May 4, 2011

The Wealth of Nations

In a new paper in Psychological Science, Heiner Rindermann and James Thompson quantitatively model the wealth of nations based on a variety test scores, evidence of scientific and engineering skills, and Charles Murray's Human Accomplishment database of eminent individuals from Homer to John Von Neumann. Looks like La Griffe du Lion's smart fraction theory comes out looking good.
Cognitive Capitalism: The Effect of Cognitive Ability on Wealth, as Mediated Through Scientific Achievement and Economic Freedom 
Heiner Rindermann and James Thompson
Chemnitz University of Technology and University College London 
Abstract
Traditional economic theories stress the relevance of political, institutional, geographic, and historical factors for economic growth. In contrast, human-capital theories suggest that peoples’ competences, mediated by technological progress, are the deciding factor in a nation’s wealth. Using three large-scale assessments, we calculated cognitive-competence sums for the mean and for upper- and lower-level groups for 90 countries and compared the influence of each group’s intellectual ability on gross domestic product. In our cross-national analyses, we applied different statistical methods (path analyses, bootstrapping) and measures developed by different research groups to various country samples and historical periods. Our results underscore the decisive relevance of cognitive ability—particularly of an intellectual class with high cognitive ability and accomplishments in science, technology, engineering, and math—for national wealth. Furthermore, this group’s cognitive ability predicts the quality of economic and political institutions, which further determines the economic affluence of the nation. Cognitive resources enable the evolution of capitalism and the rise of wealth.

And here's a big graph from the paper (click on it to see the right edge):








13 comments:

Formerly.JP98 said...

Our results underscore the decisive relevance of cognitive ability—particularly of an intellectual class with high cognitive ability and accomplishments in science, technology, engineering, and math—for national wealth.

"An intellectual class" -- does that mean the U.S. is not doomed after all, since we'll still have an intellectual class with high cognitive ability despite the tidal wave of immigration from Central & So. Am.?

LBK said...

India has had a distinct intellectual class (Brahmins) for thousands of years. But they weren't always interested in engineering and technology. I sometimes wonder where civilization would be today if all those generations of Brahmins had focused on science rather than yoga.

agnostic said...

It looks like La Griffe's smart fraction theory matters more for economic freedom than for STEM achievement.

For STEM achievement, it doesn't matter if we set the threshold for "smart" at +1 or -1 s.d. -- the path coefficients are the same, 0.43 and 0.41.

But for econ freedom, it makes a huge difference: the path coefficient shrinks from 0.65 to 0.06 when we choose the lower threshold for "smart."

This fits with the historical picture where lots of earlier, pre-Flynn Effect societies had impressive pure and applied sciences, but not a lot in the way of market economics.

LBK said...

Every culture has a smart fraction, but it matters what those smart people spend their time doing. Medieval Europe had an intellectual class that consisted mostly of church scholars, who devoted a lot of time and effort to crucial questions such as how many angels could dance on the head of a pin. Needless to say, that didn't lead to much wealth creation.

Civilization didn't start to advance until intellectuals decided to stop wasting their time on arcane religious dogma and start studying nature in a scientific manner.

Wandrin said...

"Our results underscore the decisive relevance of cognitive ability—particularly of an intellectual class with high cognitive ability and accomplishments in science, technology, engineering, and math—for national wealth."

So we know who to blame then.

Wandrin said...

Have we left Afghanistan yet?

RKU said...

Actually, I'd bet that "personality traits" are even more important than IQ/intelligence in the economic success of a society, and these probably have a genetic as well as a cultural component.

I think part of the problem is these can't be measured or quantified nearly as easily, and are also more vague and subjective in categorization. Furthermore, they can be "faked" or simulated without too much difficulty. It's easy for someone to pretend to be more honest than he really is to an interviewer. It's much harder to pretend to have a higher testable IQ than you really do...

Anonymous said...

As far as moral responsibility:

What if the effects of slave raiding included protein deficiency? Kwashioikor, or whatever you crazy kids are calling the kind of nutritional deficiency that makes everyone's foreheads cave in for lack of protein to grow a forebrain?

Luke Lea said...

Someone -- Michael Daisey I think -- recently described China as a fascist state run by thugs. True or not, China may yet prove that institutions and culture matter as much as brains and technology. I guess we'll see.

Anonymous said...

Medieval Europe had an intellectual class that consisted mostly of church scholars, who devoted a lot of time and effort to crucial questions such as how many angels could dance on the head of a pin.

Not true. Modern scholars of medieval technology recognize that the High Middle Ages were indeed a place where there was substantial material progress. The focus of that progress was the monastery.

The Romans had mills near Arles and a few other places but in general they built very few labor savings devices. The medieval monastery however was organized around water mills. The only place in the entire world where there was a supply of non-muscle power was the monastery. Some call it the Medieval Industrial Revolution.

Albertosaurus

Anonymous said...

"Medieval Europe had an intellectual class that consisted mostly of church scholars, who devoted a lot of time and effort to crucial questions such as how many angels could dance on the head of a pin. Needless to say, that didn't lead to much wealth creation."

You're an idiot, HTH.

Let me introduce you to the founder of empirical science.

-bb

Dutch Boy said...

Is a cognitive class the same as a capitalist class? There is reason to doubt. The capitalists don't seem to be doing too much heavy cognition lately.

David said...

>I'd bet that "personality traits" are even more important than IQ/intelligence<

I'm betting one is structured on the other.