In these times of hard-nosed budget-cutting, an increasing number of elected officials have their hatchets poised to cut off the supply of tax dollars going to education and research. Is it really worth making all these indirect investments in “human capital” (the knowledge and abilities stored inside people’s heads)? Wouldn’t there be more direct benefits if we just allowed businesses to keep their tax money and invest it in new machines, additional jobs, and so on? A new set of findings, recently released in the journal Psychological Science, argues against that line of reasoning, suggesting that slashing funding for education is ultimately, well, downright unpatriotic.
To examine the influence of a country’s intellectual class on its economy, Heiner Rindermann, a psychologist at the Chemnitz University of Technology in Germany, teamed up with James Thompson of University College, London. The pair carefully analyzed three massive data sets from 90 different countries.
Besides examining results from diverse historical periods, they crunched the numbers using several state-of-the-art statistical analysis techniques.
Their analyses led them to this conclusion: Having a high IQ intellectual class of people with accomplishments in science, math, technology and engineering translated directly into more wealth for the country. A high-performing intellectual class was also associated with better-developed and freer economic and political institutions, which in turn encouraged more development of the country’s “cognitive resources,” in what they called a “virtuous cycle.” The free climate becomes a catalyst for creative productivity among the high IQ innovators, who are thus liberated to rethink older ways of doing things, and to expand into new scientific arenas. This in turn inspires new technologies, as well as newer and more efficient ways of doing business, and a better climate in which to grow the next generation of innovators.
In developing an equation to predict which countries would be wealthier, the researchers plugged in the average IQ of each country’s population as a whole, as well as the average IQ of the “intellectual elite” (the top 5% of the population), and the lowest 5% of the population. Just as countries differ in their distribution of wealth, they also differ in their distribution of IQ. Canada and the U.S. are identical in the IQ of their smartest people (120), but the lowest 5 percent of Canadians are 5 points smarter than the lowest 5 percent of Americans (75 vs. 80). The researchers obtained their estimates of national IQ from several large-scale international studies (TIMMS: Trends in International Mathematics and Science Study, PISA: Programme for International Student Assessment, PIRLS: Progress in International Reading Literacy Study, PIRLS).
Rindermann and Thompson found that the IQ measures were all linked to a country’s wealth (as measured by GDP), but, when various relevant factors were controlled, it was the IQ of the intellectual elite that was the best predictor. To put it into pure economic terms, an increase of 1 IQ point among average citizens increases a country’s average GDP by $229, whereas an increase of 1 IQ point in the intellectual elite is worth $468.
I must admit a bias, given that I am a university professor with government grants to support the high IQ graduate students working in my labs, and someone who teaches classes to bright and eager undergraduates at a state university, many of whom also aspire to future careers in scientific research. Nevertheless, it seems that Rindermann and Thompson’s findings have pretty clear implications – if you cut funds for education and for scientific research, you’re choking off the system that feeds what has been the world’s most productive “human capital” machine. According to my colleagues from other countries, the American educational system has a reputation as unimpressive up through the university level, but is regarded as the top of the heap when it comes to training at the highest level – with people around the world desperate to come to the United States to get the best Ph.D training on the planet. Thus, slashing funding for higher education and scientific research (much of which is conducted by our best Ph.D. students at major universities), seems like a policy destined to undermine the country’s economic health in long-lasting ways. In the broader scheme of history, these findings also highlight the ultimate self-destructiveness of totalitarian governments that have hoped to build a new society by first purging all the intellectual free-thinkers.
Douglas T. Kenrick is Professor of Psychology at Arizona State University and author of Sex, Murder, and the Meaning of Life: A psychologist investigates how evolution, cognition, and complexity are revolutionizing our view of human nature.
Rindermann, H., & Thompson, J. (2011). Cognitive Capitalism: The effect of cognitive ability on wealth, as mediated through scientific achievement and economic freedom. Psychological Science, 22, 754-763.