March 23, 2002

"Globalization Proves Disappointing" - IQ and the Wealth of Nations

"Globalization Proves Disappointing" reports the NYT. "Globalization, or the fast-paced growth of trade and cross-border investment, has done far less to raise the incomes of the world's poorest people than the leaders had hoped, many officials here say. The vast majority of people living in Africa, Latin America, Central Asia and the Middle East are no better off today than they were in 1989..." On the other hand, hundreds of billions in private investment have poured into China.

So, what's the story behind the story? Capital flows to where wages are low but IQ's are high - pre-eminently China, where the average IQ is two points higher than the U.S. already, according to Richard Lynn's IQ and the Wealth of Nations. China's IQ advantage is likely to grow greater in the future as the Chinese get better fed and educated. In contrast, these other regions (with the exception of the self-destructive Argentineans) average IQ's of 90 or less, sometimes considerably less.

This is not to disparage free markets - there's really no alternative. The point is simply that, at any point in time, humans will differ greatly in productive capacity, so not everyone benefits from economic competition to the same extent.

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