Categories:
Economic Growth
Human Capital
From my latest essay:
As we get wealthier, we also become enhanced physically, cognitively, and morally, leading to a virtuous cycle of improvements to the standard of living. As the economy improves, human cognitive ability and moral reasoning improves, which helps markets to work better and makes the process of innovation more productive, leading to greater wealth, more mental and moral development, and so on.
READER COMMENTS
conchis
Jan 12 2007 at 9:17am
The link between improved cognitive ability and moral development strikes me as depending on people acting as moral truth-seekers. Otherwise its possible that people may just become better at justifying their preconceived ideas. Correct me if I’m wrong, but it seems that you, Tyler, and Robin have all at some point made suggestions similar to this (Tyler and Robin in their work on self-deception, and you in your suggestion of a high investment strategy for avoiding truth).
AJ
Jan 12 2007 at 9:45am
A very important issue. The moral component of economic development (and business)is typically overlooked. The larger baby-boomer generation for example seems to put no weight on integrity (agreement between what you say and reality or what you do or what happens), but more weight on good intentions, hence the decline of contracts as a mode of thinking about human interaction. Academia (and economics) is full of perspectives and models whereby people don’t tell the truth, can’t be expected to be honest, etc., but my experience in business as compared with my early academic life is that I’ve never met a billionaire or successful person who told one thing to one person and another to another – there’s just no power in getting things done otherwise. This is not true in places like Mexico and the Middle East. Perhaps its nothing more than an expectation in America that everything will come out and be known sooner or later. I realize there are exceptions, but those who do business around the world have to be struck by the differences.
Sigve Indregard
Jan 12 2007 at 10:20am
Your theory, sir, is grossly implausible.
Your theory would lead us to the conclusion that the wealthiest among us are the most ethical/moral, healthy and cleverest. Clearly, this has no basis in reality. Corruption proves this wrong – and there has been many rich people with bad physical health, bad cognitive skills and terrible moral.
Obviously, you will reply that this isn’t about individuals, but societies. But that implies nothing about the market as such – strongly regulated economies (think the Nordic countries) have better health (physical) and much lower crime rates (moral) than for instance the US.
It does, however, repeat the obvious statement that people who can afford education and healthcare, and survive without stealing or killing, are more healthy, educated and moral than others.
Buzzcut
Jan 12 2007 at 11:19am
There is absolutely an IQ component to this. Higher IQ gives you foresight. Impulsiveness is damped.
How much raw criminality is just people not understanding the long term consequences of their actions? I mean, for example, what are the long term benefits of knocking over a liquor store? What are the benefits, what are the costs? Having a higher IQ gives you more of an ability to do that calculation in your head.
Now, maybe high IQ also allows you to better pull off accounting fraud, or tax fraud, or other white collar crimes. But Tom Skilling didn’t kill anybody. If the world was such that the only crimes were white collar, it would be a much, much better place.
Buzzcut
Jan 12 2007 at 11:21am
>>Your theory would lead us to the conclusion that the wealthiest among us are the most ethical/moral, healthy and cleverest. Clearly, this has no basis in reality.
Clearly? Clearly? I don’t think that it is clear. In fact, I think the contrary is clear.
Wealth and IQ are correlated. Health and IQ are correlated.
matt
Jan 12 2007 at 12:04pm
Dr. Kling,
I enjoyed your essay and I think your conclusions are relevant and decent.
However, the Pinker quote at the beginning of your essay is a questionable inclusion. I agree that wealth has grown for many and that there may be less violence because of the creation of wealth, but Pinker uses a broader stroke and says “… the most important and under appreciated trend in the history of our species: the decline of violence.”
It is difficult to support the idea that there is a (long-term) trend that would show the human population is experiencing less violence since the 16th century or from any other time. For example, in terms of the length of human history, neither World War was “that” long ago. Neither was the Rwandan genocide. Neither was yesterday. Indeed substantial economic freedom available in many places breeds cooperation between individuals and inevitably allows a better existence. But I dare say that this phenomenon does not exist presently for a (really big) number of people in the world and that those people and their cats should be wary of Mr. Pinker’s optimism.
Ryan
Jan 12 2007 at 1:34pm
Didn’t William Godwin make a similar argument? Of course, he made a bolder argument — as I recall, not only would increasing intelligence and rationality lead to greater morality and health, but ultimately the practical abolishment of the state, death, sex, and, for some reason, last names.
Mr. Econotarian
Jan 12 2007 at 3:36pm
There has been a lot of study of the relationship between IQ and GDP…
http://en.wikipedia.org/wiki/IQ_and_the_Wealth_of_Nations
For example, a recent paper found that increase of 10 points in mean IQ results in a doubling of the per capita GDP.
Also, economic development does encourage less war:
http://www.columbia.edu/~eg589/pdf/deaddev_06082005.pdf
“(Economic) development reduces casualties for both developed states and for their opponents (developed or not).”
http://www.columbia.edu/~eg589/pdf/gartzke_ajps_0107.pdf
“Economic development, capital market integration, and the compatibility of foreign policy preferences supplant the effect of democracy in standard statistical tests of the “democratic peace”. Infact, after controlling for regional heterogeneity, any one of these three variables is sufficient to subsume the impact of regime type on wars, militarized interstate disputes(MIDs),and fatal disputes.”
Ray G
Jan 12 2007 at 5:46pm
An affluent people may have the luxury of considering and then doing something about larger moral issues such as slavery, discrimination, war, etc, but the details of what one normally considers “moral” seem to move the opposite direction.
America is a far more affluent society today than ever before, but far more teenagers have experienced sex – with multiple partners nonetheless, drug use is much higher, abortion is largely considered a last chance at birth control, divorce rates are unmatched by anything we’ve seen in history, etc.
So we look a lot better from a distance, but the closer you get, our warts become rather large.
Omer K
Jan 12 2007 at 6:09pm
Someone has never heard of Dysgenics…
Brad Hutchings
Jan 12 2007 at 6:26pm
Sounds like we need to solve the cognitive divide.
Ray G
Jan 12 2007 at 7:39pm
“Your theory would lead us to the conclusion that the wealthiest among us are the most ethical/moral, healthy and cleverest. Clearly, this has no basis in reality. Corruption proves this wrong – and there has been many rich people with bad physical health, bad cognitive skills and terrible moral.”
Umm, . . only in a fictional world of all absolutes. If one oak tree is diseased and weak, this does not mean that all oak trees are thus weak trees.
More to the point, a broad statistical look at objective IQ studies shows that groups with high IQs, also have lower rates of divorce, teenage pregnancy, drug use, alcoholism, etc. than do the groups with lower avg IQs.
I read an article in Scientific American a few years ago that looked at the empirical data that showed cigarette smoking was fantastically more common among the poorer classes, and thus, they had more related health problems.
The almost amusing part of that, was that the professor/author (from Yale I think) proposed raising the min wage to some astronomical figure in order to “save” the poor smokers.
As if more money would make the poor happier, and they would be less likely to smoke, if they were just happier.
Sheesh, . . . and academics wonder why so many people don’t take them more seriously.
TGGP
Jan 13 2007 at 4:48pm
Sure, we look down on people in the 16th century as barbaric. I doubt they’d think much of our morality either. We could disprove their beliefs about say, astronomy, with evidence but nobody has yet come up with any sort of objective evidence for “moral truths”.
Jason Malloy
Jan 13 2007 at 4:49pm
The Flynn effect suggests that IQ is subject to long-term environmental influences. A recent study suggests that it also responds to short-term influences
No. Every study showing implausible short term gains in IQ has ended up invalidated by “hollow” scores. Spitz book is a good start for these issues. The Flynn Effect, similarly, shows little correlation with intelligent behavior. The scores are an temporal artifact that need to be corrected, not taken at face value. Most people in the field would not agree with your interpretations.
Omer K
Jan 13 2007 at 5:55pm
Chris Brand rips big chunks out of the “Flynn Effect” in chapter 4 of his free downloadable book “The G Factor”.
Mostly, its NOT an increase in real intelligence, and the little bit left over, is debatable.
blink
Jan 13 2007 at 11:51pm
You argument is encouragingly optimistic. Regarding the decline in overt violence, I think the role of technology deserves mention as well. Our moral sensibilities may be improving, but even if they are not, we are increasingly able to channel our “lower” passions to avoid ill effects. I am inclined to see violent movies, pornography, and the like as a sign of progress; if they “trick” our minds sufficiently, we are willing to forego the actual activity, thereby avoiding its negative consequences. Perhaps 16th century denizens would substitute a modern simulation of a cat burning for the real thing if one were available.
Buzzcut
Jan 15 2007 at 1:40pm
>>The Flynn Effect, similarly, shows little correlation with intelligent behavior.
I’ve got one word for you: network television. Look at the average story line of “Lost” vs. “Dallas”. Of course the Flynn Effect is real and is an increase in intelligence.
Mensarefugee
Jan 16 2007 at 7:42am
Thats two words.
And thats fantastic… never mind the studies or evidence, never mind downloading that free book by a noted psychometrician… just your opinion, your lovely sweet better than thou liberal opinion.
Have you considered running for president? We need more people like you to lead us to the glorious utopian gulag of the future.
Comments are closed.