The Smart Fraction theory of IQ and the wealth of nations

I was hoping that we could continue our discussion of human biodiversity. I brought some fascinating data from the Summer 2001 Mankind Quarterly. In the article, National IQ and Economic Development: A study of Eighty-One Developing Nations, Richard Lynn and Tatu Vanhanen expose a relationship between national wealth and IQ. I brought a table of their data, but you can see the relationship best in a graph (Figure 1).

It has sexy graphs.

Dat mass.

Notice how GDP is positively correlated to average IQ. The correlation coefficient is 0.733, IQ explaining 54 percent of the GDP variance. Values this large are rare in social science. ….

Prodigy.  That’s because the relationship between per capita GDP and mean IQ is not linear. The fit is the best that can be obtained with a line.

Estraneo.  Is nonlinearity important?

Prodigy.  Correlation indicates the degree of linear association between variables. Because, the relationship is nonlinear, the value 0.73 actually underestimates the strength of the relationship. …

Thus, for a technologically sophisticated society, SFT asserts that a nation’s per capita GDP is determined by the population fraction with IQ greater than or equal to some threshold IQ. Consistent with the data of Lynn and Vanhanen, that threshold IQ is 108, a bit less than the minimum required for what used to be a bachelor’s degree. Figure 3 illustrates the fit of (3) to the data of Lynn and Vanhanen.

Saturation is probable, dwindling marginal utility of sorts.

World IQs have been increasing at the rate of 3 IQ points per decade (the Flynn effect). If that trend continues [DS: and is valid], countries now in the mean-IQ neighborhood of 100, will near smart fraction saturation in about a century.

Directionality is considered.

Estraneo.  There has been something gnawing at me for a while now. Just because national wealth and IQ correlate across different countries, we cannot infer which causes what. Smart Fraction Theory would fit the data just as well if national wealth led to high IQ rather than the other way round.

Prodigy.  You are correct, Estraneo. We need to look elsewhere for evidence that fixes the direction of causation. Independent studies of monozygotic twins reared apart provide some help. At least four major studies have been conducted with remarkably consistent results. They find about 70% of the variance in IQ is associated with genetic variation. Bouchard et al, Science, Oct 12, 1990, present an excellent review of these studies. Closer to the present context, we can look to the clever experiment of Charles Murray (Income Inequality and IQ, AEI Press, 1998). Murray studied biological sibling pairs selected such that the siblings in each pair differed significantly in IQ, but were reared in the same home by the same parents. Controlling thus for environmental factors, Murray found earnings stratified conspicuously by IQ.

There is much more, Estraneo, but two nails are sufficient to fix the direction of a one-way sign. The arrow of cause points mostly from IQ to income, and not the other way round.

1. Be civil. 2. Be logical or fair. 3. Do not bore me.

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