|
DISCUSSION
The hypotheses examined in this study have been that national per capita incomes and rates of economic growth would be positively correlated with national IQs. These hypotheses have been confirmed by strong correlations that are at a high level of statistical significance for both GNP and GDP. If we adopt a one way causal model that national IQs are a determinant of national per capita incomes and rates of economic growth, the results show that national IQ explains 57 percent of the variance of real GDP per capita 1998 and 50 percent of the variance of GNP per capita 1998. National IQ also explains 37 percent of the variance in economic growth of per capita GDP 1950-90 and 41 percent of the variance in economic growth of per capita GNP 1976-98.
There are two reasons why we consider that a causal effect of national IQ on per capita incomes and rates of economic growth is the most reasonable theory to explain the correlations. First, this theory is a corollary of an already established body of theory and data showing that IQ is a determinant of income among individuals, the evidence for which has been reviewed in the introduction. IQs measured in childhood are strong predictors of IQs in adolescence and these are predictors of earnings in adulthood. The most reasonable interpretation of these associations is that IQ is a determinant of earnings. From this it follows that groups with high IQs would have higher average incomes than groups with low IQs because groups are aggregates of individuals. This prediction has already been confirmed in the studies of the positive relationship between IQs and per capita incomes among the American states and among the regions of the British Isles, France and Spain, as noted in the introduction. The positive relation between IQ and income is so well established that it can be designated a law, of which the finding that national IQs are positively related to national per capita incomes is a further instance.
Second, there is a straightforward explanation for the positive association between IQ and incomes at both the individual and population level. The major reason for this association is that people with high IQs can acquire complex skills that command high earnings and that cannot be acquired by those with low IQs. Nations whose populations have high IQs tend to have efficient economies at all levels from top and middle management through skilled and semi-skilled workers. These nations are able to produce competitively goods and services for which there is a strong international demand and for which there is therefore a high value, and that cannot be produced by nations whose populations have low IQs. In addition, nations whose populations have high IQs will have intelligent and efficient personnel in services and public sector employment that contributes indirectly to the strength of the economy such as teachers, doctors, scientists and a variety of public servants responsible for the running of telephones, railroads, electricity supplies and other public utilities. Finally, nations whose populations have high IQs are likely to have intelligent political leaders who manage their economies effectively. Skilled economic management is required to produce the right conditions for economic growth, such as keeping interest rates at the optimum level to produce full employment with minimum inflation, maintaining competition, preventing the growth of monopolies, controlling crime and corruption, and promoting education, literacy and numeracy and vocational training.
While we consider that a causal effect of national intelligence on per capita income and rates of economic growth is the most reasonable model for an explanation of the data, there are two other possible explanations that deserve consideration. The first of these is that there is no direct causal relation between national IQs and per capita incomes and growth rates and the correlation between them is due to some third factor affecting all three. Although this is a theoretical possibility and needs to be mentioned, we do not think it is possible to formulate a plausible theory of this kind.
Second, it might be argued that national per capita incomes are a cause of national differences in IQs. This argument would state that rich nations provide advantageous environments to nurture the intelligence of their children in so far as they are able to provide their children with better nutrition, health care, education and whatever other environmental factors have an impact on intelligence, the nature of which is discussed in Neisser (1998). Intelligence has increased considerably in many nations during the twentieth century and there is little doubt that these increases have been brought about by environmental improvements, which have themselves occurred largely as a result of increases in per capita incomes that have enabled people to give their children better nutrition, health care, education and the like. Such a theory has some plausibility but it cannot explain the totality of the data. Countries like Japan, South Korea, Taiwan and Singapore had high IQs in the 1960s when they had quite low per capita incomes and the same is true of China today. Nevertheless, the model of national differences in IQ as a major determinant of economic growth and per capita incomes should probably be supplemented by the postulation of a small positive feedback in which national per capita income has some impact on the population's IQ.
Our results are based on a sample of 60 nations out of approximately 185 nations of significant size in the world. We believe that the sample can be regarded as relatively well representative of the totality of nations because all categories of nations are well represented including the economically developed "First World" market economies of North America, Western Europe, Australia and New Zealand; the "Second World" former communist nations of Russia and Eastern Europe; the "Third World" economically developing but impoverished nations of South Asia, sub-Saharan Africa and the Caribbean; and the residual categories of Latin America and East Asia. If the representativeness of our sample is accepted, our results indicate that slightly over half the variance in national per capita income in the contemporary world is attributable to national differences in IQ. However, it should be noted that correlations are somewhat lower in the total group of 185 countries (see Lynn and Vanhanen, 2002). The difference in correlations implies that this sample of 60 nations is probably slightly biased.
The regression analysis suggests that a major additional factor is the economic form of organisation consisting of whether countries have market or socialist economies. The countries that have the largest positive residuals and therefore have higher per capita income than would be predicted from their IQs are Australia, Belgium, Canada, Denmark, France, Ireland, Israel, Qatar, Singapore, South Africa, Switzerland and the United States. With the exception of Qatar and South Africa, all of these are technologically highly developed market economy countries and their higher than predicted per capita incomes can be attributed principally to this form of economic organisation. Qatar's exceptionally high level of per capita national income is principally due to its oil production industries. South Africa's much higher than expected level of per capita income should probably be attributed principally to the cognitive skills of its European minority who comprise 14 per cent of the population.
The countries that have the largest negative residuals are China, Iraq, South Korea, the Philippines, Romania, Russia, Slovakia, Thailand and Uruguay. Four of these countries (China, Romania, Russia and Slovakia) are present or former socialist countries whose economic development has been hampered by their socialist economic and political systems. After the collapse of the Soviet communist systems in 1991 and the introduction of market economies in these countries and in China, the prospects for rapid economic development for these countries are good, although it takes time to establish effective market economies. Of the remaining five countries with large negative residuals, Iraq's low level of per capita national income is due principally to the destruction inflicted in 1990 war and the UN sanctions imposed in 1990. South Korea's Real GDP per capita is also considerably lower than expected on the basis of the country's exceptionally high level of national IQ (106). The principal explanation for this is probably that South Korea had a very low per capita income at the end of World War Two as a result of military defeat and occupation by the Japanese and that it has not yet had sufficient time to achieve the predicted level of per capita income, although economic growth in South Korea since 1950 has been extremely high (see Appendix 2). The Asian economic crisis in 1998 may have increased the negative residuals of the Philippines and Thailand temporarily. Economic growth in Uruguay has been strong since the 1970s, although the country has not yet achieved the per capita income level expected on the basis of its relatively high national IQ.
Thus our general conclusion is that national differences in the wealth and poverty of nations in the contemporary world can be explained first in terms of the intelligence levels of the populations; secondly, to some extent, in terms of whether they operate market or socialist economies; and thirdly by unique circumstances such as the possession of valuable natural resources like oil in the case of Qatar and trade sanctions imposed on Iraq.
Table 4
IQs for 185 countries
See also Publications
IQ and the Wealth of Nations
(Co-author Tatu Vanhanen, Univerisity of Helsinki)
Westport, CT: Praeger, 2002.
|