IQ and the Wealth of Nations

IQ and the Wealth of Nations

IQ and the Wealth of Nations cover
Author	Richard Lynn Tatu Vanhanen
Language	English
Publisher	Praeger/Greenwood
Publication date	2002

IQ and the Wealth of Nations is a controversial 2002 book by Dr. Richard Lynn, Professor Emeritus of Psychology at the University of Ulster, Northern Ireland, and Dr. Tatu Vanhanen, Professor Emeritus of Political Science at the University of Tampere, Tampere, Finland.^[1] The book argues that differences in national income (in the form of per capita gross domestic product) correlate with differences in the average national intelligence quotient (IQ). The authors further argue that differences in average national IQs is one important factor, but not the only one, contributing to differences in national wealth and rates of economic growth. Critical responses have included questioning the methodology and incomplete data as well as the conclusions.^[2][3] The 2006 book IQ and Global Inequality is a follow-up to IQ and the Wealth of Nations by the same authors. Several other data sets of estimated average national cognitive ability exist as explained in nations and intelligence.

The book includes the authors' calculation of average IQ scores for 81 countries, based on their analysis of published reports. It reports their observation that national IQ correlates with gross domestic product per capita at 0.82, and with the rate of economic growth from 1950–1990 at 0.64.

The authors believe that average IQ differences between nations are due to both genetic and environmental factors. They also believe that low GDP can cause low IQ, just as low IQ can cause low GDP. (See: Positive feedback)

The authors write that it is the ethical responsibility of rich, high-IQ nations to financially assist poor, low-IQ nations, as it is the responsibility of rich citizens to assist the poor.

Central to the book's thesis is a tabulation of what Lynn and Vanhanen believe to be the average IQs of the world's nations. Rather than do their own IQ studies (a potentially massive project), the authors average and adjust existing studies.

For 104 of the 185 nations, no studies were available. In those cases, the authors have used an estimated value by taking averages of the IQs of neighboring or comparable nations. For example, the authors arrived at a figure of 84 for El Salvador by averaging their calculations of 79 for Guatemala and 88 for Colombia. Including those estimated IQs, the correlation of IQ and GDP is 0.62.

To obtain a figure for South Africa, the authors averaged IQ studies done on different ethnic groups, resulting in a figure of 72. The figures for Colombia, Peru, and Singapore were arrived at in a similar manner.

In some cases, the IQ of a country is estimated by averaging the IQs of countries that are not actually neighbors of the country in question. For example, Kyrgyzstan's IQ is estimated by averaging the IQs of Iran and Turkey, neither of which is close to Kyrgyzstan—China, which is a geographic neighbor, is not counted as such by Lynn and Vanhanen. This is presumably because the ethnic groups of the area speak Iranian and Turkic languages, but do not include Chinese.

To account for the Flynn effect (an increase in IQ scores over time), the authors adjusted the results of older studies upward by a number of points.

IQ estimates given in the book

Rank Country IQ estimate[4] 1  Hong Kong 107 2  South Korea 106 3  Japan 105 4  Taiwan 104 5  Singapore 103 6  Austria 102 6  Germany 102 6  Italy 102 6  Netherlands 102 10  Sweden 101 10   Switzerland 101 12  Belgium 100 12  China 100 12  New Zealand 100 12  United Kingdom 100 16  Hungary 99 16  Poland 99 16  Spain 99 19  Australia 98 19  Denmark 98 19  France 98 19  Mongolia 98 19  Norway 98 19  United States 98 25  Canada 97 25  Czech Republic 97 25  Finland 97 28  Argentina 96 28  Russia 96 28  Slovakia 96 28  Uruguay 96 28  Vietnam 96 32  Portugal 95 32  Slovenia 95 34  Israel 94 34  Romania 94 36  Bulgaria 93 36  Ireland 93 36  Greece 93 39  Malaysia 92 40  Thailand 91 41  Croatia 90 41  Peru 90 41  Turkey 90

Rank Country IQ estimate[4] 44  Colombia 89 44  Indonesia 89 44  Suriname 89 47  Brazil 87 47  Iraq 87 47  Mexico 87 47  Samoa 87 47  Tonga 87 52  Lebanon 86 52  Philippines 86 54  Cuba 85 54  Morocco 85 56  Fiji 84 56  Iran 84 56  Marshall Islands 84 56  Puerto Rico 84 60  Egypt 83 60  Saudi Arabia 83 60  United Arab Emirates 83 61  India 81 62  Ecuador 80 63  Guatemala 79 64  Barbados 78 64    Nepal 78 64  Qatar 78 67  Zambia 77 68  Congo 73 68  Uganda 73 70  Jamaica 72 70  Kenya 72 70  South Africa 72 70  Sudan 72 70  Tanzania 72 75  Ghana 71 76  Nigeria 67 77  Guinea 66 77  Zimbabwe 66 79  DR Congo 65 80  Sierra Leone 64 81  Ethiopia 63 82  Equatorial Guinea 59

In several cases the actual GDP did not correspond with that predicted by IQ. In these cases, the authors argued that differences in GDP were caused by differences in natural resources and whether the nation used a "planned" or "market" economy.

One example of this was Qatar, whose IQ was estimated by Lynn and Vanhanen to be about 78, yet had a disproportionately high per capita GDP of roughly USD $17,000. The authors explain Qatar's disproportionately high GDP by its high petroleum resources. Similarly, the authors think that large resources of diamonds explain the economic growth of the African nation Botswana, the fastest in the world for several decades.

The authors argued that the People's Republic of China's per capita GDP of roughly USD $4,500 could be explained by its use of a communist economic system for much of its recent history. The authors also predicted that communist nations whom they believe have comparatively higher IQs, including the PRC, Vietnam, and North Korea, can be expected to gain GDP by moving from centrally-planned to market economic systems, while predicting continued poverty for African nations. Recent trends in the economy of the People's Republic of China and Vietnam seem to confirm this prediction, as China's GDP has grown rapidly since introducing market reforms. South Korea has a higher average IQ and a market economy. However, South Korea still has a lower GDP/Capita than many Western nations (but relatively high overall), but South Korean economic reform started in the early 1960s and it is one of the fastest growing economies in the world. Still, South Korea went from amongst the poorest nations in the world to an advanced economy by recording one of the fastest growth rates in the world. Despite a supposedly higher average IQ and a market economy since the Meiji Restoration in 1867, Japan still has a lower GDP/Capita than many Western nations.

As is normal for books, IQ and the Wealth of Nations was not peer-reviewed before publication. However, it was published by Praeger, a publisher of scholarly and professional books. The book's authors have published many peer-reviewed articles the topics of this book, over a 30-year period.^[6] Also, peer-reviewed articles have used the IQ scores presented in the book, while a significant number have commented on the major premises of the book.

Thomas Volken, a sociologist at the University of Zurich, wrote that the study is "neither methodologically nor theoretically convincing." Although critical of the IQ data, for the sake of argument Volken assumes that the data are correct but then criticizes the statistical methods used, finding no effect on growth or income.^[7] However, using the same starting point, American economists Jones and Schneider (2006) show that IQ is a statistically significant explanatory variable of economic growth. Each 1 point increase in a nation’s average IQ is associated with a persistent increase in GDP per capita.^[8]

Erich Weede and Sebastian Kampf wrote that "there is one clear and robust result: average IQ does promote growth."^[9] Edward Miller wrote that "the theory helps significantly to explain why some countries are rich and some poor."^[10] Michael Palairet wrote that "Lynn and Vanhanen have launched a powerful challenge to economic historians and development economists who prefer not to use IQ as an analytical input."^[11] In a reanalysis of the Lynn and Vanhanen's hypothesis, Dickerson (2006) finds that IQ and GDP data is best fitted by an exponential function, with IQ explaining approximately 70% of the variation in GDP. Dickerson concludes that as a rough approximation "an increase of 10 points in mean IQ results in a doubling of the per capita GDP."^[12]

Whetzel and McDaniel (2006) conclude that the book's "results regarding the relationship between IQ, democracy and economic freedom are robust". Moreover, they address "criticisms concerning the measurement of IQ in purportedly low IQ countries", finding that by setting "all IQ scores below 90 to equal 90, the relationship between IQ and wealth of nations remained strong and actually increased in magnitude." On this question they conclude that their findings "argue against claims made by some that inaccuracies in IQ estimation of low IQ countries invalidate conclusions about the relationship between IQ and national wealth."^[13]

Voracek (2004) used the national IQ data to examine the relationship between intelligence and suicide, finding national IQ was positively correlated with national male and female suicide rates. The effect was not attenuated by controlling for GDP.^[14]

Barber (2005) found that national IQ was associated with rates of secondary education enrollment, illiteracy, and agricultural employment. The effect on illiteracy and agricultural employment remained with national wealth, infant mortality, and geographic continent controlled.^[15]

Both Lynn and Rushton have suggested that high IQ is associated with colder climates. To test this hypothesis, Templer and Arikawa (2006) compare the national IQ data from Lynn and Vanhanen with data sets that describe national average skin color and average winter and summer temperatures.They find that the strongest correlations to national IQ were −0.92 for skin color and −0.76 for average high winter temperature. They interpret this finding as strong support for IQ-climate association.^[16]

Kanazawa (2006), "IQ and the wealth of states" (in press in Intelligence), replicates across U.S. states Lynn and Vanhanen's demonstration that national IQs strongly correlate with macroeconomic performance. Kanazawa finds that state cognitive ability scores, based on the SAT data, correlate moderately with state economic performance, explaining about a quarter of the variance in gross state product per capita.^[17]

Hunt and Wittmann (in press) use data from the Programme for International Student Assessment (PISA) to conclude that "in spite of the weaknesses [in] several of their data points Lynn and Vanhanen's empirical conclusion was correct, but we question the simple explanation that national intelligence causes national wealth. We argue that the relationship is more complex".^[18]

The book was followed by Lynn's 2006 Race Differences in Intelligence, which expands the data by nearly four times and concludes the average human IQ is presently 90 when compared to a norm of 100 based on UK data, or two thirds of a standard deviation below the UK norm, and Lynn and Vanhanen's 2006 IQ and Global Inequality.^[19]

Several negative reviews have been published in the scholarly literature. Susan Barnett and Wendy Williams wrote that "we see an edifice built on layer upon layer of arbitrary assumptions and selective data manipulation. The data on which the entire book is based are of questionable validity and are used in ways that cannot be justified." They also wrote that cross country comparisons are "virtually meaningless."^[20] Ken Richardson wrote "This is not so much science, then, as a social crusade. The Pioneer Fund of America, champion of many dubious causes in the past, will obtain little credit from having assisted this one."^[21] Thomas Nechyba wrote of "relatively weak statistical evidence and dubious presumptions."^[22] Astrid Ervik asked "are people in rich countries smarter than those in poorer countries?" and concluded that "the authors fail to present convincing evidence and appear to jump to conclusions."^[23]

Jared Diamond's Guns, Germs and Steel (1997), while obviously not mentioning the later published book by Lynn and Vanhanen, argues that historical differences in economic and technological development for different areas can be explained by differences in geography (which affects factors like population density and spread of new technology) and differences in available crops and domesticatable animals. Richard Nisbett argues in his 2004 The Geography of Thought that some of these regional differences shaped lasting cultural traits, such as the collectivism required by East Asian rice irrigation, compared with the individualism of ancient Greek herding, maritime mercantilism, and money crops wine and olive oil (pp. 34–35).

There is controversy about the definition and usage of IQ and intelligence. Also, it is generally agreed many environmental factors can affect measured IQ.^[24] The authors agree on this, in particular for the importance of nutrition and health for IQ, but also more controversially argue for a large genetic contribution. See also race and intelligence.

Finally, the Flynn effect may well reduce or eliminate differences in IQ between nations in the future. Using the IQ values of today the average IQ of the US in 1932, according to the first Stanford-Binet standardization sample, was 80.^[25] Some predict that considering that the Flynn effect started first in more affluent nations, it will also disappear first in these nations. Then the IQ gap between nations will diminish. Richardson (2004) argued, citing the Flynn effect as the best evidence, that Lynn has the causal connection backwards and suggested that "the average IQ of a population is simply an index of the size of its middle class, both of which are results of industrial development".^[3] However, even assuming that the IQ difference will disappear among the babies born today, the differences will remain for decades simply because of the composition of the current workforce.^{[citation needed]}

In a book review in the Journal of Economic Literature, a journal of the American Economic Association, Thomas J. Nechyba wrote that: "(the book's) sweeping conclusions based on relatively weak statistical evidence and dubious presumptions seem misguided at best and quite dangerous if taken seriously. It is therefore difficult to find much to recommend in this book."^[26]

Writing in the Economic Journal, published on behalf of the Royal Economic Society, Astrid Oline Ervik states that while the book may be "thought provoking", there is nothing that economists can learn from it. She criticizes the book for a number of reasons; that the authors don't establish cross country comparability and reliability of IQ scores, that they rely on simple bivariate correlations, that they do not consider or control for other hypothesis, and that they confuse correlation with causation. The author states "The arguments put forward in the book to justify such (international IQ) comparisons seem at best vague and unconvincing. At worst, passages in the book appear to be biased and unscientific." and concludes that "the authors fail to present convincing evidence and appear to jump to conclusions."^[27]

The figures were obtained by taking equally-weighted averages of different IQ tests. The number of studies is very limited; the IQ figure is based on one study in 34 nations, two studies in 30 nations. There were actual tests for IQ in 81 nations. In 104 of the world's nations there were no IQ studies at all and IQ was estimated based on IQ in surrounding nations.^[2]

Studies that were averaged together often used different methods of IQ testing, different scales for IQ values and/or were done decades apart. IQ in children is different although correlated with IQ later in life and many of the studies tested only young children.

The number of participants in some studies were limited. A test of 108 9-15-year olds in Barbados, of 50 13–16-year olds in Colombia, of 104 5–17-year olds in Ecuador, of 129 6–12-year olds in Egypt, of 48 10–14-year olds in Equatorial Guinea, and so on, all were taken as measures of 'national IQ'.^[3]

Many nations are very heterogeneous ethnically. This is true for many developing countries. It is very doubtful that a sometimes limited number of participants from one or a few areas are representative for the population as whole.

The notion that there is such a thing as a culturally neutral intelligence test is disputed.^{[28][29][30][31][32]} There are many difficulties when one is measuring IQ scores across cultures, and in multiple languages. Use of the same set of exams requires translation, with all its attendant difficulties and possible misunderstandings in other cultures.^[33] To adapt to this, some IQ tests rely on non-verbal approaches, which involve pictures, diagrams, and conceptual relationships (such as in-out, great-small, and so on).

Denny Borsboom (2006) argues that mainstream contemporary test analysis does not reflect substantial recent developments in the field and "bears an uncanny resemblance to the psychometric state of the art as it existed in the 1950s." For example, it is argued that IQ and the Wealth of Nations, in order to show that the tests are unbiased, uses outdated methodology, if anything indicative that test bias exist.^[34]

The national IQ of Ethiopia was estimated from a study done on 250 15-year-old Ethiopian Jews one year after their migration to Israel. The research compares their level of performance with native Israelis using progressive matrices tests. The results showed that the Ethiopians' level of performance was similar to that of the young Israeli children's group (ages 9–10). The study suggested that the low performance of the Ethiopian immigrants reflects cognitive delay rather than cognitive difference.^[35] Lynn has criticized the study arguing that is contains a number of errors.^[36] Girma Berhanu in an essay review of the book concentrated on the discussion of Ethiopian Jews. The review criticizes the principal assertion of the authors that differences in intelligence attributed to genetics account for the gap between rich and poor countries. Surveying related academic literature, the review suggests flaws in the methodology of Lynn and Vanhanen, and purports to expose the "racist, sexist and antihuman nature" of their underlying framework. Berhanu argues that "the low standards of scholarship evident in the book render it largely irrelevant for modern science".^[37]

As noted earlier, in many cases adjustments were made by authors to account for the Flynn effect or when the authors thought that the studies were not representative of the ethnic or social composition of the nation.

One critic writes: "Their scheme is to take the British Ravens IQ in 1979 as 100, and simply add or subtract 2 or 3 to the scores from other countries for each decade that the relevant date of test departs from that year. The assumptions of size, linearity and universal applicability of this correction across all countries are, of course, hugely questionable if not breathtaking. Flynn's original results were from only 14 (recently extended to twenty) industrialised nations, and even those gains varied substantially with test and country and were not linear. For example, recent studies report increases of eight points per decade among Danes; six points per decade in Spain; and 26 points over 14 years in Kenya (confirming the expectation that newly developing countries would show more rapid gains)."^[3]

• Economic inequality
• IQ and Global Inequality
• The Global Bell Curve

• PISA scores transformed into IQ values in comparison with IQ estimated by Lynn and Vanhanen
• "The Bigger Bell Curve: Intelligence, National Achievement, and The Global Economy", review by J. Philippe Rushton
• "A Reader's statistical update of IQ & The Wealth of Nations"