Economic Parasites

A question that’s oft-perplexed economists is why some countries are so much less successful, economically, than others. Huge reams of research have been generated developing a wide range of theories until eventually someone came up with the obvious answer. Poor countries are poor because their people are stupid.

Fortunately what’s the obvious answer to one set of researchers is the departure point for another group. It turns out that while the simple and straightforward answer has an element of truth about it, it’s only a small part of the story.

Objective Research, Subjective Opinions

It’s an unfortunate fact that dispassionate scientific research is rarely very dispassionate. Sometimes it’s not very scientific either, but there’s a tricky grey area where the research is genuine, the results are clear-cut but the interpretation is bound up in people’s perception of the subject under analysis. We approach all topics in the light of our expectations and a lot of us aren’t very good at changing our minds when it turns out we’re wrong. One of the areas where this happens all too often is the analysis of human intelligence.

To start with it’s actually pretty hard to define ‘intelligence’ and there’s plenty of debate about what IQ tests actually measure. As discussed in What’s Your Financial IQ? it’s far from obvious that it’s intelligence however you define it. Arguable it’s the ability to take IQ tests, but even if we leave that aside and agree that there is one number that defines human intellectual capacity that tells us very little about the native intelligence of any person or group.

A History of Intelligence

It’s no coincidence that the history of intelligence testing has been wrapped up with questions of social class in the UK and racial identity in the US because these have been subjects of huge social interest in those countries. The originator of this line of thinking was Francis Galton and, as we saw in Regression to the Mean: Of Nazis and Investment Analysis, it was based on a mis-interpretation of the biology of mean regression.

So studies down the years have claimed to show that the UK’s lower social classes and the US’s black population exhibit, on average, lower intelligence than higher social classes and the non-black population respectively. More nuanced commentators have been unable to avoid pointing out that the researchers invariably come from higher social classes and the non-black population. They wonder, idly, whether the research is finding what its instigators want to find.

Once again let’s put this argument to one side, with the observation that even if these groups do have lower I.Q. test results, whatever that means, that this says nothing about innate abilities. Nothing here tells us whether intelligence is something we’re born with or something we develop as we mature through growing up in a nurturing environment. After all, if you take two hothouse plants, one with yellow flowers and one with red and place the yellow plant in a hothouse and the red one in a cooler we don’t generally conclude that the red variety is genetically inferior.

Poor by Colonisation

Unfortunately such a nuanced view doesn’t sell books or gain publicity so it’s usually only when someone starts making controversial ‘scientific’ statements about the topic that it gets (another) hearing. Given this history it’s perhaps a bit surprising that it’s taken as long as it has for someone to come up with the idea that the reason poor countries are poor is that they’re home to an above average number of below average intelligent people.

As we’ve seen previously in History’s Financial Shadow research has suggested that a country’s economic wealth is somehow bound up with its geography and/or its history: it certainly seems that both have some role to play. A historical legacy of strong colonial institutions seems to be predictive of better economic development and one suggestion is that where geography prevented effective colonisation by Western European nations the colonised country suffered a double whammy – not only did the coloniser not introduce powerful institutions but they also tended to damage the country’s existing ones by stealing everything they could and exploiting the native population something rotten.

Poor by Nature

Anyway Richard Lynn and Tatu Vanhanen have hypothesised that the reason for the poor economic growth in the world’s poorest nations wasn’t history or institutions – at least not directly – but the lower intelligence of their peoples. And when they did the analysis that’s more or less what they found. Ignoring arguments about the nature of intelligence testing the research provides a powerful set of data suggesting that the basic hypothesis is correct.

This, of course, is a dispiriting result, however true it might be. It suggests that attempts to help such countries are forever doomed and, to be honest, the idea that people are destined to a life of poverty simply because they’re born in the wrong place is a fairly gloomy prognosis for humanity generally. Although not all of us can end up bestriding the globe like colossi – or at least earning enough to go on holiday – it’s at least a pleasant conceit to think we all have the possibility within us.

Still, the finding doesn’t quite end the story because it’s one thing to discover that the poorest countries have the dumbest people – and to make the connection between the two – but it’s entirely another to understand why this is the case. It’s easy to conclude that this is simply the way things are – just as researchers into intelligence differences between the social classes in nineteenth century England “proved” that the lower classes were dumber, while ignoring the effects of poor sanitation, dreadful diets and working conditions that make today’s third-world sweatshops look like pleasure palaces.

Poor by Parasite

Eppig, Fincher and Thornhill wondered if something similar was happening to the people in the world’s poorest countries and started casting about for something in the environment that might impact brain development. Once you do that it isn’t too hard to come up with ideas and one of the more obvious ones is the impact of disease and, in particular parasites, on cognitive development. Perhaps, they hypothesised, parasitic infections were redirecting the resources of developing bodies away from the brain, leading to poorer development of cognitive functions.

Well, they did their research and, subject to all the caveats that science requires, what they found essentially confirms their hypothesis. As they relate in Parasite Prevalence And The Worldwide Distribution Of Cognitive Ability poor countries are indeed poor because their populations are less intelligent. However this is nothing to do with innate ability but is because they’re infected with parasites in infancy because disease prevention systems are inadequate because their countries can’t afford them because they’re poor. Or: countries are poor because they’re poor, but also because they’re directing what money they have at the wrong targets.

In fact this suggest an area that foreign aid budgets might usefully be spent in, rather than delivering large amounts of cash to morally suspect and dubiously mandated leaders. Directly supplying mosquito nets and water purification systems is likely to do far more to raise more people in poor nations out of poverty than any number of other, more worthy schemes.

Benficial Economics

It’s refreshing to find an intelligence related study that goes beyond the obvious idea that poor people are poor because they’re stupid to try and figure out why they’re stupid. The human brain is an incredibly plastic system, capable of dealing with all sorts of trauma and coping with completely unpredictable situations. It’s implausible to the greatest degree that variations in cognitive development across class, race or country are genetic in origin.

It’s all too easy to feel that economics is about a bunch of smart people coming up with wacky theories and then promoting them assiduously without feeling any responsibility for the effects they cause when implemented. Quite often this is true, but not always – sometimes you find a study that is genuinely enlightening and helps us change the world for the better. It’s just a bit sad that usually it takes a non-economist to do the research.

Related articles: Intelligence Can Seriously Damage Your Wealth, What’s Your Financial IQ?, Money and Minds