Are Smart Countries Richer or Are Rich Countries Smarter?

0 Posted by - August 9, 2012 - Career & Business, Economics, Money

1344367738420661 fm Are Smart Countries Richer or Are Rich Countries Smarter?Untangling the relationship between national average IQ and wealth creation

Do higher IQs produce wealth, or does wealth produce higher IQs? This is the question that Ron Unz grapples with in his fascinating article, “Race, IQ, and Wealth: How Political Bias Distorts the Facts.” Unz, publisher of The American Conservative, is taking on claims made in the 2002 book IQ and the Wealth of Nations that differences in national IQ account for the substantial variation in national per capita income.

The authors, emeritus University of Ulster psychologist Richard Lynn and emeritus University of Tampere political scientist Tatu Vanhanen, sought out IQ data they believe could plausibly measure the average IQs of the people of various nations and then correlated it with GDP per capita. Their conclusion is that countries populated with smarter people are the ones that become wealthier. Countries inhabited by stupid people remain mired in poverty. Lynn and Vanhanen further conclude that the connection between IQ and wealth is causal based on studies that show for individuals that “IQs measured in childhood are strong predictors of IQs in adolescence and these are strong predictors of earnings in adulthood.” They then generalize, “From this it follows that groups with high IQs would have higher average incomes than groups with low IQs because groups are aggregates of individuals.”

In his article, Unz uses the data collected by Lynn and Vanhanen and argues that they actually show the opposite—that rising wealth boosts intelligence. In order to avoid getting stuck in the quagmire of race, Unz looks only at the IQ data for European populations. All of the data are adjusted for the universal Flynn effect in which average IQ scores have been increasing in the modern age by 2 to 3 points per decade depending on which IQ measure is used. The data are standardized such that the average British IQ at any time is set at 100.

CONTINUED at Reason. Written by Ronald Bailey.

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