Monday, May 28, 2007

HBD and economists' gullibility

The story is a little old now, but a week ago the edifying Fat Knowledge posted on the results of a study from an Ohio State University Professor purporting to show a surprising lack of relationship between wealth and IQ.

When crunched for time when reading, I don't always get to the primary sources cited, as was the case with this post. But the claim immediately struck me as absurd--to even be remotely possible, retirement vehicles and home equity had to have been exempted. When I returned to the post a few days later, FK had investigated a little deeper and found that the assertions were basically bunk.

The study's author, Jay Zagorsky, controlled for several factors that proxy for IQ, including divorce rates (making personal sacrifices, waiting for the right person to tie the knot with), years of education (duh), inheritance (the heritability of IQ is generally considered to be around .75-.85), and occupation (because intelligence has nothing to do with whether you choose to be a molecular engineer or a roofer?)! That's like stating that there is no difference between the average height of Chinese peasant farmers and NBA players if you control for shoe size, the femur weight, and pant length.

This evening, I scrolled through the comments on Harvard Economics Professor Greg Mankiw's blog from which FK excerpted.

As a disclaimer, I come in unimpressed with the Prof. When John Kerry loaded the straw that ended his '08 Presidential campaign by insinuating that military personnel are dunces, Mankiw sloppily ran a couple of 'opposing' viewpoints without weighing in himself. I threw my two cents in, pointing out that the DoDEA performs well on the NAEP--its Hispanics and blacks are at the top of their class, and its whites rank third when compared to the other 50 states.

I received no response. Maybe vanity is coloring my irritation, but if military personnel are hopeless dolts, why are their children the smartest the US has to offer? Seems like something that should at least be considered.

To the thrust: Not only is Mankiw's facile vetting of the post embarrasing, the vacuousity with which the vast majority of the commenters approach the subject is startling. Most of them take the 'conclusion' (which Mankiw presents without caveat) as veracious and then proceed to spew silly nostrums about what really matters in wealth accumulation.

Why, in addition to immigration, are economists so stupid in dealing with IQ?

There's the tacit acknowledgement that the wealth of guys like Mankiw attained their stations due to prudent decision-making and hard work rather than the natural talents they were born with. Of course, smart decisions and hard work played a role--but they were underwritten by innate abilities. Being content with that tacit acknowledgement is understandable--that self-made diligence is why Beethoven's lifestory is more admirable than Mozart's.

Another partial answer comes from the similarities that the immigration and IQ issues share--they both inescapably deal with the realities of human biodiversity. Economists think in terms of blank-slatist models, in which humans (or any other vector) receive various levels of inputs and correspondingly produce outputs based on the quantity and composition of those inputs. The inputs are virtually always limited to the extraneous external environment--years of education, years of work experience, exposure to pollutants, etc--and thus can be (favorably or unfavorably) altered at any time. Changing the social system (more affordable education, better work-training programs, etc) becomes the only thing of importance.

Parenthetically, while WSJ editorialists advocate a free-flow of people in tandem with arguing for freer markets and social systems, their assumptions blind them to the fact that the free-flow of those people are going to make their jobs arguing for more liberality increasingly difficult. Similarly, European leftists waving in immigrants from the Muslim world are foolishly dooming the quasi-socialist libertine societies they love. While the WSJ-types hold that there is a universally optimal way for people to make it in life, and the leftists hold that there is no optimal way for a person to live, I hold that there is a universal 'best course' but that it varies contingent upon the makeup of the individual. It's a sort of biological reincarnation of Luther's vocational calling.

So what if the average Mexican migrant has an educational attainment equivalent to the 8th grade? We can get him his GED and some years in college and he'll make big bucks. Even if he doesn't, his kids will be able to as well as any other Joe American does. Of course, we know this isn't the case and it's obvious as to why it's not.

Mankiw and other elite economists are happy to accept the Ohio University study findings, as they suggest that other more malleable inputs--the informational kind of which they dispense--are what truly determines success.

Talk about anecdotal evidence that smart students graduate from Harvard because smart students go to Harvard, rather than because Harvard makes students smart!

But this is another illustration of how they are so often wrong. A couple of major international phenomona are going to further undermine the free-market behavioralist position: China's triumph over India in terms of economic strength and international influence, and post-Kim Jung Il North Korea's supercharged ascent up the development ladder--an ascent that will surpass that of anything de Soto's home country of Peru will be able to do.

Grappling with the social sciences does not necessitate a suspension of 'layman' heuristics like many of the hard sciences (quantum physics) do. Because it's closer to the 'human experience' than say, a hard science like astrophysics, you should leverage what 100,000 years of evolution has primed you to be. It's generally referred to as 'common sense'.


Hal K said...

If they controlled for occupation then it invalidates the study, as far as I am concerned. It is unfortunate that this study received as much media attention as it did (which wasn't that much, but it did get a headline on Yahoo news).

MensaRefugee said...

One thing Id like to see reported Re: The Zagorsky Study is what percentage of the high IQ types were left to give him his conclusion after controlling for the "extraneous" factors.

My bet is it was < 10%

JSBolton said...

The best study I remember on this subject right now, is Murray's taking of siblings with different IQ scores, to determine the high correlation between IQ and income.
Environmental effects are all but eliminated, and it even allows one to estimate the magnitude of the ethnoracial anti-merit policies' effects, on the overall correlation between IQ and income in America.
A Zagorsky-type approach does not bother with testing the hereditarian explanation of any large part of the variation to be explained.
It assumes what it has to prove or give some sort of argument for, that is, more than just Frankfurter smear jobs.
The left, and anti-hereditarians in general, have to use smears also because they have some basic laws of life to keep concealled.
One of these is that for each increment of conceptual ability differential between two groups spatially juxtaposed, the lower group has greater incentive to try to switch status competiton towards one of ruthless violence, and away from any standard which correlates positively with IQ; even just insofar as it does so correlate.
This pattern of group relations is to be left unexplained and unimproved, since the hopes of the power-greedy are very much riding on the successful groups remaining quite crippled in understanding and reacting efficiently to this world-historical wrangle of status contests. Hopefully many will gain a vocation to explicate this, before it consumes higher value beyond what can be sustained.

JSBolton said...

Why the supposedly pro-business, openness-valuers with one-world ambitions, should be so willfully ignorant of the inter-group effects mentioned above, is mysterious.
The last thing we need more of is groups whcih find themselves on the bottom of every status competiton but that of ruthless violence.
The closer spatially, and more 'integrated'
their lives come into immediate physical contact, with the higher groups, the more their pain and rage will multiply.
The left sees this, and maliciously celebrates and rejoices in it.
The moderate right, in proportion as it is internationalistic and unpatriotic and disloyalistic, must cry louder and louder, with eyes and ears covered tighter and tighter:
Don't tell us this, don't let us see this, don't let us hear this, it's not there, all men are brothers and equal, stop, don't show us these conflicts, silence, we need censorship, it's a hate crime, stop, stop, stop!

Audacious Epigone said...


In a way, though, it is fortunate that the study received the fallacious headlines that it did. Just like the IQ hoax and the dribble about the military being comprised of hopeless idiots, it reveals how facile the leftist media outlets are whenever a news item purports to 'prove' the preconceived notions they have about how the world works and why it works the way that it does.


Great point. I've not seen his study made available online, but we're probably looking at a small cognitive 'elite' that are mostly addicted, suffer from psychological problems, are lonely, etc.


Do you consider laissez-faire economist types as being cut from the same cloth as power-seeking leftist politicians? I'd be interested to hear your take on the distinctions and similarities.

Audacious Epigone said...

Oh, just read your last post. It flummoxes me as well.

MensaRefugee said...

Mebbe this is a summary only, but its the most detailed version of it I have yet seen.

MensaRefugee said...

I think its a simple matter of people being unable to innately care for things beyond their immediate experience. (The cliche being I would be more upset if I injured my thumb than if a million people died in an earthquake in China)

We approximate our behaviours to issues beyond our immediate circle. Worked fine when we were groups of 200 hunter-gatherers.

This is why Im an ardent libertarian (not a stupid one though). Its only when people have responsibility for their own reality can they circumvent idealism when need be. This requires smaller communities, or at least the ability to break up into smaller communities when necessary.

So, in a large state, politicians cannot innately care about other people (as is rational) - so they start to rely on cliches and idealised representations of the truth.

Take an extreme example. Say you had a population where it was known beyond doubt that 20% of the people will grow up to be rapists (this is NOT just a thought experiment. Click

Take, say, an effiminate woman - AKA someone whos on the extreme right of the Bell Curve when it comes to feeling instead of thinking. And present her with a baby boy from the above mentioned group. What would she do? Accept him, coo over him, adopt him and bring him over. All the while knowing of what will likely happen in the future.

This is because the only whip is the whip of reality 15 long years down the road. Same deal, in attenuated form, with our government.

Now layer that basic weakness with special interest groups, irresponsible political tactics and so on - and you have our current fiasco.

Audacious Epigone said...


Thanks for the link.

Interesting explanation. President Bush's past ties to Mexico fit into his idealized image of the typical migrant and an elite sense of belonging in the station you hold hedges against empirical evidence that you had some help.

Fat Knowledge said...


You raise some interesting points. A couple of thoughts.

First, while I agree with you that most of the commenters just ran with the conclusion and then added their own reasons why they thought it was correct, I think that is what you get on just about any blog. Most people are willing to take the conclusion without doing research and then add their own $.02. Happens on every blog I have seen (including this one). What I liked about the comments, is that the minority that disagreed linked to other posts that explained what was wrong. So if you were open minded you could find what was wrong about the post in the comments. This unfortunately doesn't happen on all blogs.

Second, I think the reason Mankiw downplays innate IQ as a driver of success has less to do with him being an economist than it does with him being a teacher. There is that old saying whether you believe you can or you can't, you are correct. As a teacher I think he wants to give the benefit of the doubt to the hard work being able to lead to success.

Third, as for economists leaving IQ out of their models, I think you have a valid point. Some economists are looking into it, but I would agree it is not a mainstream position. I think part of that has to do with the fact that economists like to focus on areas where they can make a positive change. If you switch an economic policy than you can see an improvement in GDP. If you assume that IQ is more or less fixed and you can't do much about it, then why spend time on that, when you could spend time elsewhere that will have a positive impact?

You bring up China and North Korea as examples of where standard economic analysis will miss their growth potential because it doesn't look at IQ. I think you could also argue the opposite, that China and North Korea are great examples of the standard analysis, because the economic policies they chose overrode the natural abilities of their people. That IQ might be important, but if you have to choose between high IQ people and bad economic policies or low IQ people and good economic policies, that the later will give you a stronger economy.

Oh, and I just read Brownback's position on evolution. I believe you are a supporter of Brownback, correct? I don't believe that you will agree with his stance on evolution. So, I am curious, does it matter to you? Is a presidential candidate's position on evolution something that is important to you? As someone who thinks a lot about evolution, I would think it might be. On the other hand, you might think that the president doesn't really have a lot of influence in this field, and there are other much more important issues to the president so this is more or less irrelevant. Interested to know what your take is.

Audacious Epigone said...


"You bring up China and North Korea as examples of where standard economic analysis will miss their growth potential because it doesn't look at IQ. I think you could also argue the opposite, that China and North Korea are great examples of the standard analysis, because the economic policies they chose overrode the natural abilities of their people."

Wow, sometimes you have those 'oh yeah' moments that takes you aback. I just had one of those.

Also, I meant no disrespect to you in pointing out the laziness of professional economists who ran with this story and the spin that was put on it. But the idea that IQ and income are related while IQ and wealth are not fails the most basic test of common sense. How a nationally known figure like Mankiw can give it publicity without even, apparently, thinking about it is what irks me.

Some economists are looking at how entities can work to increase the IQ of their respective populations. It's not too many steps away from terrain that most people are uncomfortable treading on (although I'm not), but there are legitimate, only mildly controversial policy initiatives that can work to raise IQ: Increasing the rate of breast-feeding among the poor and the distribution of nutritional supplements in sub-Saharan Africa.

Maybe Mankiw is as magnanimous as you suggest. But he's teaching at Harvard, where the average ACT score range runs between 31 and 34. We're talking more than 2 standard deviations to the right on the intelligence bell curve. And this study is just silly--about all it proves is that among people of equivalent cognitive abilities, those who are less impulsive and work harder are going to fare better. Well duh.

I'm not a fan of Brownback at all. He's one of my state Senators, so I bring him up from time to time.

However, I do support Tancredo, who also claims not to believe in evolution. In my opinion, that's silly, counterproductive, and fallacious, but I see it a position of minimal consequence. His support for the Fairtax and his strong stance against unfettered underlcass immigration trump in my eyes.

MensaRefugee said...

Thing is, a point that needs to be legitimized is one can believe in evolution and still have a sense or belief in a "higher power" of some sort. Dualism of some kind. We are all spirits, but highly influenced by genes.

One possible example of what this means - we reincarnate but into meat bodies.

Im not saying this is correct. But just that people shouldnt have to choose between a spiritual idea, an idea of a greater purpose etc etc on one hand, and science on the other.

Audacious Epigone said...


Right. To sum up something I spend too much time dwelling on without 'progressing' beyond:

By it's very definition, the supernatural cannot be fully explained by the natural. I can't positively disprove spiritual assertions, nor can I comfortably ascertain them. But a combination of the thoughts of Aristotle (or Aquinas) and Pascal leave me a self-described theist. And, of course, an affirmer of evolution.

Fat Knowledge said...

Also, I meant no disrespect to you in pointing out the laziness of professional economists who ran with this story and the spin that was put on it.

None taken. You are correct that most economists don't put IQ into their models, so this just forced me to think through why this was and whether it should be added.

But the idea that IQ and income are related while IQ and wealth are not fails the most basic test of common sense.

Probably true, but I like to write about things that are counter intuitive and that aren't apparent via common sense. I have read stranger stuff that turned out to be true.