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Does IQ Determine the Wealth of Nations?

Mises Daily: Monday, August 20, 2007 by

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[IQ and the Wealth of Nations, by Richard Lynn and Tatu Vanhanen. Praeger, 2002, 298 pages.]

IQ and the Wealth of Nations attempts to make a serious, scholarly case for the thesis that the great variation presently observed in the per capita wealth of the nations of the world can be explained largely as the effect of the differences in inherited mental capacity existing between prosperous and impoverished countries.

Further, the authors suggest that this "intelligence gap" can only be closed quite slowly, if at all, so that efforts to aid the poor of the Third World must accept "that the gap between rich and poor nations will inevitably persist for the indefinite future" (p. 196). Therefore, they conclude, "the world needs a new international moral code based on the recognition of significant national differences in human mental abilities… The populations of the rich countries may have to accept that they have an ethical obligation to provide financial assistance to the people of the poor countries for the indefinite future…" (p. 196).

If the authors central contention is correct and if they have drawn the right policy conclusions from their theory, then the consequences are indeed profound: the hoary and long moribund notion of "the white man's burden" gains a new lease on life (although, per this work, it will have to be re-christened as "the white and East Asian man's burden"), and the inhabitants of the Third World are destined for lives of perpetual dependency, fated never to reach the age of majority or real independence. Since the implications of this book are so profound, it seems appropriate to scrutinize its contents carefully, to see if the arguments it presents hold up under critical examination. And so we shall proceed.

Lynn and Vanhanen launch their case by reviewing several rival suggestions about the chief causative agent determining the widely differing levels of prosperity evidenced by the nations of the world. While they grant some alternatives a degree of plausibility, such as the economic argument for free markets, allowing that they may describe contributing factors working alongside their own horse in the race, of others they are entirely dismissive. For instance, in considering Jared Diamond's thesis that geographical contingencies have been of primary importance in determining the course of economic history, they write, "[His] theory has a number of obvious weaknesses. First, in sub-Saharan Africa there are wild plants that could have been domesticated, such as sorghum, millet, yams, and rice, and wild animals that could have been domesticated, such as guinea fowl, zebras, giraffes, buffalo, and wildebeests. The reason these animals were not domesticated is because people did not put effort into domesticating them" (pp. 3-4). The authors apparently picture precolonial Africans as sitting around on the stoops of their housing projects, drinking their forty-ounce cans of malt liquor, and waiting for the white man to finally arrive with their welfare checks.

But Lynn and Vanhanen do not seem to have actually read the author they are "critiquing," for Diamond has pre-answered their complaint at some length. I will only cite a few excerpts of his answer, but those should be sufficient to demonstrate our authors' sloppy scholarship. On the question of the African buffalo, which is not only a different species from the (successfully domesticated) Asian water buffalo but is in an entirely different genus, Diamond writes: "But the African buffalo is considered the most dangerous and unpredictable large mammal of Africa. Anyone insane enough to try to domesticate it either died in the effort or was forced to kill the buffalo before it got too big and nasty" (1999, p. 171). And what about the zebra? "Africa's four species of zebras are even worse…. Zebras have the unpleasant habit of biting a person and not letting go. They thereby injure even more American zookeepers each year then do tigers! Zebras are also virtually impossible to lasso with a rope…" (1999, pp. 171-172). Wildebeests are similarly unsuitable for domestication.

And what of the other five species that our authors' chastise Africans for not domesticating? As extensively documented in Diamond's book, every single one of them — sorghum, millet, yams, rice, and guinea fowl — were domesticated by Africans, along with cowpeas, peanuts, cotton, watermelons, and bottle gourds! Given that no new African species have been successfully domesticated since the mass arrival of Europeans on the continent, it is likely that Africans domesticated every suitable species at hand! The authors' claim that they "did not put effort into [it]" appears to be nothing more than anti-black propaganda. The authors also note the "east-west axis of approximately 4000 miles from Senegal and Guinea to Ethiopia and Somalia" (p. 4), as if Diamond had not addressed that challenge to his theories at all, when, in fact, he takes it quite seriously.

"The authors apparently picture precolonial Africans as sitting around on the stoops of their housing projects, drinking their 40-ounce cans of malt liquor, and waiting for the white man to finally arrive with their welfare checks."

After reviewing alternative explanations for the differing wealth of nations, Lynn and Vanhanen proceed to expound the superiority of their own thesis. They offer their evidence for the importance of inherited factors in determining IQ, but here seem to commit a elementary statistical error. They cite a study concluding that the IQ correlation between identical twins raised separately is .75. But then, "assuming that the test has a reliability of .9… the corrected correlation between the twin pairs is .83" (p. 24). It is true that a test only 90% reliable could understate a correlation by 10%. But it could also overstate it by a similar amount. Why conclude that the high end of the error range represents the true figure, other than the fact that it bolsters one's preconceptions?

Nevertheless, there is apparently considerable scientific evidence that genetic factors are a quite significant influence on an individual's measured IQ. However, the authors erroneously leap from their (perhaps defensible) contention that about 80% of an individual's IQ is dependent on genes to the non sequitur of asserting that the same percentage of genetic influence can be assumed for a nation's mean IQ. They fail to realize that, even if within a culture the bulk of IQ variation is due to genetic endowments, it might also be true that the variations between cultures arise predominantly from environmental circumstances. I offer an analogous, but perhaps less loaded, situation, which I hope is sufficient to demonstrate this point. Imagine two countries, Freedonia and Sylvania, in each of which it is found that the range of skiing ability existing within that nation's population is largely explained by inherited traits. Even so, if it is the case that Freedonians live in snowy mountains, while the Sylvanians inhabit a steamy jungle, the best explanation for the existence of a large gap in skill between the mean Freedonian skier and the mean Sylvanian skier is likely to be environmental.

Lynn and Vanhanen are also guilty of positing "heredity" and "the environment" as completely independent variables. Although at times it may be convenient to isolate the influence of these two abstractions, the reality is that they are inseparable sides of a single coin: changing environmental conditions deeply impact genetic developments, just as organisms with novel adaptations alter their own surroundings.

If we examine the prospects of a typical Western European woman around 800 AD, it should be apparent that securing a mate with a high IQ conferred minimal benefits: she, her husband, and their progeny were all fated to be peasant farmers, living lives in which a strong back was likely to be more useful than a nimble mind. But, as urban life in Western Europe revived, trade and commercial acumen grew in importance, and intellectual pursuits gained in esteem, it became increasingly advantageous to choose an intelligent spouse. Therefore, the relatively high average IQ found in that region today may be more the result than the cause of the growing complexity and material well-being characterizing recent, Western European social life.

And, if the interplay of circumstances and intelligence is thus conceived, the fact that the leading edge of human civilization has thrust forward now in one area among one people, now in another region embodied by some other nation, is far less mysterious than it should appear to Lynn and Vanhanen. How, using their theory, can they explain that three of the four "cradles" of civilization appear as low-IQ locales in their data, and, therefore, as improbable torchbearers in mankind's advance?

"Lynn and Vanhanen are also guilty of positing 'heredity' and 'the environment' as completely independent variables."

The authors' hypothesis that it was the challenges to human survival presented by cold, northern winters that resulted in higher IQs in Europe and East Asia is also inconsistent with the inconvenient locations of the first civilizations. Every foundational culture — the Egyptians, the Mesopotamians, the Indians, the Chinese, the Incas, the Mayans — arose in an area where winters were either mild or essentially non-existent, whereas, per our authors' proposal, we should expect that civilization would first appear in Scandanavia, Siberia, and Canada. But in the recalcitrant world of historical reality, those places were quite the latecomers to civilized society, and their entrance therein did not take place until the influence of the tropical and semi-tropical trailblazers made its way to their laggard climes.

Lynn and Vanhanen attempt to support their contention that western IQ tests are culturally neutral by correlating several nations' mean IQs with studies of the same populations' mean reaction times. The time it takes a test subject to respond to a light flashing, they argue, surely is not culturally dependent. However, their own data here seems to weaken, rather than bolster, their case. While it is true that the rankings of the four sample countries are the same in both tests, the lowest national IQ they present is 59% of the highest, but the best mean reaction time is only 10% better than the worst. To me, that suggests that current IQ tests significantly over-estimate whatever basic variation in mental acuity exists between the inhabitants of different regions of the planet.

Another item that ought to prompt the thoughtful reader to question the very large discrepancy in intelligence that the authors assert to exist between various human sub-populations is the extraordinarily low average IQs assigned to many African nations. For example, the authors claim that the mean IQ in Equitorial Guinea is only 59, well shy of the threshold score of 70 below which the testee is classified as mentally retarded. Anyone who has spent significant time with an American or a European whose IQ is that low (as I did for a year while assisting in a special education program) can attest that such an individual is not capable of independently managing his own life, and will require constant caretaking to get on in the world.

How could an entire society where the average member has so little ability to cope with reality possibly endure? The most obvious answer is that an IQ of 59 has a quite different significance when measured for a westerner than it does for a central African. If that were not the case, the plain fact of the continued existence of the people of sub-Saharan Africa would seem to be something of a miracle. It is undeniable that the inhabitants of central Africa managed, somehow, to survive there for millennia while living outside of supervised care facilities, and have even increased in number after their collision with European peoples. Their lives may have required cognitive skills quite distinct from those most useful to Europeans or East Asians, but those skills are still exhibitions of intelligence, albeit intelligence directed towards dealing with the unique environmental challenges they faced. If that is the case, then it is no surprise that they perform poorly on an IQ test devised with a different set of mental capabilities in mind.

Lynn and Vanhanen are also guilty of a very selective use of historical data in defending their thesis. They state that "the populations of sub-Saharan Africa cannot be expected to match the rates of economic growth achieved elsewhere in the world" (p. 180); however, quite to the contrary, over recent years GDP growth in Africa has been significantly higher than the world average. Ireland appears in their tables as one of the lowest IQ countries in Western Europe, yet it now ranks fourth in the world in per capita GDP, its recent burst of prosperity lifting it well ahead of the United Kingdom, despite the much higher IQ level ascribed to the latter nation.

"How, using their theory, can they explain that three of the four "cradles" of civilization appear as low-IQ locales in their data, and, therefore, as improbable torchbearers in mankind's advance?

To be fair, the authors' IQ figures are almost a decade old; perhaps the Irish underwent a recent boom in intellectual ability as well? Isn't it more probable that the program of economic liberalization the Republic instituted shows that the benefits of freedom can more than offset any genetic handicap a country may face?

Our authors further assert that "the impact of national levels of intelligence is confirmed impressionistically by the contrast between the rapid development in the second half of the twentieth century of the nations of East Asia, with their high average IQs, and the poorer economic performance of the nations of south and southwest Asia, Latin America, and sub-Saharan Africa" (p. 23).

They seem unaware of the principle that a change in circumstances cannot be explained by a causal factor that was constant before and after the change, but only by a new causal influence. If, as Lynn and Vanhanen contend, IQ is primarily determined by genetic inheritance, then it follows that East Asians must have had above-average IQs for quite some time prior to 1950. Therefore, that factor is a very poor candidate for explaining the dramatic leap in their prosperity that has occurred since that date.

A much more plausible hypothesis is that the most crucial aspect of recent East Asian economic history is that most of the region more or less embraced free markets, while many Africa and Latin America countries were seduced by the alluring but empty promises of socialist propagandists, and succumbed to the temptation of the apparently easy path to prosperity offered by foreign aid. (To be fair to the authors, as I noted above they do acknowledge capitalism as an important factor in prosperity, and explain the discrepancy between the high IQs found in Eastern Europe and China and those regions' lagging economic performance by pointing to their socialist past.)

The authors also appear ignorant of the law of comparative advantage. In light of what they see as the important and long-lasting "intelligence gap" separating the rich and the poor nations, they declare that, in the low-IQ countries, "we should expect many … individuals to be unemployed and an economic burden" (p. 161). If they understood the principle of comparative advantage, they would realize that even the least-endowed individuals, so long as they are able to perform any work at all, will have something of value to offer their more capable brethren.

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"Whether or not some nations truly suffer from an ineradicable intelligence deficit, their best path to follow is the one of freedom."

Once the universal applicability of this fundamental finding of economics is recognized, it is clear that, even if the primary claim of IQ and the Wealth of Nations about the existence of important, genetically grounded differences in the average intelligence of nations is true, the policy recommendations the authors draw from that claim are still unfounded. Every non-invalid person, however paltry was the inheritance bequeathed to him by his genetic forebears, can engage in mutually beneficial exchanges with his fellow humans. Therefore, it is clearly preferable, both economically and morally, to encourage and aid the impoverished to discover what they can contribute to society, rather than patronizing and demoralizing them by promoting the belief that they have nothing of worth to offer others, and can only be sustained through the pity of their betters. Whether or not some nations truly suffer from an ineradicable intelligence deficit, their best path to follow is the one of freedom.

In short, 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. 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.


Gene Callahan is studying at the London School of Economics. He is the author of Economics for Real People. Send him mail. See his archive. Comment on the blog.

For Callahan's critique of Jared Diamond's Guns, Germs, and Steel, see "The Diamond Fallacy."

References

Diamond, Jared (1999) Guns, Germs, and Steel: The Fates of Human Societies, New York and London: W.W. Norton & Company.