Investing in HBD

I posted a disagreement with Mitt Romney’s blogging headquarters (Half Sigma, whose blogging I generally like, but I can’t resist some of his . . . excesses) a while back. Specifically, I objected to his assertion that elites don’t believe in HBD.

The only way to understand elite actions is by assuming that they believe in HBD. For example, why else would they live in enclaves of other elites safely separated from minorities?

HS responded, without linking to my post, by suggesting that you invest in Australia. How would that strategy have worked out? Comparing EWA (an ETF that covers Australia) with EZA (an ETF that covers South Africa), you find that . . . South Africa has done better, by quite a bit. The stability of countries like Australia is priced into its equities already. Investors pay a premium for investments in countries that follow the rule of law, etc.

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40 Responses to Investing in HBD

  1. Hail says:

    It looks like EZA and EWA tracked each other quite well through late 2008.

    The financial crisis affected Australia worse than it did the RSA, it seems.

  2. Hail says:

    Half Sigma wrote:What’s the benefit of knowing the truth about HBD if it doesn’t make you money?

    This is a deeply cynical thought.

    Is he just being ironic, or is Half-Sigma, a prominent Jewish blogger, really clumsily walking into a Jewish stereotype, just like old Sheldon ‘Shalom’ Adelson?

    Steve Sailer points to this line about Adelson, by the way: “If [someone] sought to invent an individual who symbolizes almost all the anti-Semitic clichés that have dogged the Jewish people throughout history, he could hardly come up with a character more perfect than Sheldon Adelson. Think about it. Adelson, who likes to brag, “You know, I am the richest Jew in the world,” is a gambling magnate who is reported to be under criminal investigation for official bribery and has been accused of having widespread ties to organized crime, including the use of prostitution for his business interests. He is openly deploying his $22 billion fortune to pervert our democracy on behalf of what he believes to be the best interests of Israel, which he defines as an endless war by the Jewish state against its adversaries.

  3. Jehu says:

    The entire school of value investing is based on the premise that human beings feel losses of X about as negatively as they feel gains of 2X positively. So they look for things that are bad, but not as bad as Mr Market collectively thinks they are. South Africa has a massive amount of political risk boiled into the prices of equities that are exposed to it. It also hasn’t gone to hell in a handbasket quite as quickly as Mr Market thought it would. Thus it has been performing well in the market. You can sometimes find similar bargains in the oil sector, where the market presumes a level of risk of nationalisation or other malfeasance that is higher than the actual risk—e.g. Conoco’s dealings in Russia from a few years back.
    Foseti is correct on the main point though, it is hard to make money with HBD because most everyone—especially in the financial markets—behaves more or less exactly like they would if they were racist zenophobic HDB fanatics.

  4. Vladimir says:

    Foseti,

    Half Sigma is absolutely right about this one. Outside of a tiny academic and blogospheric fringe, people really do consider the idea of genetically caused cognitive group differences as unimaginably extremist and completely beyond the pale of decent and civilized discourse. Believing it is considered essentially equivalent to being a Nazi. (And only more creepy if it comes from someone who otherwise seems like a decent and smart person.)

    Here are some sobering numbers from Inductivist:
    http://inductivist.blogspot.com/2010/12/there-is-no-silent-but-sensible-hbd.html

    (Not that I have much respect for GSS social science in general, and some of the objections raised by his commenters are certainly valid, but the numbers definitely look plausible to me.)

    Now, you say:

    The only way to understand elite actions is by assuming that they believe in HBD. For example, why else would they live in enclaves of other elites safely separated from minorities?

    Well, they simply want to insulate themselves from low-class people and the associated social pathologies. Of course, low social class and social pathologies do correlate with race, but it’s easy to invent plausible theories that explain this situation without any underlying genetic causes. Now, whether these theories can stand up to a rigorous intellectual scrutiny is a whole different question, but they are perfectly adequate for people’s everyday purposes. Elites will avoid low-class people no matter what they believe to be the cause of their situation.

    • Foseti says:

      May there’s a semantic distinction here, but I still think I’m right. Perhaps a person doesn’t say he believe in HBD, but he acts exactly as if he did. In this case, I’m saying he believes in it – what he really thinks is immaterial. Actions matters, pretty lies people tell themselves don’t.

      • Vladimir says:

        Whether the observed group differences are genetic or cultural has absolutely no bearing on people’s personal decisions about housing, finances, family, etc. If person A believes in a culturalist theory of group differences, and person B in a hereditary theory, can you think of a single example where this will lead to a different important decision in their private lives? Saying that person A acts exactly as if he believed in HBD is as true — and as irrelevant — as saying that person B acts as if he disbelieved in HBD.

        On the other hand, when it comes to people’s actions that are motivated by political and ideological beliefs, it makes an enormous difference on a great many issues whether they believe in HBD — and from this we see that almost nobody believes in it. The overwhelming majority of people will react with sincere revulsion against the idea of hereditary group differences, they’d never vote for someone espousing them, they’ll support all kinds of government policies that assume there are no such differences, they’ll even donate money to philanthropic causes based on the same premise, and so on. You make it sound like they do all this out of sheer duplicity, but their beliefs are in fact quite sincere.

      • Doug1 says:

        Vladimir, you’re right about what people feel free to say in public, particularly if they run in college educated or mixed white and black race circles.

        However most white and Asian people (and I think a lot of blacks too though they lie a lot to themselves about it as well) know that for whatever reason that the average white, NE Asian and the type of Indian we let into this country is a good lot smarter than the average black, that by far most really, really smart people are white or Asian, and that there are a disproportionate number of dim blacks who don’t do well in school esp. by high school or even junior high, and so on.

        I think most people also really think that at least some of this “runs in the blood”, is in-born, aka is due to genetic differences. But everyone knows that that’s very taboo under political correctness to say. (It was a lot less taboo even as late as the 1950s.) Also even HBD hereditarians of the scientific and knowledgeable sort such as Jensen and Rushton think on the basis of their research and research they’ve reviewed that genes (under current American social conditions) likely only account for 50-80% of the racial gap in IQ, with the rest of the causation being cultural and a little bit socioeconomic. (Of course the genetic differences can and do feed back into cultural and socioeconomic differences in varying degrees between individuals.)

        The question Inductivist’s graph is based on was this:

        ””On the average, blacks have worse jobs, income, and housing than white people. Do you think these differences are because most blacks have less in-born ability to learn?””

        The absence of a word such as “partly” before “because” suggests that the question is asking if it’s entirely due to what’s in-born aka genetics. Whites by the 70’s certainly had been thoroughly propagandized to believe that past and ongoing discrimination and racism had hurt black achievement and hence socio-economic status, and most also believed by then and before as well that cultural differences played a role. So answering yes to that would be considered extremist. I wouldn’t answer yes to that question phrased that way and I’m a HBD race-realist.

        Since cultural Marxism aka the new left took over the humanities and social sciences in American universities beginning in the sixties mostly and greatly influenced the media, it’s become politically incorrect to just let social sorting take it’s course and to not support continuing efforts to close gaps. The more the gap is due to genetic differences the less likely it seems possible to do so. Therefore people know they should emphasize the cultural and socioeconomic causative sides, if they even mention the gaps at all.

      • Bill says:

        Vladimir says:

        If person A believes in a culturalist theory of group differences, and person B in a hereditary theory, can you think of a single example where this will lead to a different important decision in their private lives?

        Yes. If you are a culturist, and you see large agglomerations of middle class blacks forming neighborhoods, you should predict that those neighborhoods are going to do about as well as middle class white neighborhoods. In fact, you should move there to take advantage of the cheap housing. If you are an HBD believer, you should predict regression-to-the-mean-mediated disaster in one generation and run away.

        Produce for me the liberal white people who flocked to Prince George’s County in the 1980s to take advantage of the low housing prices amongst the “middle class blacks.” Produce for me the liberal white people who flocked to Atlanta’s various “middle class black” neighborhoods in the 1980s.

        Obviously, one can spin silly, post-hoc theories to deal with all the failures of culturism. But this is the OP’s point. Nobody bright believes these theories. Certainly not the people thinking them up.

    • rightsaidfred says:

      Now, whether these theories [of culture only differences in human behavior] can stand up to a rigorous intellectual scrutiny is a whole different question(Vladimir)

      Looks to me like you are ceding the point. I can avoid a snarling pit bull and claim such dogs have been acculturated to bite, but my behavior acknowledges the underlying bio diversity, even if implicitly. That you entertain the notion tells me you know the story.

  5. spandrell says:

    I’m with Vladimir on this one. Never underestimate people’s rationalization hamsters. You can frame reality in many ways.
    But most people will not, cannot accept genetic determinism. If people really thought that blacks are hopeless they wouldn’t vote for Obama.

    • Hail says:

      The people who voted for Obama were :

      1. Nonwhites (by better than 3-to-1, IIRC)
      2. Whites who do not live around (m)any Nonwhites

      • spandrell says:

        Well I didn´t say why they don´t believe in hbd. But the fact is they don´t.

        Please note that hbd doesn’t mean that blacks are dysfunctional. It means that blacks are dysfunctional because of their genes. Not even the reddest gun-toting rednecks believe that.

      • rightsaidfred says:

        It means that blacks are dysfunctional because of their genes.

        HBD just says we’re biologically different, genes being one critical component.

        The dysfunctional of today may be the heroes of tomorrow.

      • Hail says:

        Spandrell wrote:
        Not even the reddest gun-toting rednecks believe that.

        Likewise, very few people in the old Eastbloc officially believed that Capitalism was a superior system to Socialism.

        The scale of 1980s belief in Communism among Soviets born in, say, the 1950s-1960s is very hard to measure, specifically because espousing anything else was consciously rejecting the ruling ideology, with all the penalties associated therewith.

        The same bias affects all social surveying in today’s USA (and its satellites) on the Race Question.

      • Doug1 says:

        HBD race realism says that part of why blacks have lower IQ’s is because of their genes, but the cultural differences such as parenting styles and socioeconomic status differences also play a role. Of course there are gene feedbacks into cultural differences and socioeconomic ones.

  6. Hofrath says:

    Vladimir, may I suggest you read a bit Robin Hanson? The guy is a nutjob in many ways, but his ‘homo hypocritus’ stuff is dead on. He basically says we’re designed to say (and better yet even think!) one thing and do another. It’s a very neat ability if you want to achieve a competitive advantage over other people and reality shows it works perfectly.
    Let’s say you want to live in a neighborhood with people like yourself. The obvious and -more importantly- obviously clumsy way is to just go out advocating for segregated neighborhoods. Congratulations, you are a racist now.
    Smart people advocate for expensive environmental zoning laws, pricing out exactly the kind of people they don’t want to associate with. Congratulations, you are not only not a racist, you have even been awarded the halo of a champion of the environment.
    If you start to look at elite behaviour like this it not only starts to make sense, it’s actually hard not to admire the mechanic at least a little bit.

    • Hail says:

      Certain US-Whites in multiracial areas refuse to run mass-transit through their areas for the same reason. Ask Foseti why there is no ‘Georgetown’ Washington Metro station, for example.

    • Vladimir says:

      I am well familiar with Hanson’s theories, but there isn’t really any need for hypocrisy on the issue of HBD vs. culturism. A culturist theory will motivate you to insulate yourself from dysfunctional groups, and to be pessimistic about investing in places inhabited by them, just as strongly as a hereditarian one.

      The reason people do need hypocrisy is that even culturism is highly politically incorrect nowadays. (Though of course nowhere in the same league as HBD.) A truly respectable position is that the members of dysfunctional groups are in fact wonderful people who are somehow forced into dysfunction by discrimination and oppression. Now this is clearly something that the elites contradict with their own behavior, and where they display pious hypocrisy.

      So, basically, it seems to me that educated people nowadays are generally de facto culturists who give duplicitous or self-delusional lip-service to the respectable theories of oppression/discriminaton. But it’s completely wrong to conclude from this that they might secretly espouse far more extreme positions such as actual HBD.

  7. Vladimir says:

    Also, it seems to me like most people here have had their perspective distorted by reading reactionary/HBD blogs. This tends to make one feel as if there is some ongoing wide public controversy about these issues. There isn’t.

    Unless you go digging through abstruse academic literature by people like Arthur Jensen, the only thing you’ll ever hear from the respectable mainstream academia, media, education, and publishing is that HBD has been long proven false by science, and the only people who might believe otherwise are those severely deluded by extremist ideology, much like Holocaust deniers. This is what every educated Western person has been told by every respectable and authoritative source for their whole life — except for one in maybe ten thousand (and that’s to be optimistic) who has been exposed to the HBD blogosphere or the technical academic literature on the subject.

    Lots of people here reason as if the typical educated person is familiar with coherent and well-argued HBD positions, so they’d have to explain or rationalize them away. That’s just wildly off the mark. The overwhelming majority believes, based on the unanimous voice of every intellectual authority they’ve ever encountered, that this is simply a settled scientific issue where the consensus is doubted only by frightful crackpots.

    • Doug1 says:

      Lots of people read Steve Sailer, Heartiste/Roissy and Derbyshire.

      • Vladimir says:

        “Lots” is a relative thing. We’re talking about a few thousand people among the four hundred million inhabitants of the Anglosphere.

        This is what I meant when I said that reading HBD blogs can distort your view. It’s similar to the way reading libertarian blogs can make you think that every other person must be a libertarian, whereas I’ve never met a single one in real life.

        And things are even worse in the rest of the Western world. In most of Europe (perhaps even all as far as I can tell), Gouldian positions are taken as gospel with a far stricter consistency, even on questions of individual differences.

      • Nyk says:

        “In most of Europe (perhaps even all as far as I can tell)”

        I wouldn’t go that far. Many people in Eastern Europe hate Gypsies, and even though most probably are culturists, there are definitely some who understand the problem is also one of genetic nature. However, there is definitely a sort of chilling effect coming from Brussels and the suicidal Western Europe, which means that not many people will mention the genetic explanation for Gypsy failures in public. I predict that, in a few decades, E.Europe will be successfully indoctrinated into Cultural Marxism.

        (Notice that? Even the term “Cultural” Marxism gives off the wrong idea; it’s a sign that the Right has already moved too much to the left to accept our ideas)

      • Doug1 says:

        Vladimere–

        “Lots” is a relative thing. We’re talking about a few thousand people among the four hundred million inhabitants of the Anglosphere.

        I would guess more like a few hundred of thousands collectively.

        It’s only the top 10% or so in IQ who make opinion. I’d guess about 90% of those that read such sites, are in that group. And mainly in the top 5-1%.\

      • Konkvistador says:

        Your sense of scale is completely off on this. “Lots of people” which basically amounts to a few thousand scattered anon internet lurkers dosen’t begin to approach *millions* of educated Westerners needed before this would be a public controversy.

    • Bill says:

      This is all true, but a non-trivial fraction of (US) whites have had actual contact with relatively representative blacks during their lifetimes. See Hail’s comment above at 8:37am. Whites like Matthew Yglesias are hothouse flowers—you have to try really hard to keep your children completely isolated for their entire lives. These hothouse flowers are over-represented among high SES whites, of course, so it’s easy to get the idea that they are very common.

      There was not ongoing, wide public controversy about what the world would be like when socialism was universal in the old USSR. And for the same reasons. It is very easy to modify what people say they believe (“preference falsification” in Timur Kuran’s apt phrasing). it’s why revolutions look impossible in prospect and inevitable in retrospect, for example.

      • Vladimir says:

        Bill,

        Yes. If you are a culturist, and you see large agglomerations of middle class blacks forming neighborhoods, you should predict that those neighborhoods are going to do about as well as middle class white neighborhoods. In fact, you should move there to take advantage of the cheap housing. If you are an HBD believer, you should predict regression-to-the-mean-mediated disaster in one generation and run away.

        I don’t think it’s that simple. The whole regression to the mean issue is a source of huge confusion on this topic. (In particular, I find it a source of frustrated puzzlement that Jensen, an otherwise very clear writer, has been making obviously confused arguments about it for decades.)

        Regression to the mean is a complicated and counter-intuitive problem: it is perfectly compatible with various environmentalist theories, and at the same time contradicts some of the hereditarian theories. (To illustrate using extreme examples, if all behavior and ability were purely hereditary in a simple additive way, there would be no regression to the mean — whereas if all group differences were somehow caused purely by discrimination, there would be a strong one.) So, even if people actually make decisions expecting regression to the mean, that doesn’t mean they are using a hereditarian theory.

        But at any rate, I don’t think people think this way at all. There are many ways in which cultural differences might make people bad neighbors even if they quality as middle class by some general measures. I think it’s a much more plausible explanation. Now, of course, if people spelled out their de facto thinking on this topic, they’d still end up with something badly un-PC — but there’s no reason to think that it would go all the way to HBD. Remember that between the boundaries of the respectable opinion and HBD, there is a vast array of increasingly un-PC (and yet not hereditarian) views about racial issues.

      • Bill says:

        Vladimir,

        Yes, I agree that there is an intellectual tension between the linear models used in studies of heritability and regression to the mean. You need some kind of non-linearity to get regression to the mean.

        The fact that regression to the mean is compatible with various environment theories isn’t very interesting to me. The bad guys have very clearly taken up the strategy “as long as we can think of any environmental theory or set of theories which rationalize the data we have now, we are going to assert that environmentalism is true and mandatory.” The fact that these theories are ad hoc, complex, difficult to test, and ever-changing ought to be a signal to us. In the human sciences at least, there is no hope of ever getting evidence convincing enough to put to bed all the bad faith arguments anyone can come up with. Genetics should be the null hypothesis at this point.

        By my recollection, the usual suspects claimed to believe that middle class black neighborhoods were going to prove the evil racists wrong. Now that they have decayed into nasty holes, of course there are going to be theories of why this doesn’t prove anything about nurture or culturism or whatever.

        Not that nature/nuture is really critical. Environmental or cultural theories which do well with the data are almost certain to predict behaviors which are not particularly malleable under known, feasible interventions. We’ve been intervening for a while to no good effect.

        But I, for one, don’t believe in non-malleable culture, except to the extent that such culture is really nature in disguise. Why should I? Cultures change all the time. Non-malleable culture is just another level of ludicrous ad hocery. Or at least so it seems to me.

      • Doug1 says:

        Vladamir–

        Regression to the mean is a complicated and counter-intuitive problem: it is perfectly compatible with various environmentalist theories, and at the same time contradicts some of the hereditarian theories. (To illustrate using extreme examples, if all behavior and ability were purely hereditary in a simple additive way, there would be no regression to the mean — whereas if all group differences were somehow caused purely by discrimination, there would be a strong one.)

        This is all untrue. Regression towards different means of black versus white children is strongly indicative of a strong genetic influence in IQ differences. Environmentalist theories have a very hard time explaining it. Regession occurs for probabilistic reasons because there’s an element of chance in which of our ancestors genes we inherit. Really smart people probably received a really lucky roll of the die. But that only happens rarely. On the other hand ancestries vary in IQ as well.

    • Doug1 says:

      You’re exaggerating Vladamir. The Bell Curve sold 400,000 copies.

      I think it’s clear that by far most human geneticists know that differences in intelligence are partly determined by differences in genes, and that differences in intelligence between human population groups (the current genetics euphemism for race) are partly caused the genetic differences as well. Most research psychologist know the same thing. They also know it’s dangerous for their career to say so.

  8. Anonymous says:

    I may have a slightly different perspective on this matter than a lot of you. From what I’ve gathered, a lot of the people who comment at this blog generally started off libertarian, conservative, or uncommited in their beliefs before they made their way to monarchism / autocracy / formalism etc.

    I’m different. My parents are two ex 60’s political activists who had high status jobs in state government. I’m a gay Buddhist who spent the last two years doing manual labor. I read Mother Jones and Matthew Yglesias. One day, while resting in civilization, I found Moldbug’s blog through a series of blogroll links. I read his 7 part introductory series that day.

    For me, it was the red pill. All of the petty thought crimes I had suppressed with thoughts of “Institutionalized Racism!”, “Jim Crow!”, or “Implicit Association indicates…” came flooding back into my brain. The possibility of HBD was a question my subconscious had worked very hard NOT TO EVEN ASK, because of course, I knew it wasn’t true… right?

    I would say most people I know are this way – and my peers are university educated engineers and liberal arts majors from good schools. The response is so ingrained and automatic, it often doesn’t happen with any critical reasoning or processing.

    • Hail says:

      You are right that it is instinctual for Whites by this point. (esp. those born after 1975 or so).

      What you are wrong about is the scale to which Whites question their own socializations on this matter. Those Whites from multi-racial areas with anything like inquisitive minds, I find, usually do question their socialization to one extent or another. Aware of the social penalties for racism, though, most don’t make too much noise about it.

      It hurts that there is no coherent opposition to the Multicultacracy.

      • Bill says:

        You don’t even have to have an inquisitive mind. I know a gym teacher in a public school which was once white but is now mixed race and on its way to being black. He does not have an inquisitive mind. I know that if he is in a bar with all white patrons at a table of people he at least sort-of trusts and with a beer or three on board he becomes quite HBD.

        I attended a high school which was mixed children-of-yuppies, children-of-tradesmen, and (non-oreo) blacks. I knew of no non-racist children-of-yuppies and no non-racist children-of-tradesmen. That doesn’t mean there were none, of course. In the 1980s.

        The problem is, as you say, figuring out the scale of the phenomenon. I’m confident it is big, but how big? Is it 20% of “non-racist” whites who are, in the privacy of their thoughts, racist? 40%? 80%? I don’t know.

      • Foseti says:

        Everyone’s an HBDer after a few beers.

  9. Vladimir says:

    Bill,

    I don’t think we have much disagreement, except that you must remember that we’re not discussing which theory is more plausible when all evidence and arguments are considered objectively. Rather, we’re discussing the opinions of typical people (including typical educated/high SES people), who have never given this topic any careful thought — and who have lived their whole lives under a constant barrage of pronouncements by all the respectable intellectual authorities that the idea of HBD is both conclusively false and monstrously evil.

    In this situation, you can’t expect people to have a coherent and well-thought-out positon. They’ll much sooner build a convoluted web of rationalizations than to ever permit themselves to think something that would, according to every intellectual and moral authority they have ever known and respected in their lives, put them in the category of hideous crackpots and villains.

  10. Vladimir says:

    Doug,

    Re: regression to the mean, there is no explanation that would be both simple and plausible, whether hereditarian or not. It is however easy to construct convoluted, implausible, and/or fallacious explanations both with and without heredity involved. On the whole, the issue is awfully confused and muddled, with plenty of bad arguments coming from all sides.

    In any case, if it seems to you like there’s a clear-cut, simple, and correct hereditarian argument to be made out of it, you are mistaken. Not even Jensen has been able to come up with one. (And I’ve read many of his writings on this issue carefully, as well as other authors’ responses to them.)

    • spandrell says:

      We don’t even have good data on regression. Or on IQ. It’s all an awful mess. They won’t allow for hereditarian theories to even be tested.
      Hardly hbd’ers fault that our theory isn’t 100% sound, is it?

      • Vladimir says:

        I meant specifically the arguments over regression to the mean, not the totality of the HBD arguments proposed by Jensen. On most other aspects of the issue, his thinking and writing has always been very clear and lucid. But on this specific one, he has really been making inconsistent and confused arguments unnecessarily.

      • Doug1 says:

        Vladamir–

        You’ve offered absolutely nothing to back up your claims against Jensen on regression to the mean. Razib Khan thinks it works in the same way. Wikipedia says similarly, not that wiki can’t be wrong, but regression isn’t in the front line of political back and forth. Everything I’ve ever read on the subject says similarly.

        So where’s the beef Vladamir?

    • Doug1 says:

      The gene-environment interaction is clearly complex.

      It should be noted though when talking about individual differences in IQ as opposed to group differences, that a good lot of what doesn’t look to be clearly caused by genetic causes does look to be caused by chance or highly complex in occurrence, non shared (parental home) environment events, such as illnesses, particularly influential teachers or mentors who took a real interest, and so on.

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