If we control for academic qualification, there is zero or negative return on IQ within a country. That is to say, of two people of different IQ but same country and the same academic qualification, the smarter one will have similar or lower socioeconomic success.
If we do not control for academic qualification, IQ still does not make a very large difference. Of two people of very different IQ, but the same country, and academic qualifications typical for their IQ, the much smarter one will not be much richer
I think it likely that this is a manifestation of the observed fact that high IQ people tend to be nerds, socially low status, tend to get in trouble socially.
However, if we compare between countries, countries where people have slightly higher average IQ tend to be much more prosperous than similar countries with slightly lower average IQ.
A two standard deviation difference in an individual person’s IQ predicts only about a 30% difference in his wage. But half a standard deviation difference in a country’s average IQ score predicts a 200% difference in the average wage in that country.
Why do high IQ people do so badly?
Suppose you have a bunch of people together. And the crowd makes a mistake about X, or, which comes to much the same thing, a high status person in the crowd makes a mistake about X. The high IQ kid is going to say “X is wrong”. But no one else in the crowd can tell whether X is right or wrong. They will think it is a matter of opinion, like what flavor of icecream is better, or a matter of authority, an arbitrary rule decreed by someone, and this kid is wrongfully claiming authority to decree that rule.
And will conclude that the smart kid is inappropriately throwing his weight around, is acting inappropriately for his status, they will be insulted, offended, and angered at what they incorrectly perceive as a claim of status and authority. And so will attempt to correct his swelled head, will tell him his status is low, and his status claim inappropriately high.
So the smart kid in the group, like the stupid kid in the group, is going to wind up at the bottom – and very likely with an income to match. The high IQ kid is going to be a social failure in a group where the majority is stupid.
In the kingdom of the blind, the one eyed man is at the bottom.
So if you want society to be run by smart people, that society has to stream the kids, group smart kids with smart kids, and dumb kids with dumb kids, and get its leadership from the leadership that emerges from leading the smart group.
If, on the other hand, society thinks that everyone should go to university, and the elite universities select their students primarily on political correctness and cultural similarity to the existing elite rather than smarts, then your society is going to wind up being run by people who are not much brighter than average, and most of the wealth and power is going to be in the hands of people who are not much brighter than average for that country.
The smart group will do well, but the smart individual will do badly. Thus a smarter country is much richer, but a smarter individual is little richer, and may well be be poorer.
It follows that the way for the smart kid to succeed is to get in with a smart group of about his own intelligence that is in charge of its own destiny, get in on the right track early, and the way for a country to succeed is to make the formation of such groups easy and natural.
Tags: decline of the west