TABOO RESEARCH
IQ and the Wealth of Nations explores the correlation between a nation's intelligence and wealth
BY DOUG FRENCH

Nothing sends politically correct types into a tizzy quite like a discussion of IQ and race. Witness the 1994 publication of The Bell Curve. Race and intelligence research is considered a taboo subject. Charles Murray, that book's co-author, noted, for example, "Some of the things we read to do this work, we literally hide when we're on planes and trains." Despite the attacks, The Bell Curve was a best seller, and African-American economist and conservative writer Thomas Sowell called the book "very sober, very thorough, and very honest."

Eight years later an even more controversial book was published that virtually no one has heard of, IQ and the Wealth of Nations. The authors, psychology professor Richard Lynn and political science professor Tatu Vanhanen, compellingly make the case that the IQs of populations are instrumental in the economic success (or failure) of nations. 

Despite presenting dry facts and figures, the authors write with extraordinary clarity. Each chapter is formatted with an opening summary concerning the focus of that chapter, followed by the body of information and then concluding with a concise summary. 

Lynn and Vanhanen first explore other theories as to why some countries are rich while others are poor. These theories blame such factors as: geography, climate, culture, psychological attitudes, and poor nations dependence on capitalism and market economies. 

The authors believe these factors may provide marginal explanations for the gap between rich and poor nations, but none consider intelligence. The authors then define intelligence and discuss the differences between different populations. Average IQs are highest amongst the people of East Asia, followed by Europeans, people of North America and Australasia, the peoples of south and southwest Asia and Latin America, and then peoples of sub-Saharan Africa. 

The relationship between earnings and IQ are then examined. Studies of the U.S. population reflect a .35 correlation between IQ and earnings. "This association should be regarded as a casual effect of IQ on earnings because IQs are stable from around the age of five years and predict earnings obtained in adulthood," explain the authors. 

Low intelligence has been found in numerous studies to determine social pathologies, such as unemployment, crime, welfare dependency and single motherhood. 

The authors then performed a regression analysis of 81 countries, and then on 185 counties, comparing national IQ scores with measures of economic performance. The 81-country analysis, which had the benefit of direct IQ evidence available (the expanded group relied on estimates for 104 countries), indicated a .71 correlation between national IQ and per capita GNP (gross national product) for 1998 and a .76 correlation between IQ and GDP (gross domestic product). These are very high correlations. 

Countries that had higher economic activity than the national IQs would indicate were found to be tourist destinations or oil producers. Conversely, countries whose economic activity was significantly less than national IQs would predict were found to be mostly formerly socialist counties in Europe and Asia. "The evidence indicates that socialist command economies have been much less favorable for economic development than market economies." The authors single out China and Japan as countries with very intelligent populations but have economically underperformed due to command economy and an autocratic political system in the case of China, and an overregulated economy and isolation in the case of Japan. Sub-Sahara Africa has experienced economic devastation because of over-regulated economies and low-intelligence populations. 

With China and Eastern Europe embracing market economies, the prospects for growth in those countries is great. But, the authors point out that the idea that all nations can benefit from modern technologies to achieve equal levels of economic development is false. The correlation between per capita income and national IQs has persisted since 1820. The gap between rich and poor will continue. "If differences in National IQs are genetically determined to a significant extent, as we believe, we have to conclude that it would not be possible to eradicate these differences by any environmental interventions or manipulations except possibly by massive eugenic measures that would not be practical," Lynn and Vanhanen summarize. 

So what should be done about this? The authors believe rich nations have a moral obligation to continue to send aid to poor nations and that some of this aid should be directed at raising intelligence levels. But, that sounds like throwing good money after bad. LW

Doug French, associate editor of Liberty Watch: The Magazine, is an executive vice president of a Nevada bank. He is the 2005 recipient of the Murray N. Rothbard Award from the Center for Libertarian Studies.