The latest car crash in trendy economics: "The Out of Africa Hypothesis, Human Genetic Diversity, and Comparative Economic Development" by Quamrul Ashraf and Oded Galor

Recently, Science and the American Economic Review teamed up to splash a paper by two economists correlating the wealth of nations with genetic diversity. Here's the abstract:

The Out of Africa Hypothesis, Human Genetic Diversity, and Comparative Economic Development 

Quamrul Ashraf and Oded Galor

Forthcoming in the American Economic Review 

Abstract 

This research advances and empirically establishes the hypothesis that, in the course of the prehistoric exodus of Homo sapiens out of Africa, variation in migratory distance to various settlements across the globe affected genetic diversity and has had a long-lasting hump-shaped effect on comparative economic development, reáecting the trade-offs between the beneficial and the detrimental effects of diversity on productivity. While intermediate levels of genetic diversity prevalent among Asian and European populations have been conducive for development, the high diversity of African populations and the low diversity of Native American populations have been detrimental for the development of these regions. 

Not surprisingly, Nature is promoting a backlash against the paper splashed in Science on the grounds of political incorrectness. 

From Nature (via Marginal Revolution)

Economics and genetics meet in uneasy union 

Use of population-genetic data to predict economic success sparks war of words. 

Ewen Callaway 

10 October 2012 

The United States has the right amount of genetic diversity to buoy its economy, claim economists. 

“The invalid assumption that correlation implies cause is probably among the two or three most serious and common errors of human reasoning.” Evolutionary biologist Stephen Jay Gould was referring to purported links between genetics and an individual’s intelligence when he made this familiar complaint in his 1981 book The Mismeasure of Man.  

Oh, boy, here we are in 2012 and “Nature” is still citing the authority of Stephen Jay Gould’s dopey and discredited 1981 bestseller as an unquestioned authority text …

Are we ever going to make any intellectual progress?

Fast-forward three decades, and leading geneticists and anthropologists are levelling a similar charge at economics researchers who claim that a country’s genetic diversity can predict the success of its economy.

To critics, the economists’ paper seems to suggest that a country’s poverty could be the result of its citizens’ genetic make-up, and the paper is attracting charges of genetic determinism, and even racism. But the economists say that they have been misunderstood, and are merely using genetics as a proxy for other factors that can drive an economy, such as history and culture. The debate holds cautionary lessons for a nascent field that blends genetics with economics, sometimes called genoeconomics. The work could have real-world pay-offs, such as helping policy-makers to set the right level of immigration to boost the economy, says Enrico Spolaore, an economist at Tufts University near Boston, Massachusetts, who has also used global genetic-diversity data in his research. 

Spolaore then writes in to Nature to say that he never ever said anything about the I-word.

Here's Spolaore's upcoming review of all non-crimethink theories of why some countries are richer than others. It's pretty good, but the only marginally non-PC thinker it cites is Gregory Clark. Lynn & Vanhanen and Rindermann are conspicuous by their absence, as is Michael Hart, whose theory that winter makes people smarter due to natural selection seems to be the most plausible explanation of Spolaore's own research showing a major role for "absolute latitude." Spolaore's main focus is "long-term genealogical relatedness," which is a very good thing to think about, but intellectual life has gotten so thuggish that anybody thinking useful thoughts has to tread carefully these days to not attract the thugs.

To return to Nature:

But the economists at the forefront of this field clearly need to be prepared for harsh scrutiny of their techniques and conclusions. At the centre of the storm is a 107-page paper by Oded Galor of Brown University in Providence, Rhode Island, and Quamrul Ashraf of Williams College in Williamstown, Massachusetts1. It has been peer-reviewed by economists and biologists, and will soon appear in American Economic Review, one of the most prestigious economics journals.

The paper argues that there are strong links between estimates of genetic diversity for 145 countries and per-capita incomes, even after accounting for myriad factors such as economic-based migration. High genetic diversity in a country’s population is linked with greater innovation, the paper says, because diverse populations have a greater range of cognitive abilities and styles. By contrast, low genetic diversity tends to produce societies with greater interpersonal trust, because there are fewer differences between populations. Countries with intermediate levels of diversity, such as the United States, balance these factors and have the most productive economies as a result, the economists conclude. 

The manuscript had been circulating on the Internet for more than two years, garnering little attention outside economics — until last month, when Science published a summary of the paper in its section on new research in other journals. This sparked a sharp response from a long list of prominent scientists, including geneticist David Reich of Harvard Medical School in Boston, Massachusetts, and Harvard University palaeoanthropologist Daniel Lieberman in Cambridge. 

Mostly anthropologists at Harvard. Unfortunately, the PC critique is intellectually lame and misses the actual flaws in Galor and Ashraf's paper.

In an open letter, the group said that it is worried about the political implications of the economists’ work: “the suggestion that an ideal level of genetic variation could foster economic growth and could even be engineered has the potential to be misused with frightening consequences to justify indefensible practices such as ethnic cleansing or genocide,” it said. 

The critics add that the economists made blunders such as treating the genetic diversity of different countries as independent data, when they are intrinsically linked by human migration and shared history. “It’s a misuse of data,” says Reich, which undermines the paper’s main conclusions. The populations of East Asian countries share a common genetic history, and cultural practices — but the former is not necessarily responsible for the latter. “Such haphazard methods and erroneous assumptions of statistical independence could equally find a genetic cause for the use of chopsticks,” the critics wrote. 

They have missed the point, responds Galor, a prominent economist whose work examines the ancient origins of contemporary economic factors. “The entire criticism is based on a gross misinterpretation of our work and, in some respects, a superficial understanding of the empirical techniques employed,” he says. Galor and Ashraf told Nature that, far from claiming that genetic diversity directly influences economic development, they are using it as a proxy for immeasurable cultural, historical and biological factors that influence economies. “Our study is not about a nature or nurture debate,” says Ashraf. 

Even less surprisingly, the most interesting question is whether the paper or its critics are more wrong, because the economists' paper simply assumes as truth one of my Seven Dumb Ideas about Race: that the old saw about how Africans are the most genetically diverse is really meaningful, when population geneticists try hard to find the least important genes to track.

I’ve only read the abstract of the paper, but it’s not encouraging: “the most homogeneous country, Bolivia, placed at 0.63 and the most diverse country, Ethiopia, at 0.77.” How does Bolivia pass any kind of reality check as the “most homogeneous country”?

Heck, Bolivia and Ethiopia are oddly rather similar in some ways: both have isolated highlands and both feature some population groups that are part-Caucasian, part indigenous to the continent.

My guess is that the way they came up with Bolivia as the least genetically diverse and Ethiopia as the most is that they got fooled into naively focusing on the so-called junk genes that population geneticists study to determine racial groups’ genealogies. 

And they may have also followed the population geneticists’ rule of thumb of ignoring everything from 1492 onward — e.g., you sample DNA extensively from isolated indigenous tribes in Bolivia’s Amazon and mountains, you don’t sample much from the big cities where most people have both Caucasian and Amerindian background.

Population geneticists try hard to avoid looking at economically useful mutations, such as lactose tolerance, because those get selected for and thus can be misleading about the past. Instead they prefer to study mutations on parts of the genome that don’t have much effect on anything important, because those genes tend to get passed down according to the laws of statistics governing random phenomena.

Those are much easier to project than economically powerful genes, such as lactose tolerance, which can set off wildly contingent consequences (e.g., the spread of the Indo-European languages may, or then again may not, have been caused by some Eurasian group getting that mutation and setting off on a career of conquest -- see Cochran and Harpending for details).

Looking at junk genes, sub-Saharan Africa has the most genetic diversity since most sub-Saharans’ ancestors didn’t get squeezed through the Out-of-Africa event. Pre-1492 South America had the least junk gene diversity because its ancestors were squeezed through both the Out of Africa and Out of Siberia events.

Here's how the two economists reason: Africa is the poorest continent so you assume that’s because of its high rate of junk gene diversity, and South America is kind of poor, so that must be because of its low rate of junk gene diversity. Europe is rich and it’s in the middle in terms of junk gene diversity, so all you have to do is fit an upside down U-shaped curve to your datapoints and voila, you have a cause celebre paper.

Or, I may have this all wrong, but this is the terrible feeling I got from reading their abstract.

UPDATE: 

Here’s economists Ashraf and Galor’s defense of their study.

Their critics are pretty silly, but Ashraf and Galor screwed up almost exactly the way I figured they did, only maybe even more so: instead of using diversity of junk genes in isolated pre-Columbian tribes like I assumed, they went one step farther and used a measure of migratory distance from the ancient Out of Africa event to come up with a stylized version of how much Out of Africa junk gene diversity there _would_ be if there hadn’t been any post-1492 admixture with Europeans or Africans!

“To this end, our work employs migratory distance from East Africa (i.e., distance along land-connected routes) as an “exogenous” source of variation in intrapopulation diversity across regions. Put differently, rather than directly employing the observed diversity measure, which may be tainted by genetic admixtures resulting from movements of populations across space in response to spatial differences in economic prosperity, we employ the variation in the diversity measure that is predicted by distance along prehistoric migration routes from East Africa.”

Oh, dear …

So, that’s how Bolivia comes out genetically most homogeneous in their study. To you and me, Bolivians may look pretty genetically diverse, with major contributions from Europe and the indigenes, with maybe some African in there in the lowland.

But, to Ashraf and Galor, Bolivia _has_ to be the most homogeneous because it’s just about the hardest place to walk to from the Olduvai Gorge. You have to get out of Africa, then you have to get out Siberia, then you have to get past the Panamanian isthmus, then you have to climb high into the Andes. I’m tired just typing all that.

The funny thing is that genetic differences in non-junk phenotypic genes obviously play an economic role in Bolivia. Real estate prices in La Paz are strongly negatively correlated with altitude. The richest, whitest people tend to live at the bottom of the canyon in La Paz where the air is thickest because white women tend to have pregnancy problems at over 10,000 feet, while the upland suburbs are cheap and almost all Indian. Cynthia Beall of Case Western has discovered the mutation that allows the indigenous people of the Altiplano to get by there better than outsiders.

If economists want to study the impact of genetic differences on economic life, just look at life as it really is in Bolivia.