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Not Smart Enough to Be Rich?

Average IQ is lower in poorer countries. Why?

Just in case you haven’t heard this before, I’ve got some information for you that you might find a bit troubling. In their 2006 book titled IQ and Global Inequality, intelligence experts Richard Lynn and Tatu Vanhanen report that setting the average measured IQ in the U.K. at 100, people in the U.S. had average IQs of 100 and 98, respectively. People in the Central African Republic, Mali and Kenya had average IQs of 64, 69 and 72. People in India, Indonesians, and Iraq scored somewhat higher than those in the poorer countries but lower than those in the richer countries: their average IQs were 82, 87, and 87 respectively.

Are country incomes and IQs correlated? A recent study using a sample of 157 countries finds a high and statistically significant correlation between the two. One might conclude, then, that it is the lower IQs of their people that explains the lower average incomes of people in the world’s poorer countries. Lynn and Vanhanen evidently think so.

Could this really be true?

Were this the nineteenth century, during which the sun never set on European empires, a cross regional study with findings like this might have been treated as self-evident in the U.K. or U.S. It would have seemed to provide a moral justification for colonizing powers to maintain their rule over their inferior charges, helping them to advance themselves to the extent possible given their “more meager innate endowments.”

But it’s the twenty-first century, and IQ tests are a modern scientific tool. Racism has been roundly debunked. So what gives?

In a newly published paper titled “Does the intelligence of populations determine the wealth of nations?” Vittorio Daniele, who teaches economics at Magna Graecia University in Catanzaro, Italy, provides an explanation that builds on the Flynn effect. In a series of studies published over several decades, the New Zealand political scientist J. R. Flynn has famously found that in mostly rich countries in which IQ test data have been available for sufficient periods of time, average IQ scores have been steadily rising. Some studies also show that at a given point in time, IQ tends to be higher for the young than for the old.

Supposing that each new cohort that is born has greater intellectual potential than the one before it could hardly make sense, if that potential is determined genetically. Indeed, those living today carry re-combinations of their grandparents’ genes, and if anything people of lower innate intelligence are more, not less likely to survive in today’s more pampered environments, so heritable intelligence should be falling, not rising.

As Daniele argues and most experts agree, the best explanation for the Flynn effect is that in recent decades, each cohort is being exposed to more of the kinds of stimuli that build the sort of cognitive traits IQ tests are designed to measure. If this is true for my children, who were raised in the computer age, versus my parents, who grew up in the age of radio, then we can expect children growing up in the most remote locations or impoverished circumstances in the world’s poorest countries—think of the children of peasant farmers living in homes without electricity and plumbing, perhaps lacking access to newspapers—to be experiencing an environment that is still less generative of these sorts of cognitive skills than the urban American world of my parents’ youth. Children of the rising middle classes in places like Shenzhen, China or Rio de Janeiro, Brazil, on the other hand, are being exposed to stimuli similar to those of their contemporary American counterparts. Their inclusion in the tested populations is thus raising their countries’ average IQ test scores year by year.

The latest data support these observations by showing that IQs have been rising steadily in countries experiencing the most rapid economic development during the past few decades. As a measure of the interaction between intelligence and modern cognitive stimuli that strengthen capacities for rational classification, quantitative reasoning, etc., a population’s average IQ is therefore an indicator of economic modernization and development, not their cause.

To rebut the argument that cross-country differences in IQ reflect differences in inherited capacity for intelligence and that it is those differences that in turn explain differences in income, Daniele shows that between-country differences in average IQs are well predicted by the same factors that predict differences in contemporary incomes—especially, differences in level of development on the eve of the age of European colonialism circa 1500. Much of the data and explanatory framework borrow from my own work on the determinants of long-run economic growth, discussed in a series of academic articles and in my general audience book The Good, The Bad and The Economy. Interestingly, some of the research reported there also shows that differences in ancestral levels of development circa 1500 help to explain income differences between ethnic groups within given countries, including those between mainly European and mainly African-descended, as well as Hispanic, populations in the United States. The approach used by Daniele to explain international IQ differences could probably be applied, then, to the inter-ethnic differences in measured IQ that have been seized upon by some to construct pseudo-scientific cases for racial inequality. Work like Daniele’s will hopefully prove helpful in putting such ideas to rest once and for all.

More from Louis Putterman Ph.D.
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