Why are Some Nations Rich and Others Poor?

Why are Some Nations Rich and Others Poor? by Al Fin.

The conventional reasons for why some nations are rich and others poor [are] trade, natural resources, worker productivity, access to capital and technology, rule of law, geography, stable government etc.

But most of these factors relate to the quality of human capital. Even wealth from natural resources depends on the ability to use them, and Singapore and Japan are far wealthier per capita than any country in Africa.

Before we dive into the politically incorrect explanation, here is a glossy video with the conventional case:

Now for the non-PC but more convincing parts of the puzzle. From a book review of IQ and The Wealth of Nations:

Richard Lynn and Tatu Vanhanen examine IQ scores and economic indicators in 185 countries. They document that national differences in wealth are explained most importantly by the intelligence levels of the populations. They calculate that mean national IQ correlates powerfully — more than 0.7 — with per capita Gross Domestic Product (GDP). National IQs predict both long-term and short term economic growth rates. Second in importance is whether the countries have market or socialist economies. Only third is the widely-credited factor of natural resources, like oil.

One arresting fact emerges: the average national IQ of the world is only 90. Fewer than one in five countries have IQs equal or near the British average of 100. Almost half have IQs of 90 or less. This poses a serious problem if the book`s conclusion that IQ = 90 forms the threshold for a technological economy is correct.

But Al Fin finds an even more important factor:

Correlations between GDP and average national IQ are quite obvious, although politically incorrect. Wealthy high IQ nations might consider “building a high wall to block illegal low-IQ immigration, and encouraging high IQ couples to have more children.”

But high average IQ may not be the most important ingredient for building human capital to support a prosperous, thriving society. A set of brain processes referred to as “executive functions” are at least as important as IQ.

Executive Functions (EF) are mediated by the pre-frontal lobes of the brain and other key brain centres. Examples of EF include:

  • Those that involve planning or decision making.
  • Those that involve error correction or troubleshooting.
  • Situations where responses are not well-rehearsed or contain novel sequences of actions.
  • Dangerous or technically difficult situations.
  • Situations that require the overcoming of a strong habitual response or resisting temptation.

Executive functions have been found to be roughly 90% heritable, as opposed to IQ which is generally found to be between 50% and 80% heritable, with heritability of IQ increasing as a person ages. EF can be more important to life success than IQ, given a certain baseline intelligence level.

Much of a nation’s human capital is tied up in the genes which help determine IQ and EF. If populations of high average IQ and EF do not procreate, massive amounts of genetic wealth are being dissipated to no apparent benefit.

Even worse, politically correct governments are seeking to displace the “genes of prosperity” and to replace them with “genes of poverty, violence, and corruption.” It is not easy to displace intelligent, orderly, hard-working, and innovative populations in an open and transparent manner — and so governments often go about the process in very underhanded ways (consider immigration in Germany, the Netherlands, and Sweden, or US immigration under Obama). …

IQ roughly corresponds to intelligence, and EF roughly corresponds to self-discipline, goal orientation, impulse control, and self-starting. Both are highly heritable, and need to be trained early in childhood to achieve optimal outcomes in terms of life success and achievement. They are crucial ingredients of a nation’s human capital and future economic prospects, and are typically neglected by most western nations — out of leftist political correctness.

Perhaps US president-elect Trump can bring the balance of human investment back into a more rational range. You get less of what you tax and more of what you subsidise, after all. …

Most people outside the field of psychology do not understand what the executive functions are — too many confuse EF with “EQ” or emotional intelligence, which is a more nebulous and trendy concept.

Read it all. This article was sent in by an anonymous reader with a strong academic background in genetics.

Commenter Jim, on why standard deviation of IQ is important as well as mean:

Assume two populations A and B equal in size both with an average IQ of 100. Assume the standard deviation of IQ in Population A is 15 and that in Population B is 30. Assume that IQ follows a normal distribution in both populations. Take an IQ of at least 160 as defining the “genius” level. Then Population B will have not twice the number of “geniuses” but about 718 times the number of “geniuses”.