Comments on: Questions for Garett Jones

By: Handle

Handle — Sun, 15 Nov 2015 01:56:19 +0000

One social metric could be the ‘high-end to low-end’ ratio. Let’s forget about IQ and just use some kind of measure of social externality, with high-end people tending to have positive impact and low-end people causing problems. People in the middle do their part, but don’t have much impact on collective performance either way.

Anyone who has ever had to manage a diverse group, or work on a team project with folks with highly variant levels of talent and motivation, can appreciate the possibility of this social reality.

If you start with a bell curve centered at 0, and say high-end people start at +2SD, and low-end people are below -2SD, then the ratio is 1:1, with 2.3% of the population above the high line, and 2.3% below the low line.

Now, what happens to the ratio if you shift the mean by 0.5 SD (only 7.5 points in IQ terms), but keep the high and low lines where they were?

Now, 6.7% of people are above the old high line, but only 0.6% of people are below the old low line. The ratio is now 11 to 1! A 1,000% increase. That’s huge.

And 0.5 SD isn’t even that much. Symmetrically, if you were to go 0.5 SD in the other direction, the ratio would drop to 1 to 11, which is a fall over over 90%. Also very dramatic.

By: Handle

Handle — Sat, 14 Nov 2015 12:21:34 +0000

Hanson has come comment too:

So simple economic theory leads us to expect that the benefits that smart people give to others nearby, within these shared priced-entry institutions, will be reflected in their incomes. Specifically, people can plausibly pay more to live, club, shop, and work near and influenced by others who are more patient, cooperative, informed, and reliable. So these local benefits of smart associates do not plausibly explain the difference between how individual and national IQ correlate with income. To explain this key difference (a factor of six!) we need big market or government failures. These could result if: ... 3. Governments with structures that fail to prevent the stupid and impatient from greatly influencing government policy. Such prevention might happen via restricting the franchise in democracies, by auctioning governance to a highest bidder, or via institutions like futarchy tied to long-term outcomes. This third explanation seems by far the most plausible to me, especially via the government impatience channel. After all, while the stupid might be persuaded to see a benefit in adopting government institutions that give more influence to the smart, the impatient may just not see much benefit from their point of view in having a more patient government.

By: BC

BC — Sat, 14 Nov 2015 11:53:16 +0000

Re: proximity effect vs. cultural effect. Suppose we transplanted an American into Africa and observed that his income dropped precipitously. Would that be because being emersed in African culture dramatically changed the American’s work ethic, trustworthiness, and other characteristics or would it be because there are fewer opportunities for the American to trade his skills for other goods and services? It seems obvious that proximity effect dominates.