Game, set, match: HBD

Al Fin and Barking up the Wrong Tree were the first (I saw) to cover the glorious victory of HBD. Its enemies have been ground to dust.

Al Fin links to a GDP predictor than makes a "couple tweaks" to national IQ and economic freedom. Keeping in mind that a correlation of 0.4 or higher is considered pretty strong in the social sciences, what would you guess the correlation for this set of predictors is? If you said anything below 0.97, you’ve underestimated the power of differences in human intelligence.

Here’s Barking up the Wrong Tree summarizing the results:

For each one-point increase in a country’s average IQ, the per capita GDP was $229 higher. It made an even bigger difference if the smartest 5 percent of the population got smarter; for every additional IQ point in that group, a country’s per capita GDP was $468 higher.

I think focusing on the top 5% of people in a country is interesting.

Anyway, it seems to me that if you ever want to cite any research from any social science at this point, you have accept the truth of HBD. I certainly have never seen a social science conclusion stronger than this one.

The haters (kidding, sort of) will fall back on alternative explanations, but I don’t think they work. The way I see it is this: 1) the easiest way to destroy your economy is to radically limit economic freedom and 2) if you want really high levels of income, you need smart people. There’s no other honest way to interpret the results, in my opinion. In other words, an economy made up solely of Australian Aborigines is not going to dominate with respect to levels of income under any sort of economic arrangement – super free economies still can’t make dumb populations into hyper-productive ones.

A conclusion this strong also shows you how much people lie. Think of everyone asking us to spend trillions to reduce global warming because of the "science." We’ve already spent trillions trying to make people smart, which is unlikely to be more successful than spending trillions to make people taller, and anyway, the "science" here is stronger than the "science" there. The same people that worship at the alter of global warming science, won’t even allow themselves to think of the conclusions of this study. So much for scientific integrity.

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5 Responses to Game, set, match: HBD

  1. Handle says:

    This was one of the points of Tyler Cowen’s “The Great Stagnation”. When we compute GDP, we can generally assume that prices, profits, and wages in the competitive private sector are closely related to “wealth creation” or contributions of real value.

    But for monopolistic public sector activity no one has any idea how much “net value” is being created – and it’s almost certain that there are plenty of projects which are “value destroying”. If you spend twice as much money but don’t get any difference in results (see: public education) then you are certainly destroying the alternative-use value of the second half of money. Nevertheless, we just add all these things up at cost.

    Here’s an example – if you build a bridge to nowhere that costs $250 Million, but has a cumulative-present-value of only $10 Million to the 1,000 people who will benefit from the bridge – you just destroyed $240 Million, but it will still be recorded as a positive $250 Million contribution to GDP – almost the exact opposite of the real effect, and net upward distortion of $490 Million.

    The reason this is important is because real GDP per-capita is considered the gold-standard of measuring not just “living standards” but also “national wealth’. But national wealth is a stock whereas GDP is a flow. If we are creating a high (and steadily increasing) flow by drawing down our stock even more then we are on a particular road to ruin called a Ponzi Scheme.

    Another good reason to keep the G/GDP ratio as low as possible.

  2. RS says:

    > For each one-point increase in a country’s average IQ, the per capita GDP was $229 higher.

    So 16 points is worth exactly $4,000 (correlationally, I mean, not causationally)? That’s nonsense. I would say it’s worth about 2.5x. This sounds like a leftist study with a lot of weird ‘variables’. Or, they didn’t extrapolate the growth of China and India and correct for oil, which is stupid to not do.

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  4. Gian says:

    Trouble in these correlations is that giants such as China and India are given equal weights with tiniest countries.

    If the country-averages were weighed according to the population, then we would not be seeing significant correlations.

    • RS says:

      That’s because Mao offed 20 million Chinks. A similar thing happened in USSR, but the horror ended 20 years earlier and they had a large industrial plant left over, plus a nice new empire featuring some races like Poles, Germans, and Estonians that generate more wealth, and much more value add, than Russia. (Russia contributed great art and ballsy, mean, resiliant soldiers.)

      Call back in 20 years, you’ll see China at 38k 2010 dollars and India at 18k. USA, also 38k, down from the prsent 46. For some informative history, see real GDP/head vs time for Singapore, japan, S Korea, Taiwan, Malaysia.

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