Q and the Wealth of Nations is a brilliantly-conceived, superbly-written, path-breaking book that does for the global study of
economic prosperity what The Bell Curve did for the USA. 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.
Lynn and Vanhanen review the theories advanced over the last 250 years to explain why some countries are rich while others are poor. These include: climate theories (temperate zones are said to be best); geographic theories (an East-West Axis is said to be best); modernization theories (urbanization and division of labor are said to be good); dependency theories (exploitation and peripheralization of poor nations are said to be bad); neoliberal theories (market economies are said to be good); psychological theories (cultural values like thriftiness, the Protestant Ethic, and motivation for achievement are said to be good). Some of these factors no doubt play a role. But it turns out that IQ that does the heavy lifting.
Next, Lynn and Vanhanen review the scientific literature and find that IQ is an important determinant of educational attainment, earnings, economic success, etc. In the United States and Britain, the correlation between IQ and earnings for individuals is approximately 0.35. (That is, cleverness is a fairly loose guarantee of economic success for an individual, but is significant across an entire population. If you bet on it at a gaming table you wouldn't win on every throw, but you would make a lot of money over an evening.) Of course, it makes sense that intelligence determines earnings. More intelligent people learn more quickly, solve problems more effectively, can be trained to acquire more complex skills, and work more productively and efficiently.
Nations whose people have high IQ levels also have high educational attainment and large numbers of individuals who make significant contributions to national life. On the flipside, nations with low levels of intelligence have low levels of educational attainment and few individuals who make significant contributions. Low intelligence leads to unfavorable social outcomes like crime, unemployment, welfare dependency, and single motherhood.
Lynn and Vanhanen prove that the widespread though rarely stated assumption of economists and political scientists-that all peoples and nations have the same average IQ-is wildly wrong. Their evidence documents substantial national differences in average intelligence. The highest average IQs are found among the Oriental countries of North East Asia (average IQ = 104), followed by the European nations (average IQ = 98), and the mainly White populations of North America and Australasia (average IQ = 98). Further behind are the countries of South and Southwest Asia, from the Middle East through Turkey to India and Malaysia (average IQ = 87), as are the countries of South East Asia and the Pacific Islands (average IQ = 86), and Latin America and the Caribbean (IQ = 85). Lowest are the countries of Africa (average IQ = 70).
Lynn and Vanhanen find that some countries do have higher or lower per capita incomes than their national IQ averages would predict. This is where having a market or socialist economy or sitting atop a sea of crude oil comes in.
Some of the countries with a higher per capita income than would be predicted from their average IQs are Australia, Austria, Barbados, Belgium, Canada, Denmark, France, Ireland, Qatar, Singapore, South Africa, Switzerland, and the U.S. Except for Qatar, South Africa, and Barbados, all of these are technologically highly developed market economies. Qatar's exceptionally high per capita income comes from oil exporting, which is actually managed and controlled by corporations and people from European and North American countries. South Africa's much higher than expected per capita income derives from the high performance of the industries established and managed by the country's European minority. Similarly, Barbados's above average wealth comes from its well-established tourist industry and financial services, which are owned, controlled and managed by American and European countries.
Some of the countries with lower per capita income than would be predicted from their average IQ: Bulgaria, China, Hungary, Iraq, South Korea, the Philippines, Poland, Romania, Russia, Thailand, and Uruguay. Most of these are present or former socialist countries. Iraq has suffered from losing the Gulf War and a decade of UN trade sanctions. The large amount of ethnic conflict in the Philippines decreased growth.
Lynn and Vanhanen provide a detailed examination how well IQ theory stacks up against its competitors. For example, two significant exceptions to the view that a tropical climate is detrimental to wealth are Singapore and Hong Kong, which lie in the tropical zone but are rich. Conversely, Lesotho and Swaziland are temperate, lying slightly south of the Tropic of Capricorn, but poor. These differences, however, can be explained in terms of intelligence theory. The people of Singapore and Hong Kong belong to the ethnic group with the highest average IQs; the people of Lesotho and Swaziland belong to the ethnic group with the lowest.
Modernization theories, according to which all economies would evolve from subsistence agriculture through to various stages of u rbanization and industrialization, have worked for Western Europe and the Pacific Rim but have failed for the four remaining groups of nations (South Asia, the Pacific Islands, Latin America, and sub-Saharan Africa). IQ and the Wealth of Nations proposes that modernization theories describe Western Europe and the Pacific Rim because these countries have appreciably the same or somewhat higher IQs than in the United States. But they did not work for the other four groups of countries because average IQs are below the technological threshold.
But why did the peoples of East Asia, with their high IQs, lag behind the European peoples until the second half of the 20th Century? Well, China's science and technology were generally more advanced than Europe's for around two thousand years, from about 500 B.C. up to around 1500 A.D. But in the 15th century, Chinese inventiveness came to an end and from that time on virtually all the important advances were made by Europeans, first in Europe and later in the U.S. The explanation may be that Europeans developed the market economy, while China stagnated through authoritarian bureaucracy and central planning.
The failure of Japan to develop economically until the late 19th century is largely attributed to a regulated economy and isolation from the rest of the world. By 1867-68 a revolution occurred and the new rulers embarked on a program to modernize Japan by adopting Western education and technology, and by freeing up the economy by transforming state monopolies into private corporations. Much of the Japanese economic success in the 20th century was built by adopting inventions made in the West, improving them, and selling them more competitively in world markets. Japan thereby built up its motorcycle, automobile, shipbuilding, and electronics industries. Although it is sometimes asserted that the Japanese have not made any significant scientific and technological innovations of their own, this underestimates their technological achievements: the fiber-tipped pen (1960), "bullet" trains traveling at 210 km per hour, much faster than any Western trains (1964), laser radar (1966), quartz watches (1967), VHS video home systems (1976), flat screen televisions using liquid crystal display (1979), video discs (1980), CD-ROM (read only memory) disks (1985), digital audio tape (1987), and digital networks for sending signals along coaxial cables and optical fibers (1988).
African countries are at the opposite pole from China and Japan in national IQ. This may explain why they are such a major anomaly for modernization theory. The low rate of economic growth of African countries following their independence from colonial rule in the 1960s is one of the major problems in developmental economics. During the years 1976-98, the average rate of economic growth per capita GNP of the 41 countries of sub-Saharan Africa for which data are available is much lower than in the rest of the world. Many of the African countries actually suffered negative per capita growth rate. Economists have quantified all possible factors, such as climate, ethnic diversity, geography, mismanagement, unemployment and the like, and compared the situation to elsewhere in the world, especially Asia. They concluded that these factors do not provide a complete explanation and that there is some "missing element." Some have suggested the low level of "social capital," i.e., the widespread corruption and lack of trust in commercial relationships, poor roads and railways, unreliable telephones and electricity supplies, and the prevalence of tropical diseases such as malaria.
IQ and the Wealth of Nations identifies IQ as the missing link. Some of these "social capital" are actually manifestations of a low level of intelligence in the populations. Poor telephone services and electricity supplies, low agricultural yields, and the poor advice given by government advisory boards reflect low average IQ. With a mean IQ of 70, the populations of Africa cannot be expected to match the rates of economic growth achieved elsewhere in the world.
Finally, Lynn and Vanhanen peer into the future. They predict future growth is most likely in countries with high national IQ scores but currently bad economic systems. The countries of the former Communist Bloc-Russia, Poland, Bulgaria, and Romania, and the People's Republic of China, and Vietnam-are good bets.
What else can be done? Lynn and Vanhanen also list some of the factors, some environmental and some genetic, that might raise IQ scores and somewhat alleviate the disparities in national average IQ. These include: better nutrition, education and health; and ending the dysgenic fertility trends where the lowest IQ people produce the most children. (Obviously, immigration policy has a role to play too.)
The take-home message of IQ and the Wealth of Nations: national differences in IQ are here to stay and so is the gap between the rich and the poor countries. Political promises that the gap is temporary, and will be remedied by aid from rich countries to poor countries, or even by poor countries adopting appropriate institutions, will not be fulfilled. Such promises assume that all human populations have equal mental abilities to adopt modern technologies and to achieve equal levels of economic development. They do not. The authors sound a clarion call for the recognition of national and race differences in intelligence.
The Bigger Bell Curve: Intelligence, National Achievement, and The Global Economy, 22 October 2001, (PDF version) in Elsevier Science journal Personality and Individual Differences)
IQ and the Wealth of Nations. Richard Lynn and Tatu Vanhanen, Westport, CT: Praeger (2002), 256 pp., U.S. $64.95 (Hdbk.) ISBN 0-275-97510-X
Philippe Rushton is a professor of psychology at the University of Western Ontario.