In two previous posts (The
Wealth of Nations, Cognitive Capitalism) I had mused on the contribution of
human intelligence to the creation of wealth.
Last week I belatedly came across
Earl Hunt’s (2012) “What makes nations intelligent?” Perspectives on Psychological Science 7 (3) 284-306. In this piece
he sets out some of the evidence for intelligence making people and nations
rich.
One strong example is that intelligence predicts job success at r= 0.4
for low complexity jobs, r= 0.52 for medium complexity jobs and r=0.58 for high
complexity jobs. These complex jobs make
the biggest difference because they increase the rate of productivity gains. Societies
had few such permanent jobs before the industrial revolution, and the
increasing complexity of the emerging industrial economy depended on such
occupations. Bright people were needed
to fill these demanding posts, which led to the emergence of a middle class of
skilled workers.
Another strong example is that in our own age the very, very
brightest in adolescence (top 99.75th percentile) go on by age 40 to
be three to five times more productive than even the very bright (99.25th
percentile) and at least 12 times more productive than the rest of the
population (in terms of patents, which is a good predictor of economic
innovation and wealth creation). Intelligence matters.
But my eye was drawn to a simple summary of the causes of
wealth, based on Rindermann’s 2008 work on 17 nations for which he had data for
cognitive data. So, in the hope of
getting comments, I leave you with a single table showing some of the desirable
national consequences of intelligence, and some undesirable consequences of the
lack of it.
Table
4. Correlations of National Levels of Cognitive Ability with selected desirable
and undesirable attributes of the country 1960-1996
Desirable Undesirable
Attribute Correl Attribute Correl
Rule of law .64 Fertility rate -.73
Quality govt .64 Gini inequality -.51
GDP per capita .63 HIV infection rate -.48
Economic freedom .52 Govt spend % -.47
Economic growth .44 Homicide rate -.23
Solved homicides .32 War: freq & impact -.22
Rindermann, H. (2008) Relevance of education and
intelligence at the national level for the economic welfare of people. Intelligence, 36, 127-142.
Is government spending necessarily bad?
ReplyDeleteI had to summarise to get everything into the narrow column width. It should read "Govt spending as a percentage of the economy". I would argue that high rates (50% and higher) are bad because they lead to a collapse. I think that countries can get to 65% before the crash comes. The Economist had a special edition on Scandinavia, showing how they had recovered from these high levels, with better managed and targeted public spending.
ReplyDeleteNice to see you blogging James! and a nice article too!
ReplyDeleteGlad to have a distinguished reader!
ReplyDelete