my show, you know, tax the rich.
You know, I have some Bernie Sanders call in.
It's tax the rich.
It's like, but here's the thing.
If you tax the rich, then fewer resources will be going towards the wealthy and the wealth and IQ thing is not unrelated.
And what that means is that you won't get the next cool cell phone that's easier for people to use.
You know, computers used to be really tough to use.
Like when I was a kid learning to use computers, you just boot it up with a command prompt and you had to sort of thumb through a whole dictionary of code to get stuff going.
And now, you know, you can just swipe around and play Angry Birds or whatever.
So because we've allowed resources to accumulate to the highest skilled people, many more people, all of the advantages of computers have flowed down.
So now somebody with an IQ of 80 can use a computer that's more powerful than the originals.
But it's hard for people to see that long term gain when the government sort of dangling a big check in front of them in the moment.
Yeah, I mean, this is a case where actually behavioral economics sort of helps this story, Because if people treat the chance of getting rich off of an internet app as like a lottery ticket, right?
Then they're willing to actually put in a lot of hours working on the software and coding and marketing and everything to try to get this thing out there in the hopes that they can strike it rich, right?
Right?
You know, economists like to point out, oh, it's, hey, it's irrational for you to, you know, invest in the lottery tickets or whatever.
It's a bad bet.
Well, a whole lot of entrepreneurs are putting their life savings into restaurants, into new IT projects, and they mostly fail.
You take away that lottery ticket and you tell people, well, if you have a big best-selling app, you can make maybe half a million, 250 grand, whatever, and then you got to share that among a bunch of people.
I think a lot of people say, that lottery ticket's not worth running, right?
We saw how many tickets got bought once the Powerball got up to $1.5 billion.
Is that about what it was?
I think it was something like that, yeah.
And I think a whole lot of the Silicon Valley world is built on people thinking they're going to be the ones who put...
They're putting in the sweat equity to deserve that lottery ticket.
You tell them they can't get that.
You tell them that you have a big success in the IT world and the best you'll make is, I don't know, $150,000 a year or something like that.
A lot of these people will just take a nice, boring salary job in the government sector.
People are not spending months living off of pizza and Mountain Dew just for the promise of a $40,000 a year coding job.
No, no.
I mean, I was an entrepreneur in the 90s, co-founded a software company, and it was brutal, and it was exciting, and it was thrilling, but it was the pot of gold as well as the terror of the creditors that kept everyone moving.
You know, the carrot and the stick are both important.
Okay, so with regards to immigration...
There are some aspects that I think are important.
And of course, one of them is the welfare state and the degree to which you can get paid, so to speak, for not working.
By the welfare state, I also include things like going on disability and so on, which has exploded recently, partly due to an aging population, but perhaps, right?
And of course, you can see workforce participation in the U.S. is really cratering these days.
And so the degree to which immigrants...
Don't affect wages.
I wonder if they push people out of the workforce into government-supported lifestyles or incomes.
I also wonder the degree to which, you know, if you look at the welfare consumption statistics for native-born Americans, it's 30%.
For immigrants, it's 51%.
For illegal immigrants, it's over 60%.
So I wonder if the immigrants are coming in and not directly affecting the labor market because they're pushing Americans into other non-labor incomes and also the degree to which they're coming into America and not hitting the job market because of the welfare consumption.
So now notice what you're saying there.
You're saying there's two things that immigrants might do.
They might push down wages and they might not push down wages, right?
So, of course, if people are, you know, taking a lot of government, they get to the country and then they can sign up for welfare, you know, with some lag or whatever.
They're pulling resources out of the pie.
But that's a pie-slicing story.
And, you know, as I start off in the first couple pages of the book saying, my book is really about what grows the pie rather than about how we slice the pie.
And so you're right.
If a bunch of people show up in the country and they get a bunch of potatoes sent to them for free, that's my economist metaphor for wealth, then, you know, that's redistribution.
But we still need a story about whether having those people there are adding at least some potatoes, right?
Without a doubt, they'd be adding some.
Some of them stop businesses, some get jobs.
So to me, what I think is the real important question is not this question of whether it's not this sort of neoclassical labor economics question about supply and demand, something like, you know, some curve shifting around like that.
The real story is the institutional story and perhaps the savings story.
Right?
So what matters to me is, and what I think economists and policymakers should think about, is when new people come to the country, will they tend to make the new country at least a little bit like the country they came from?
Right?
And I think there's at least moderate evidence that tends to be going on to some degree.
My book particularly offers reasons for thinking that if immigrants have come in with lower test scores than the average in the country, then they're going to, unless those scores come up pretty quickly, they're going to bring those cognitive skills into the voting booth and into the government bureaucracy.
And that's the real channel that I think deserves much, much more attention than this short-run labor supply story.
Because like I said, the labor supply stuff has been looked at endlessly.
Effects seem to be small to modest.
Maybe you can find a story where something big has been overlooked.
You talked about a pot of gold.
Why not look where the pot of gold is intellectually, which is institutions?
Where do good institutions, low corruption, decent government, long-run thinking come from?
Well, okay, now if, because one of the challenges, of course, is that, and we've had Jason Richwine on the show talking about this, In America, there's a consistent lack of economic progress across generations since immigration.
So this is for Mexican-Americans in poverty, not for all groups, of course.
So Mexican-Americans in poverty as of 2000, second generation 17%, third generation 14%, but fourth plus generation 21%.
Now, the degree to which IQ is going to drive economic success, at least in a country that was developed in a relatively high IQ environment for high IQ people, It would seem to me that whether it's culture or genetics, if there is a regression to the meaning over time, then there's going to be a challenge in that, you know, a big influence when I was growing up with a friend of mine's father who came from a country he refused to refer to as Iran.
He would only call it Persian because he was old school.
And he was a brilliant guy, a wonderful, warm-hearted guy, a professional and great contributor to his community.
But of course, he would be the person who would least be able to abide the growing theocracy in Iran.
So he would be the one, the highest IQ people in Iran would leave Iran and come to, say, America.
In this case, this was Canada.
And so everyone says, wow, those Iranians are fantastic.
You know, they come in and they start jobs and so on.
But that's very much the cream of the crop.
My concern is twofold.
One is that if there are genetic or strong, you know...
term effects of IQ, whether it's genetic or cultural, then what happens is as successive waves come in, you get lower and lower quality people in terms of IQ, which is going to cause problems.
That's number one.
And number two, of course, is that there are less high IQ people in the countries they're coming from who can successfully reform and bring sort of more free market or liberal activity to their own countries.
Let me switch by talking about a country, a region of the world close to Persia, which you just mentioned, right?
The Gulf states.
So the Gulf states, many of them have these guest worker programs, right?
So I visited Bahrain a few years ago and I got to see a lot of the diverse guest worker communities while I was visiting there.
And Look at what makes their migration story so much different from the North American and now the Western European migration story.
Those Gulf countries have clearly solved the credible commitment problem about whether those migrants are going to become citizens.
Right?
And as a result, I think you're much less likely to hear the stories about how these migrants are going to change our economy, they're going to take jobs, whatnot.
The folks who are coming there are very clearly there for a short time, they don't get citizenship, they don't have voting rights, even whether or not voting rights exist in that country, and then they often get shipped home, right?
So that kind of story seems to get you the benefits of migration, which is like you get a lot of workers.
They might push down some people's wages, but I'd like to see a study showing whether that actually is going on or not.
But they're clearly not likely to have an effect on the domestic political institutions.
They're clearly not likely to reduce the overall savings rate in the country.
And I think the experience, the guest worker programs of the Gulf states and to some extent in Singapore are, if you spend as much time thinking about that as you do about North American migration of low-skilled migrants, you start realizing, no, the difference really is politics.
It's much less economics and much more politics that probably matters for the effects of low-skilled immigration.
Well, and that's certainly true.
And of course, you know, the old argument, which has now become almost a cliche that America is a nation of immigrants.
And it's true, of course, but America was a nation of immigrants before there was a redistributionist welfare state, at least.
There were these friendly societies and people would give private charity to each other and there were collective bargaining arrangements for health care and so on.
But I do think that, and this is a point scarcely original to me, Milton Friedman brought it up many times, that you can have open borders or you can have a welfare state, but you can't have both because the self-deporting of people who can't make it in a high IQ society would automatically cull the lower IQ less successful people from the country as a whole.
But when people are coming for resources that they don't have to directly earn and they can also stay and get more money for having more kids from those resources, again, if there are genetic components to IQ, I do see there going to be a growing schism and incompatibility between a low IQ culture sheltered from the market by state power and a high IQ culture that I do see there going to be a growing schism and incompatibility between a low IQ culture sheltered from the So I would modify Friedman's statement by saying you can't have open borders and an unlimited franchise.
those are the two things that can't go together right Right.
Yeah, because people on welfare are much more likely to vote for continuing or expanding the welfare state and so on.
Right?
The idea that, you know, I mean, people coming to the U.S., there are surveys of this, right?
Whether recent migrants are more or less, broadly speaking, libertarian than the average American.
The average American isn't even that libertarian, right?
So there was this nice...
I believe it's a UCI paper.
It could be UCSD. Tyler Cowen, my colleague, blogged it briefly a couple of years ago.
And it just looked through probably the GSS, the General Social Survey, checking to see political attitudes, comparing them of...
Americans to immigrants, so the first generation.
So basically, probably second-plus-generation Americans versus first-generation immigrants.
It's just a simple test.
What are their political attitudes?
Recent migrants are just less excited about laissez-faire.
Journalists are happy to tell you anecdotes.
Pro-immigration supporters, open borders activists are happy to tell you anecdotes about this guy came to America because of the promise of Friedman.
He read Milton Friedman when he was a kid and he decided he wanted to come to America.
These anecdotes are fantastic.
I love them.
They don't seem to be true on average.
I think...
As I put it in the book in one term or another, skilled voters matter.
Voting is a skill.
And if we have a lot of voters who tend to lack the cognitive skills that make you informed, I think one of the benefits of having informed voters is that you're more likely to get laissez-faire.
But even just having people who are better at monitoring government corruption, that's one of the anecdotes I have in the book from a from a nice study.
Better informed voters are just more likely to sort of kick the bums out.
And that by itself is a valuable tool to have.
So, yeah, because it keeps the politicians honest while they're in power, knowing that there's a population that would be outraged if they abused that power.
Whereas, of course, if you've grown up in a whole culture that for hundreds, if not thousands of years has accepted government corruption, you're just not going to be.
It's like a fish in water, what water kind of stuff.
Right.
All right.
Well, you know, I mean, the thing is, is that a lot of government corruption is just self-interest.
And in many settings, you think, well, economists are the ones in favor of self-interest.
Helping out your cousin, helping your brother, you know, taking a little cash out of the till.
These are things that's just, that's just rational, right?
But it's long-term.
Economics is about the long-term.
It's like nutrition.
I mean, if you just ate everything that tasted great, you'd probably die in four days, right?
But...
It's all about the long-term, short-term pains, long-term gains.
If we automatically were in that direction, we'd neither need nutritionists nor economists.
Let's end on a note of positivity.
The goal of raising IQ, I think, is one of the most important.
Well, they just raise taxes and the same thing happens.
Oh, let's just give a whole bunch of free food to third world countries.
Oh dear, that's different.
The local farmers are out of business and next time that the rain doesn't come, they're all going to starve to death.
So helping sort of third world countries, I would argue, has a lot to do with trying to help raise IQ in their environment.
I think without that, it's just a good money chasing bet.
You have some really great arguments in the book about the degree to which we can, from the outside, try and encourage policies and decisions that people can make to raise their IQ. I wonder if you could run through a couple of those just so we can give people a glimmer of hope out of the seemingly grindingly Darwinian determinism.
Sure.
Well, for instance, Sub-Saharan Africa is the last region of the world to get lead out of the gasoline.
Right?
And we all know, I mean, this is a mainstream, this is the one time you can always get progressives to talk about IQ research, is when you show them that lead brings down IQ. And it's only 2006, you point out in the book, 2006, they finally banned it, so it's going to be at least a generation or two, right?
Yes.
And, you know, we don't even know how much compliance there's going to be on this, right?
So what's going to be – I mean, it's a big continent.
It's a big subcontinent if you look at the area just below the Sahara.
So, I mean, there's clearly room for these big nutritional interventions, which still seem like low-hanging fruit.
And part of the message of my book is that if IQ really does matter six times more for nations than for individuals, then even small, crummy, mediocre reforms are likely to have big benefits.
Protein supplements you talk about.
Protein supplements, some of the simplest and cheapest things that you could hand out.
Yes.
And so, again, there aren't enough studies that are systematic about this.
And part of the reason is because people don't think IQ is all that important.
People are like, oh, it's important.
But if they really thought that my story was right and IQ is six times more important than people are normally thinking, that makes it much more important to fund this research.
Right.
I'm hoping to create, as people would say nowadays, I think that's the term, a safe space for doing IQ research, especially for doing public health research to raise IQ. Sorry to interrupt, but my frustration is that, you know, I think like yourself, it would be wonderful to help as many people in the world as possible.
But to do that, we must cast aside all prior prejudices and look and glare at the data.
And sometimes it's like staring at the sun.
You're crying.
But you have to stare at the data.
And the data shows that to raise the IQ of a country, it's a long-term goal, but it is, I think, arguably the most effective.
Sorry for that little pitch, but go ahead.
No, no.
Because, you know, as I say, basically in the first couple of pages and the last page of the book, we don't know whether we can close these gaps with current knowledge, but we certainly know that we can narrow them, at least for the poorest countries, right?
That's within the range of modern science and modern knowledge.
Some of this is going to be public health stuff.
Some of it is, I suspect...
I'm going to be Flynn type stuff where basically different education methods, different kinds of child rearing could do something.
But that's just because reading a lot of Flynn makes you think there has to be something to this.
It's not that you have a lot of great studies.
It's just that Flynn is basically a sort of one of the great, he's like a Socratic gadfly on the profession.
Again, more people should read his theories and test them.
And the third one is that it makes high-skilled immigration much more important for poor countries, right?
So if the poorest countries can find ways to bring in even moderately high-skilled immigrants to come there and stay and get involved in the politics of their countries, that will have huge positive effects.
One of the books I've been pushing the last year or so has been Howard French's book about Chinese entrepreneurs moving to Africa.
It's called China's Second Continent.
Great book, well worth reading.
But part of what he's showing is he's showing a kind of human capital transfer.
I mean, he never used the word IQ. He doesn't have any IQ test measures to talk about.
But he has people coming from a relatively high IQ culture to a culture that has lower average test scores, right?
And there's a lot of basically cultural anthropology in the book showing you the course of cultural conflict and showing you how just having a couple of pretty sharp entrepreneurs in a town can kind of change the local economy.
Yeah.
So, you know, there is some talk about the brain drain.
You know, there's big academic research on the brain drain.
I don't want to go into all that right now.
But it does seem as though if the countries with the lowest test scores could encourage high human capital migration, whether you call it IQ tests or bringing in people with master's degrees in engineering, whatever euphemism you want to use, that's probably going to yield big benefits, especially if you can integrate people into the political system.
Yeah, and as you point out, things like breastfeeding, the mother exercising while the baby is in utero.
I've also got researchers on here talking about that if you don't spank your kids, you can aim them up on the IQ scale a couple of points and so on.
And these are, you know, it's tough.
These are all deferral of gratification for habitual parents, which is tough to get traction.
In an average IQ 70-75 population, but these are things that can be done.
And of course, for me, if you can start to raise the IQs in sub-Saharan Africa, you'll create a giant vacuum where workers will be that much more valuable.
You'll start to get more investment, which brings more resources.
You know the virtuous cycle of all that goes.
But right now, there's a reason why people aren't building their factories in sub-Saharan Africa, but rather heading over to China because there's a higher IQ population as a whole.
And I think that there's so much more that can be done, but until people recognize these IQ disparities, it is so frustrating to see how many missed opportunities and opportunity costs of everything that's spent versus everything that's not in the region.
Yeah.
Five IQ points would change the world.
If you could raise the average IQs in the lowest-scoring countries by five points, wait 20 years, wait 30 years, it would be so obvious everyone would notice it.
Right.
Okay.
Well, listen, I'm not going to give any more teasers from the book because I don't want people to feel like...
But I will hold it up right now.
Yeah, yeah, yeah.
Okay, so we'll put a link to it below.
But for those who are just listening, you've got to get the book.
We'll put a link to it below.
And again, you can get it hardback.
You can get it in Kindle and so on.
Is there an audiobook version?
I didn't see that.
No, if a few more people ask through audible.com, I think we'll get one.
I've had quite a few requests so far.
Fantastic.
All right.
Well, I hugely appreciate your time, energy, and attention.
And, you know, for those who are not in academia or floating around this field, I also applaud your...
I've been into it since the bell curve in the 90s, but people don't know just how challenging this can be.
It's one thing to listen to it in a show, but, you know, just try bringing it up with people and you'll see how explosive a topic it can be.
And I think that's one of the reasons we need to walk towards it, because I think it is the area where we can have the greatest impact in the long run, because all the short-term solutions seem to be falling on their face.
Yeah, thanks so much for writing the book.
It's been a pleasure.
Hopefully we'll get some people out here and we'll get you back on again at some time if you like.
It was a really enjoyable chat.
It was a pleasure.
Thanks.
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