Thursday, July 26, 2007

Do Smart Guys Tell Better Jokes?

In the wake of the recent blog brouhaha over IQ and the Wealth of Nations I have been thinking about the general connection between intelligence and income.

My interpretation is that many people find it natural to conclude that IQ causes macroeconomic growth because IQ appears to cause microeconomic success. High IQ people are richer people, on average.

While I am sure that many smart people are quick to assert that their intelligence is what got them where they are, are we so sure? Height is correlated with individual success. I willing to bet height is also correlated with economic growth. And, we know that there is a height “Flynn effect.” That is, people have been getting taller over time. Do we think height causes growth?

The height correlation is usually settled by noting that height is a general sign of health and fitness, thus the correlation with macroeconomic growth, and therefore tall people are more likely to be chosen as spouses of successful people. Rich men and women have a greater choice in spouse and they tend to choose taller ones. Therefore, height and the genetic or cultural traits that produce wealth are commingled.

Could the same thing be true with IQ? That is, are smarter people more likely to be chosen as spouses to the rich and powerful? Now one possibility is that intelligence is just out and out attractive. Some people may agree with that conjecture.

Another, however, is that intelligent people are more likely to land a successful spouse because they are more clever at the dating game. My pet theory is that the human brain evolved through sexual selection. It’s just too big and mostly useless to have come about any other way. Looking at the monstrous and dangerous thing sitting a top most people’s shoulders one cannot help but be reminded of the Irish Elk.

It wasn’t so much that we impressed each other with our big brains, but that those brains busied themselves with devious plots to ensnare the objects of our affections. Most of us are aware of the modal thought among men and I would reason a guess that the modal thought among women is the dissection of the thoughts and intentions of men.

It seems possible then that IQ may simply be commingled with the attributes that produce success. My guess is that those attributes have more to do with perspiration than inspiration.

10 comments:

Gabriel M said...

I take it you didn't saw this...

http://marek-hlavac.blogspot.com/2007/07/something-to-boost-your-self-confidence.html

dWj said...

I saw a reference recently to a study suggesting that, in fact, hight correlates with IQ and that, if you use IQ to predict wealth, hight provides no additional help. For what that's worth.

Charles Murray insists the link between IQ and wealth has strengthened over the last century.

Anonymous said...

I think growth may raise height, but height would not raise growth. In other words, there is likely a Flynn effect with height. However, I dont think the Flynn effect is a first order effect.
I think any theory positing a causal rel. from height to growth will collapse given Asian. Asians are below average on height yet, centuries ago, were the most economically successful. And I guess we aint seen nothing yet.

Steve Hsu said...

I think all economists should be required to work in a technology startup for a short time, so they can see how innovation works and how dependent it is on brainpower. Not that the ability to innovate is 100% correlated with IQ, but it *is* positively correlated.

Of leading economists, it seems only Schumpeter really understood how entrepreneurism and innovation work and how central they are to the economy.

Finally, have a look at Gottfredson's work on IQ and ordinary life outcomes/capabilities. The US Army realized long ago that the ability of recruits to master basic skills tails off drastically below a certain IQ threshold, and they obtained an exemption from Griggs vs Duke Power that allows them to screen applicants based on IQ (AFQT). You can extrapolate easily that the general efficiency of a society may have something to do with average IQ.

http://www.udel.edu/educ/gottfredson/

Karl Smith said...

Not that the ability to innovate is 100% correlated with IQ, but it *is* positively correlated.

What's important here, however, is that this doesn't necessarily imply that within country industrial growth is correlated with IQ.

For example, for whatever reason Toyota's management and efficiency processes were superior to its American competitors, but Toyota didn't just grow the Japanese economy, Toyota grew the American economy by building plants here and infusing TQM into the American landscape.

The same thing is true with Capital Investment. The Japanese save and invest far more than American's but that investment happens here in the US and it is the US economy that is dynamic and surging, not Japan's.

You can extrapolate easily that the general efficiency of a society may have something to do with average IQ.

Well, yes of course it might. The question is whether or not it does. And this is not so clear. One feature of the Army, that is often similar to start-ups, is that it operates in a winner-take-all or at least winner-take-a-lot environment.

This means that outmaneuvering the competition is key. Economic growth in general is different. What we are missing is large scale investment and capital deepening, not winning industries.

In other words, the question is not why Latin American, African and South Asian businesses are not dominating the world sense, but why dominate business aren't taking advantage of Latin America, Africa and until recently South Asia.

Or to put a finer point on it, the question is why aren't there more sweatshops in Africa? Not why aren't there more research parks.

Anonymous said...

The belivers in IQ would agree that persperation(hard work) is more important but that persperation (hard work) correlates with IQ and that persperation (hard work) an dthings like delayed gratification (which hard work is a type of) may be caused by IQ.

Anonymous said...

I believe it is difficult to isolate the causation effect of height and economic growth. Which causes which? Could it be that economic growth makes subsistence level people have better diets and thus grow taller? or is there a selection effect where choosing a taller partner (more productive maybe) results in the next generation being more productive and that way lead to economic growth?

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