Thomas Jackson, American Renaissance, December 2002
Richard Lynn and Tatu Vanhanen, IQ and the Wealth of Nations, Praeger Publishers, 2002, 298 pp.
Why are some countries rich and others poor? Why are some pleasant and well-run while others are pestholes? This question has attracted attention since at least the mid-18th century, when Montesquieu noted in De L’Esprit des Lois that rich countries were in the temperate zones and poor countries were in the tropics.
In earlier times it was common for the people of better-favored nations to assume that if a country was poor it was because its inhabitants were inferior. Mid-way through the 20th century, straightforward thinking of this kind fell out of fashion, in favor of complicated economic and even psychological theories of development. IQ and the Wealth of Nations marks a return to a simpler, more realistic view: that populations differ in average mental ability, and economic achievement reflects these abilities.
Both authors of this important study are well known to AR. Richard Lynn, Emeritus Professor of Psychology of the University of Ulster, Northern Ireland, has written several books reviewed in AR, including Dysgenics: Genetic Deterioration in Modern Populations and Eugenics: A Reassessment. He has also written for AR, most recently a summary of his innovative work on racial differences in tendency towards psychopathic personality. Tatu Vanhanen is Emeritus Docent of Political Science of the University of Helsinki, Finland. His remarkable book, Ethnic Conflicts Explained by Ethnic Nepotism, was reviewed in the June 2002 issue. Both authors are unconstrained by racial taboos, and are therefore able to offer a convincing explanation for national wealth differences.
Previous theories have assumed that all populations are equally intelligent and hard-working, and that it was only a matter of time before all countries grew rich. According to “convergence theory,” for example, poor countries needed only to copy the achievements of the West. Since they would not have to bother with the uncertain work of innovation they would soon catch up.
For a long time, Marxists argued that capitalism could enrich some countries only by impoverishing others. The authors quote from a book, Development and Underdevelopment, published as recently as 1998: “[T]he gap between rich and poor ultimately will disappear, but only when the capitalist world system that has been in place since the sixteenth century itself disappears.” Some anti-capitalists endorsed the absurd view that poor countries could develop only by completely cutting themselves off from world trade and world markets.
There have also been theories about the influence of “culture:” Lucky whites got a good one, while blacks got a bad one. The culture argument has proven to be admirably adaptable. Back in the 1950s, when China, Korea, and Taiwan were poor, it was fashionable to blame the stifling effects of Confucianism. Now that these countries are growing rich, it is fashionable to credit the discipline and orderliness of — Confucianism. Some people have also proposed that hot weather slows people down and prevents development, but this theory doesn’t explain why Chinese have been so successful in Singapore and how whites managed to build an industrial economy in South Africa.
One of the better theories of development was that government intervention was the problem, and that free markets would drag the poor out of poverty. Communism proved that regulation hobbles development, but in the poorest countries, what passed for government had no power to regulate anything. Markets were free, but the people were still poor.
In the 1960s and 1970s, newly independent Third-World countries were going to be laboratories for all these exciting theories, and uplift artists swarmed the tropics promising great things. The uplift artists have come home, their theories in tatters, and with many former colonies poorer than when they were run by whites. The whole field of “development theory” has been more or less silenced by lack of success.
The Role of Intelligence
Prof. Lynn and Prof. Vanhanen explain that the average intelligence of the population predicts national income better than any other demographic characteristic. They note that within individual countries, income and intelligence are closely correlated: smart people generally make more money than stupid people. It would be surprising if this association between intelligence and wealth did not apply to nations as well.
In developed countries, approximately one quarter of children either rise above or sink below the socio-economic level of their parents, and IQ measured at an early age best predicts which children will rise or fall. People of high intelligence do even simple jobs better than the less intelligent, and the association between IQ and job proficiency increases dramatically with more demanding jobs. Even the US military has quietly accepted the fact that even donkey work requires a minimum level of intelligence: It does not accept anyone with an IQ lower than 80.
Intelligence influences more than jobs. The chart below, which summarizes data presented in The Bell Curve, shows that IQ levels are excellent predictors of many important outcomes. Intelligent people tend to make their way through life more successfully than the unintelligent. As this chart, which summarizes data for whites shows, Americans in the highest range of intelligence have essentially no chance of dropping out of high school, going to jail, or being poor.
Intelligence can make a life-or-death difference. Low IQ people not only fail to look after themselves, and are therefore more likely to die of accidents and preventable diseases; they are also more likely to neglect or kill their own children — and each other.
Within the same country bright people tend to live in desirable places and dim people in less desirable places. Their neighborhoods differ dramatically, just as the texture of life differs dramatically from one country to another.
The authors have collected a huge amount of data on national IQ and national income that suggest a powerful association between the two. Cross-national comparisons of intelligence and income are not easy or always accurate, but the authors have carefully documented their exhaustive search for what appear to be the most meaningful data available. They have also presented reaction-time data for the limited number of countries for which it is available. These are the records of the speeds at which people perform certain simple physical activities known to specialists as “elementary cognitive tasks,” (see AR’s review of The g Factor), and they correlate strongly with results from paper-and-pencil IQ tests.
National IQ findings reflect the very ample data collected in the United States and around the world on racial differences. African IQs are consistently low, while in Latin America IQs range from a high of 96 in Argentina and Uruguay, where the populations are mostly white, to about 80 in Guatemala and Ecuador, where most of the population is Indian or Mestizo. Hong Kong gets top score, with an average IQ of 107. Given the very high IQ scores of American Jews, the score for Israel is a surprisingly modest 94, doubtless brought down by Sephardic Jews.
For the 82 countries for which good IQ and national income data are available, the authors find a relationship between intelligence and GDP per capita. There is a strong positive correlation, as indicated by the sloping trend line. There is nothing surprising about the finding that more intelligent populations are richer than less intelligent populations. It is the “outliers,” or countries that fall well above or below the trend line that are most interesting.
Only a few of the countries on this chart are named, but in the text the authors provide careful analysis of all the data. The former Communist countries, for example, are much poorer than one would except from the IQs of their populations. China, especially, has been held back by its backward economic system, as has North Korea. In 1950, North Korea had a per capita GDP that was about 73 percent that of South Korea. The North languished under Communism while the South embraced capitalism, and by 1990, the north had only 25 percent the per capita income of the South. Because Koreans are all essentially the same stock, it is clear Communism impoverished the North. Presumably Eastern European countries were held back to much the same degree.
Some countries are well above the trend line, meaning their incomes are higher than would be justified by national IQ. Qatar and Saudi Arabia are easy to understand: Their wealth derives from natural resources exploited with the help of outsiders. South Africa is wealthier than it should be because its economy was run by whites. As blacks continue to take over, and as whites leave, its per capita GDP can be expected to fall.
The authors find that as a rule, no country with an average national IQ lower than 90 can sustain a complex, industrial society. Average IQ is important not only because a generally high level of intelligence provides the basic mental infrastructure of a country but also because the higher the average IQ, the larger the percentage of people with IQs in the 130 to 160 range, who provide the real leadership of most countries. However, once the threshold of 90 is cleared, average national IQ loses much of its power to predict wealth. With an average IQ of 98, for example, the United States has a considerably lower score than South Korea at 106, yet it enjoys a much higher national income. All the countries to the right of the United States on the chart have higher IQs but less income. The United States has benefited from size and natural resources, and from an economic system that encourages growth.
The authors find that as countries change from older forms of government to free-market democracies, the correlation between intelligence and wealth becomes stronger. Using historical data, they find that in 1820 the wealth/IQ correlation was only .540, whereas the correlation in the chart above indicated by the trend line is a considerably stronger .72. In the past, countries with similar IQs might have had vastly different levels of wealth because they had very different political and economic systems. As the rules for gaining wealth became better known, and more countries tried to follow them, differences in performance become more constrained by intelligence, and similar countries achieved similar levels of wealth.
The historical data make this clear. In the 1950s and 1960s, Americans were much richer than the equally high-IQ populations of Europe and North Asia. The reason is that even setting aside the effects of the world wars, countries outside America were not as well organized for producing wealth. Americans still enjoy a wealth advantage, but it is not nearly so great. The gap should continue to narrow as North Asia and Europe — including the former Communists countries — adopt free markets and their people reap the benefits of their intelligence. This is an example of the “convergence” the optimists spoke of, but it requires populations of similar intelligence. Asians have shown themselves quite capable of absorbing and even improving on the technology of the West. Africans cannot even understand it well enough to use it.
The authors point out that, consistent with their high national IQ, the Chinese were well ahead of Europeans culturally and technologically in every period of history up until about the 15th century. They speculate that Europeans pulled ahead only because they began to understand free markets, a concept only now gaining acceptance in China. The authors note also that democracy often comes along with free markets but is not nearly as important for economic growth. Korea, Singapore, and Taiwan are good examples of countries that used markets to great advantage and did so without the messiness of democracy.
Japan was held back by internal regulation and several centuries of self-imposed isolation from the rest of the world. However, after Commodore Matthew Perry opened the country by force in 1853, it performed one economic miracle after another, and with its 1905 victory over the Russians became the first non-white power to defeat a white nation in modern times. The Japanese needed no foreign aid; once their country was open to the world, they quickly absorbed the ideas and technology they needed to become a world power. Democracy was imposed on them only after 1945. Once China shakes off the last remnants of a planned economy it will have even greater potential to grow into an economic and military power. Continued authoritarian control is not likely to diminish this potential greatly, once China establishes efficient markets.
As the authors point out, people in developed countries have thought for so long in terms of eventual equalization of wealth that they are terrified by any other kind of analysis. Development economics is as willfully blind to racial differences as the other social sciences, and its policy prescriptions have been just as wrong-headed. A realistic view of racial differences would have led to different North-South relations just as it would have led to different domestic race relations. Independence was inevitable for many Asian countries, but race-realist metropolitan powers would have known their African dependencies were not capable of self-government. Race-realist native leaders would have understood that prosperity required European tutelage, and continued direction by whites would have spared black Africa many horrors.
If the West had better understood race, the history of southern Africa would have been dramatically different. Apartheid and minority rule might not have continued unchanged, but there would have been little international pressure on Rhodesians and South Africans to hand over their countries for destruction.
The authors themselves do not draw these conclusions. They have little to say about the fact that the poor we will always have with us. They do suggest that rich countries could subsidize contraception for the poorest people in the poorest countries in the hope of raising national IQ, but they are not optimistic this will happen. For the most part they simply accept that nations, like people, are unequal, and that any effort based on contrary assumptions is largely wasted. The West once understood this, and did not expend its treasure and sentiment on causes that usually make things worse. IQ and the Wealth of Nations is an important step back towards common sense.