Garett Jones - Immigration, National IQ, & Less Democracy

Go ahead and run your experiments in Iceland. Let's run that for 50 years and see what happens.
It's weird how everybody's obsessed with it, running the experiment in America, right? They'll balance the long-run budget on the kind of the backs of the poor and the middle class. Anything that lowers the innovation in the world's most innovative countries has negative costs for the entire planet in the long run.
But that's something you'd only see over the course of 20, 30, 50 years. And libertarians and open border advocates are very rarely interested in that kind of timeframe.
But it's worth thinking through why it is that the successful so-called monarchies aren't really monarchies, right? They're really oligarchies. We should presume that the average skill level of voters, the average traits that we're bringing from our ancestors are having an effect on our current productivity for Goodwill.
Okay. Today, I have the pleasure of speaking with Garrett Jones, who is an economist at George Mason University.
He's most recently the author of The Cultural Transplant, How Migrants Make the Economies They Move to a Lot Like the Ones They Left. But he's also the author of 10% Less Democracy and Hive Mind.
We'll get into all three of those books. Garrett, welcome to the podcast.
Glad to be here. Thanks for having me.
First question, isn't the cultural transplant still a continuation of your argument against democracy? Because isn't one of the reasons we care about the values of migrants, the fact that we live in a democracy? So should we view this book as part of your critique against democracy rather than against migration specifically? Well, I do think that governments

and productivity are shaped by the citizens in a nation in almost any event. I think that even

as we've seen recently in China, even in a very strong authoritarian dictatorship, which some would call totalitarian, even there, the government has to listen to the masses. So the government can only get so far away from the masses on average, even in an autocracy.
If you had to split apart the contribution, though, the impact of migrants on, let's say, the culture versus the impact that migrants have on a country by voting in their political system. How would you split that apart? Is mainly the cultural impact we see for migration due to the ability of migrants to vote or because they're just influencing the culture just by being there? I'll cheat a little bit because we don't get to run experiments on this.
So I just have to kind of guess, make an informed guess. I'm going to call it 50-50.
So the way people, the way citizens influence a country through formal democracy is important, but citizens end up placing some kind of limits on the government anyway. and the people in the country are the, they're the folks who are going to work in the firms

and be able to either establish or not establish

those complicated networks of exchange that are crucial to high productivity. I want to linger on hive mind a little bit before we talk about the cultural transplant.
If you had to guess, do the benefits of national IQ come from having a right tail of elites that is smarter? or is it from not having that strong of a left tail of people who are, you know, lower productivity, more likely to commit crimes and things like that? In other words, yeah, go ahead. Yeah, I think the upper tail is going to matter more than the lower tail in the normal range of variation.
And I think part of that is because nations, at least moderately prosperous nations, have found tools for basically reducing the influence of the least informed voters and for basically being able to keep productivity up, even when there are folks who are sort of disrupting the whole process. You know, the risks of crime from the lower end is basically like a probabilistic risk.

It's not like some zero to one switch or anything.

So we're talking about something probabilistic.

And I think that the median versus the elite is the contrast that I find more interesting.

Median voter theorem, you know, normal, the way we often think about democracy says that the median should be matter more for determining productivity and for shaping institutions. And I tend to think that that's more important in democracies for sure.
So when we look at countries, if you just look at a scatterplot, just look at the raw data of a scatterplot. If you look at the few countries that are exceptions to the rule where the mean IQ is the best predictor of productivity compared to elite IQ, the exceptions are non-democracies and South Africa.
So you see a few places in the Gulf where there are large migrant communities who are exceptionally well-educated, exceptionally cognitively talented. And that's associated with high productivity.
Those are a couple of Gulf states. It's probably Qatar, the UAE, might be Bahrain in there.
I'm not sure. And then you've got South Africa.
Those are the countries where the average test score, it doesn't have to be IQ, it could be just PISA, TIMSS type stuff.

Those are the exceptions to the rule that the average IQ, the mean IQ is the best predictor of national productivity.

Interesting.

Does that imply the fact that the, at least in certain contexts, the elite IQ matters more than the left tail? Does that imply that we should want a greater deviation of IQ in a country? They just push a button and increase that deviation. Would that be good? No, no, I don't think so.
If you could just increase the deviation, holding the mean constant. Yeah.
Yeah, I think so in the normal range of variation. Yeah, yeah, yeah.
And I think I think that it had more effects at, you know, it's people at the top who were, um, tend to be coming up with the, the big breakthrough, the big scientific breakthroughs, the big intellectual breakthroughs that ended up spilling over to the whole world, basically the positive externalities of innovation. This is a very almost Pollyanna ish, uh, Paul Romer, new endogenous new, uh, new growth theory thing, right? Which is the innovations of the elite just swamp the negatives of the low-skilled among us.
Can we just apply this line of reasoning to low-skilled immigration as well then? That maybe the average goes down, the average IQ of your country goes down if you just let in, you know,skilled immigrants, and maybe there's some cultural effects to that too. But you're also going to, the elite IQ will still be preserved, and more elites will come in through the borders along with the low-skilled migrants.
So then, since we're caring about the deviation anyways, more immigration might increase the deviation, and then we just, that's a good thing. So notice what you did there is you did something that didn't just increase the variant.
You simultaneously increased the variant and lowered the mean and median, right? And so I think that hurting the mean and median is actually a big cost, especially democracies. And so that is very likely to swamp the benefits of the small probability of getting higher elite folks in as part of a low-skilled immigration policy.
So pulling down the mean or the median, that swamps the benefits of increasing there yeah yes but if you get rid of their migrants ability to vote and i guess you can't do that but let's assume you could do that yeah what exactly it like what is the exact mechanism by which the the the cultural values or the lower median is impacting the elite's ability to produce these valuable externalities you know like there's a standard comparative advantage story that, you know, they'll do the housework and the cooking for the elites and they can be more productive. Yeah.
Taking all the institutions have given, which is what a lot of open borders optimists do. They take institutions as given.
They take cultural norms as given. All that micro stuff works out just fine.
I'm totally on board with all that sort of Adam Smith division of labor, blah, blah, blah. Um, but institutions are downstream of culture and, uh, cultural norms will be changing partly because of what I call spaghetti theory, right? We meet in the middle.
when new folks come to a country, there's some kind of convergence, some part where people meet in the middle between the values that were previously existing

and the values that have shown up that migrants have brought with them. So, you know, like I call it spaghetti theory because when Italians moved to America, that got Americans eating more spaghetti, right? And if you just did a simple assimilation analysis, you'd say, wow, everybody in America eats the same now, like the burgers and spaghetti.
So look, the Italians assimilated. But migrants assimilate us.
Native Americans certainly changed in response to the movement of Europeans. English Americans certainly changed in response to the migration of German and Irish Americans.
So this meeting in the middle is something that happens all the time, and not just through democratic channels, just through the sort of soft contact of cultural norms that sociologists and social psychologists would understand. Now, I'm sure you saw the book that was released, I think, in 2020, titled Wretched Refuse, where they showed a slight positive relationship between immigration and, you know,.
And I guess the idea behind that is there's selection effects in terms of who would come to a country like America in the first place. But they never ran the statistical analysis that would be most useful, I think.
They said that, so this is Powell and Naroste. They ran a statistical analysis that said, and they said, in all of the statistical analyses we've ever run, we've never found negative relationship between low skilled migration, any measure of it and changes in economic freedom.
And I actually borrowed another one of Powell's data sets. And I thought, well, how would I check this theory out? The idea that changes in migration have an effect on economic freedom.
And I just used the normal economist tool. I thought about how do economists check to see if changes in money, changes in the money supply change the price level.
That's what we call the quantity theory, right? The way you do that is on the X axis, you show the change in the money supply. And on the Y axis, you show the change in prices, right? This is Milton Friedman's idea.
Money is always everywhere. Yeah.ation is always everywhere.
We're a monetary phenomenon. So that's what I did.
I did this with a student. We co-authored a paper doing this.
And the very first statistical analysis we ran, we looked at migrants who came from countries that were substantially more corrupt than the country's average. And we looked at the different, the relationship between an increase in migrants from corrupt countries and subsequent changes in economic freedom.
Every single statistical analysis we found had a negative relationship. We ran the simplest estimate you could run, right? Change on change.
Change in one thing predicts change in another. They somehow never got around to running that very simple statistical analysis.
One change predicts another change. We found negative relationships every time.
Sometimes distinctly significant, sometimes not. Always negative.
Somehow they never found that. I just don't know how.
But what about the anecdotal evidence that in the U.S., for example, in the periods of the greatest expansion of the welfare state or of government power during the New Deal or Great Society, the levels of foreign born people were at like historical lows. Is that just a coincidence or what do you think? I'm not really interested in migration per se, right? My story is never that like migration per se does this bad thing.
Migrants are bad. That's never my story, right? As you know, right? But my story is that migrants bring cultural values from their old country to their new country.
And sometimes those cultural norms are better than what you've got. And sometimes they're worse than what you got.
And sometimes it's just up for debate. So if you had to guess guess what percentage of the world has cultural values that are equivalent to or better than the average of americas oh equivalent to or better than yeah i mean just off top of my head maybe 20 i don't know 30 i'll just throw something out there like that yeah so i mean like for country averages right yeah.
Yeah. Currently, we probably don't have it would probably be hard for like 20 percent of the rest of the world to get into the U.S.
Would you support some possible policy that would make it easy for people from those countries specifically to get to the U.S. just have radical immigration liberalization from those places? That's really not my comparative advantage to have opinions about that.
But like substantial increases of people who pass multiple tests, like let's take the low hanging fruit and then move down from there. Right.
So people from countries that on average have, say, higher savings rates, higher education levels, higher, as when I call SAT deep root scores, and countries that are, say, half a standard deviation above the U.S. level in all three.
Why do they have to be higher? Why not just equivalent? Like, you get all the gains from trade, and plus it can't be equivalent, so there's there's no part of the reason is because the entire world depends on U.S. innovation.
So we should make America as good as possible, not just slightly better than it is. So very few firms would find that their optimal hiring policy would be hire anyone who's better than your current stock of employees.
Would you agree with that? Yeah, but you have to pay them a salary if you're just if it's's just somebody just comes to the US, you don't have to like pay them a salary, right? So if somebody is better, if somebody's producing more value for a firm than the salary would pay them, I think like- Is a firm's job to maximize its profits or to just make a little bit more than it's making right now? Maximize profits, but- Yeah, there you go. So you find the best people you can.
Sports teams that are hiring don't just say, we want to hire people who are better than what we got. They say, let's get the best people we can get.
Why not get the best? That was Jimmy Carter's biography. Why not the best? But you can do that along with getting people who are, you know, in unexpected terms, as good as the existing Americans.
I don't care why you want this. This seems like crazy, right? What are you talking about? But I'm not sure.
Why not the best? What is the trade-off there? No, I'm not saying you don't get the best, but I'm saying once you've gotten the best, what is the harm in getting the people who have equivalent SAT scores and the rest of the things you mentioned? I think part of the reason would be, you'd want to find out, I mean, if you really want to do something super hardcore, you'd have to find out what's best for the planet as a whole. What's the trade-off between having the very best, most innovative, talented, frugal people in America doing innovating that has benefits for the whole world versus having an America that's like 40% better, but where the median is a little bit, the median of skills a little bit lower, right? Because the median is shaping the productivity of the whole team, right? This is what it means when you believe in externalities, right? But if you have somebody who's equivalent, by definition, they're not moving the median down.
You're totally right about that. Yeah.
But like, why wouldn't I want the best thing possible, right? Okay. I'm still trying to figure out why you wouldn't want the best thing possible you're trying to go with the best thing possible like why not i'm not disagreeing with you i'm just i'm a little confused about why that that precludes you from also getting the second best thing possible at the same time you're because you're not limited to just the best right well because the second best is going to have a negative externality on the first best.
Everything's externalities. This is my worldview, right? Everything's externalities.
You bring in the second best, you're like, that person's going to make things on average a little worse for the first best person. But it seems like you were explaining earlier that the negative externalities are coming from people from countries with low SAT scores.
By the way, SAT, you can explain what that means just for the audience who's not familiar with how you're using that term. Oh, yeah.
So there are three prominent measures in what's known as the deep roots literature and that are widely used. Two are S&A, that's state history and agricultural history.
That's how many thousands of years your ancestors have had experience living under organized states or living under settled agriculture. And then the T score is the tech history score.
I use the measure from 1500. It's basically what fraction of the world's technology were your ancestors using in 1500 before Columbus and his expanse of conquest ended up upending the entire world, uh, the world map.
So S A and T are all predictors of modern prosperity, but especially when you adjust for migration. Gotcha.
We can come back to this later, but one of the interesting things I think from the book was you have this chapter on China and the Chinese people as a sort of unstoppable force for free market capitalism. And it's interesting, as you mentioned in the book, that China is a poorest majority Chinese country.
What do you think explains why China is a poorest majority Chinese country? Maybe are there like nonlinear dynamics here where if you go from 90, 40 to 90 percent Chinese, there's positive effects. But if you go from 90 to 95 percent Chinese, there's too much.
No, I think it's just, I think just communism is dumb and it has terrible, like sometimes decades long effects on institutional quality. I don't really quite understand.
So I'd say North Korea, if we had good data on North Korea, North Korea would be even a bigger sort of deep roots outlier than China is, right? It's like, don't, don't have a communist dictatorship in your country seems to be pretty a robust lesson for national prosperity. China's still stuck with a sort of crummy version of that mistake still.
North Korea, of course, is stuck with an even worse version. So I think that's, my hunch is that that's, you know, the overwhelming issue there.
It's something that it's sort of a... China's stuck in an...
Currently, China's stuck in an institutional cul-de-sac, and they just don't quite know how to get out of it. And it's bad for a lot of the people who live there on average.
If the other side had won the Chinese civil war, things would probably be a lot, lot better off in China today. Yeah.
But what does that suggest about the literature? If the three biggest countries in the world, China, India, and America, it underpredicts their performance, or I'm sorry, in the case of China and India, it overpredicts their performance. And in the case of America, it underpredicts.
Does that suggest that maybe how reliable is this if like the three biggest countries in the world are not adequately accounted for?

Well, you know, communism is a really big mistake. I think that's totally accounted for right there.
I think India's underperformance isn't that huge. The U.S.
is a miracle along many ways. We should draw our lessons from the typical country.
And I think population weighted estimate. I don't think that basically one third of the knowledge about the wealth of nations comes from the current GDP per capita of China, India and the U.S.
Right. I think much less than one third of the story of the wealth of nations come from those three.
And again, in all three cases, though, if you look at the economic trajectories of all three of those people, all three of those countries, they're all China and India growing faster than you'd expect.

And also, I want to point out, this is the most important point, actually. When we look at when Kaplan made this claim, right, Brian Kaplan has made this claim, right, that the SAT, that the ancestry scores, the deep root scores don't predict the prosperity of the low performance of India and China.
He only checked the S and the A in the SAT scores. Okay.
Which letter did he not predict? Which letter did he never test out? He never tested the T. What do you think happens when he tests the T? Does it predict China and India and America? They start, T goes back to being statistically significant again.

Uh-huh.

So with T, which we've always known at the best of the deep root scores, somehow Kaplan

never managed to measure that one.

Just as Powell and Narastis never managed to run the simplest test, change in migrant

corruption versus change in economic institutions.

Somehow like the simplest test just never got run.

Okay.

And then what is the impact if you include T?

I think if you look at tea, then contrary to what Kaplan says, that deep roots measure is statistically significant. Okay.
Yeah. The puzzle goes away.
Interesting. Yeah.
So somehow these guys just never seem to run, like, things the transparent things i don't know why the um the weird um the the the one you mentioned from what was it narasa the name of the guy who wrote the Richard at Refuse the yeah yeah and how the narasta yeah yeah you said you did the regression on institutional corruption and from the countries they come from is that that right? So, yeah, the measure they use, I just took I took Powell's data set from another study. And it was the percentage of it was basically the percentage of your nation's population, the percentage increase in your nation's population from relatively poor or corrupt countries.
They had multiple measures. So and what is on the y-axis there? Y-axis is change in economic freedom.
That's my preferred one. Gotcha.
There's also a change in corruption one, which is a noisier indicator. You get much clearer results with change in economic freedom.
Gotcha, gotcha. Now, does the ideas getting harder to find stuff and great stagnation, does that imply we should be less worried about impinging on the innovation engine in these countries that people might want to migrate to? Because worst comes to worst.
It's not like there are a whole bunch of great new theories that are going to come out anyways. No, I think that it's always good to have great things and new ideas.
Yes, new ideas are getting harder to find. But that but the awesome ideas that we're still getting are still worth so much.
Right. If we're still increasing lifespan a month, a year for every year of research we're doing, like that just seems great.
Right. A decade that adds a year to life.
So just to use a rough ballpark measure there. But so we have a lot of these countries where a lot of innovation is happening.
So let's say we kept one or two of them as, you know, immigrate havens from any potential downsides from radical changes. You know, we already have this in the case of Japan or South Korea.
There's not that much migration there. What is what is the harm in then using the other ones to decrease global poverty by immigration or something like that? Well, it's obviously better to create a couple of innovation powerhouses rather than none.
Right. So obviously that's that's right.
But instead, I would prefer to have open borders for Iceland. If the open borders advocates are right and open borders will have no noticeable effect on institutional quality, then it's

great. prefer to have open borders for Iceland.
If the open borders advocates are right and open borders will have no noticeable effect on institutional quality, then it's great to move, have our open borders experiment run in a country that's lightly populated, has a lot of open land and has good institutional quality. And Iceland fits the bill perfectly for that.
So we could preserve the institutional innovation skill, the institutional quality of what I call the I-7. That's China, Japan, South Korea, the US, Germany, UK, France, and choose any country out of the couple of dozen countries that have good institutional quality.
Just pick one of the others that aren't one of those seven. Pick one that's not an innovation powerhouse and turn that into your open borders country.
You could, if you wanted to get basically Singapore levels of population density in Iceland, that'd be about 300 million people, I think. I think that's about what the numbers end up looking like, something like that.
But the value of open borders comes from the fact that you're coming to a country with high agglomerations of talent and capital and other things, which is not true of Iceland, right? So it isn't the entire. No, no, no.
I thought the whole point of open borders is that there's institutional quality and there's some exogenous institutions that make that place more productive than other places. And so by move, that's my version of what I've been exposed to as open borders theories, that institutions exogenously exist.
There's some places have moderately laissez-faire institutions in their country and moving a lot more people there will not reduce the productivity of the people who are currently there and they'll become much more productive. And so like the institute, you know, the institutional quality is crucial.
So, I mean, if you're a real geography guy, you'd be excited about the fact that Iceland is so far, so close to the North Pole. Because latitude is a predictor of prosperity.
I want to go back to the thing about what should we have open borders for that 20% of the global world's population that comes from equivalent SAT and other sort of cultural traits as America. Because I feel like this is important enough to dwell on.
You know, it seems similar to saying that once you picked up a $100 bill on the floor, you wouldn't pick up a $20 bill on the floor because you only want the best bill. The $20 bill is right there.
Why not pick it up? So what if we have... Yeah.
What if the $20 bill turns your $100 bill into like an $80 bill and turns all of your $80 bills into $100 bills? But aren't you controlling for that by saying that they have equivalent scores along all those cultural tests that you're considering? No, because the median. So take the simple version of my story, which is the median of the population ends up shaping the productivity of everybody in the country.
Right. Or the mean, the mean skill level ends up shaping the productivity of the entire population, right? So that means we end up, I mean, I try not to math this up.
I don't want to math this up for the popular book, but it means we face a trade-off between being small, a small country with super awesome positive externalities for all the workers by just selecting the best people. And every time we lower the average skill level in the country, we're lowering the average productivity of everyone else.
We're creating... What if we didn't lower it? So you have to have skills that are...
Lower it compared to... Greater than the median American.
So this is a ceteris paribus story, right? Like if you could... Suppose the US is at 80 now on a zero to 100 scale, right? It's just that.
And you have a choice between being 100 and being 99. If you're at 99, the 99 is making all, compared to the world of average of 100, the world of an average 99 is reducing the productivity of all those hundreds.
If we chose 90, we're reducing the productivity of all those hundreds yes okay so let's say we admit all the smartest people in the world and that gets us from 80 to 85 that's a new that's a new median in america at that point and but this is because we've admitted a whole bunch of like 99s that have just increased our average yeah um at At that point, open borders for everybody who's above 85. Like, this ends up being a math problem that's a little hard to solve in a podcast, right? Because it's the question of, do I want a smaller country with super high average productivity or a bigger country with lower average productivity? And by average productivity, I don't just mean a compositional effect.
I mean, relatively fewer positive externalities. So I'll use the term relatively fewer positive externalities rather than negative externalities, right? So I don't exactly know where this trade-off is going to pan out, but there is a case for a sort of Manhattan.
When people talk about a Manhattan project,

right, they're talking about putting all like a small number of the smartest people in a room. And part of the reason you don't want like the 20th smartest person in the room is because that person is going to ruin the ruin stuff for all for the other smart people.
It's amazing how your worldview changes when you see everybody as an external. I'm kind of confused about this because just having at some point, you're going to run out of the smartest, the remainder of the smartest people in the world.
If you've admitted all the brilliant people, given how big the U.S. population is to begin with, you're not going to change the median that much by doing that.
Right. So it's almost equivalent to just having more births from the average American.
Like if the average American just had more kids, the population would still grow. And the relative effect of the brightest people might dilute a little bit.
But maybe that's a huge tragedy. We don't know.
Without a bunch of extra math and a bunch of weird assumptions, we don't know. So like there's a point at which I have to say, like, I don't know.
Right. OK.
Yeah. Yeah.
Yeah, is diluting the power of the smartest person in America, like keeping us from having wondrous miracles all around us all the time? I mean, probably not, but I don't know. But I guess the sort of the meta question you can ask about this entire debate is, listen, there's so much literature here and it's hard to tell what exactly will happen.
You know, it's possible that culture will become worse. It's possible it will become better.
It's possible it's still the same. Given the fact that there's this ambiguity, why not just do the thing that on the first order effect seems good? And, you know, just like moving somebody who's like in a poor country to a rich country, first order effect seems good.
I don't know how the third and fourth order effect shapes out. Let's just, you know, let's just do the simple, obvious thing.
I thought that one of the great ideas of economics is that we have to worry about secondary and tertiary consequences, right? But if we can't even figure out what they are exactly, why not just do the thing that at the first order seems good? Because if you have a compelling reason to think that the direction of strength of the second and third and fourth order things are negative and the variances are really wide, then you're just adding a lot more uncertainty to your outcomes. So, and adding uncertainty to your outcomes that has sizable negative tail, especially for the whole planet, isn't that great? Go ahead and run your experiments in Iceland.
Let's run that for 50 years and see what happens. It's weird how everybody's obsessed with running the experiment in America, right? Why not run it in Iceland first? Because America's got a lot of great institutions, right? But we can check and see what that is.
Iceland's a great place, too. And I use Iceland as a metaphor, right? Like, people are obsessed with running it in America.
Like, there's some kind of need. I don't know why.
So let's try in France. Let's try Northern Ireland.
Are places with low SAT scores, and again, SAT, we're not talking about the, in case you're skipping to this timestamp, we're not talking about the college test. The deep root SAT, state history, agricultural history, tech history.
Right, exactly. Are those places with low scores on that test, are they stuck there forever? Is there something that can be done if you are a country that has had a short or not significant history of technology or agriculture? Well, I start off the book with this, which I really think that one thing they could do is create a welcoming environment for large numbers of Chinese migrants to move there persistently.
I don't think that, of course, the only thing that could ever work, but I think it's something that's within the range of policy for at least some poor countries. I don't know which ones, but some poor countries could follow the approach that many countries in Southeast Asia followed, which is create an environment that's welcoming enough to Chinese migrants.
It's the one country in the world with large numbers of high SAT score, with a high SAT score culture, large population. It's enough of an economic failure for at least a little longer that folks might be able to be interested in moving to a poorer country with lower SAT scores.
In a better world, you could do this with North Korea too, but the population of North Korea isn't big enough to make a big dent in the world, right? China's population is big enough, yeah. Another thing you have to worry about in those cases though is the risk that if you do become successful in that country, there's just going to be a huge backlash and your resources will get expropriated.
Like what happened to India. Famously so in Indonesia, right? Yeah, there have been many times across Southeast Asia where anti-Chinese pogroms have been, unfortunately, a fact of life.
Yeah, yeah. Or Indians in Uganda under Idi Amin.
Idi Amin, yeah. Yeah, yeah.
Okay, so actually, I'm curious how you would think about this. given the impact of national IQ, if you're an effective altruist, are you just handing out iodine tablets across the world? What are you doing to increase national IQ? Yeah, this is something that I, yes, finding ways, this is what I call a Flynn cycle.

Like I wish, I'm hoping for a world where there are enough public health interventions

and probably K through six education interventions to boost test scores in the world's poorest countries. And I think that ends up having a virtuous cycle to it, right? As people get more productive, then they can afford more public health, which makes them more productive, which means they can afford more public health.
I think brain health is an important and neglected part of child development. Fortunately, we've done a fair amount to reduce the amount of environmental lead in a lot of poor countries.
That's probably having a good effect right now as we speak in a lot of the world poorest countries. You're right.
Iodine, basic childhood nutrition, reliable health care to, you know, prevent the worst kinds of just mild childhood infections that are probably creating what economists sometimes call health insults, things that end up just hurting you in a way that causes an ill-defined long-term cost. A lot of that's going to have to show up in the in.
I'm a big fan of the view that part of the Flynn effect is basically nutrition and health. Flynn wasn't a huge believer in that, but I think that's certainly important in the poorest countries.
Yeah. I think Brian showed in Open Routors, if you look at the IQ of adoptees from poor countries Sweden is the only country that collects data.
But if you look at the um iq of adoptees from poor countries um who go sweden is the only country that collects data but if you get adopted by a parent in um sweden uh the the half the gap between the averages yeah yeah yeah goes away so i mean it is one of the ways you can increase global iq just by moving kids to uh countries with good health outcomes that will nourish their intelligence? Oh, that's a classic short run versus long run effect, right? So libertarians and open borders advocates tend to be focused on the short run static effects. So and so you're right.
Moving kids from poor countries to richer countries is probably going to raise their test scores quite a lot. And then the question is, and over the longer run, are those lower skilled folks, the folks with lower test scores, going to degrade the institutional quality of the places they move to, right? So if you close half the gap between the poor country and the rich country, half the gap is still there, right? And if I'm right that IQ has big externalities, then moving people from a lower scoring country to a richer scoring country and closing half the IQ gap still means on net you're creating a negative externality in the country the kids are moving to.
Yeah, yeah. We can come back to that.
Yeah, yeah so it's basically you just look at the question.

Is this lowering the mean test scores in your country?

And if it's lowering the mean test scores in the long run, it's on average going to lower institutional quality, productivity, savings rates, those things.

It's hard to avoid that.

It's hard to avoid that outcome.

So I don't remember the exact figures, but didn't Brian address this in the book, in the Open Borders book as well, that you can, even if there's a,

the national IQ lowers on average,

if you're just, if you're still raising the global IQ,

that it still nets out positive

or am I remembering that wrong?

Well, notice what he does is he attributes,

he says there's some productivity

that's just in the land,

that's just geographic factors.

So basically being close for it.

And so that, basically moving people away

from the equator boost productivity substantially.

And again, that's just in the land, that's just geographic factors. So basically being close for it.
And so that, basically moving people away from the equator boosts productivity substantially. And again, that's a static result.
The reason I mentioned that ignores all the I7 stuff that I'm talking about, where anything that lowers the level of innovation in the world's most innovative countries has negative costs for the entire planet in the long run. But that's something you'd only see over the course of 20, 30, 50 years.
And libertarians and open border advocates are very rarely interested in that kind of timeframe. Is there any evidence about the impact of migration on innovation specifically? So not on the average institutional quality or on, you know, the corruption or whatever, but like just directly the amount of innovation that happens or maybe the Nobel Prize is won or things like that.
No, I mean, I would presume, I think a lot of us would presume that the European invasion of North America ended up having positive effects for global innovation. It's not an invasion that I'm in favor of, but if you want to talk crudely about whether migrations had an effect on innovation, you'd probably have to include that as any kind of analysis.
Yeah, yeah. Do you think that the people who are currently Americans, but their ancestry traces back to countries with low SAT scores? Is it possible that U.S.
GDP per capita would be higher without that contribution? Or how do you think about that? I mean, that it follows from thinking through the fact that we are all externalities,

positive or negative, right?

I don't know what in any particular,

any one particular country could turn out to be some exciting exception to the rule,

some interesting anomaly.

But on average, we should presume

that the average skill level of voters,

the average traits that we're bringing

from the nations of our ancestors

is having an effect on our current productivity

for good or ill.

Thank you. traits that we're bringing from the nations that are the nations of our ancestors are as having an effect on our current productivity for good or real.
It's just following through the reasoning, I'd say on average, most likely, but there can always be exceptions to the rule. I guess we see large disparities in income between different ethnic groups across the world, not just in the United States.
Doesn't that suggest that some of the gains

can be privatized from whatever the cultural

or other traits there are?

Because if these, over decades and centuries,

these sorts of gaps continue.

I don't see why that would follow, right?

If everything is being,

if all the externalities are just being averaged out over time, what did you expect that these gaps would narrow? Well, I mean, I'm being a little rhetorical when I'm saying everything's literally an externality, right? I don't literally believe that's true. For instance, people with higher education levels do actually earn more than people with lower education levels.
So that's literally not an externality, right? So some of these other cultural traits that people are bringing with them from their ancestors, nations of origin, could be one, or one, likely one source of these income differences. I mean, if you think about differences in frugality, differences in personal responsibility, which show up in the surveys that are persistent across generations, those are likely to have an effect on long-run productivity for you yourself and your family.
Not alone the hive mind stuff where we find that there's a positive relationship between test scores and productivity. There was a blogger who took a look at your 2004 paper about the impact of national IQ on GDP, and they calculated, so they were just speculating, let's say you cloned a million John M.
Neumanns and assume that John M. Neumann had an IQ of 180, then you could, let me just fill out the exact numbers.
You could raise the average IQ of the United States by 0.21 points. And if it's true that one IQ point contributes 6% to increasing GDP, then this proposal would increase U.S.
GDP by 1.26%. Do you buy these kinds of extrapolations? 1.26%? Yeah, because you're only cloning a million, John Munoim.
Oh, yeah. Okay.
So it's about 1 million John Munoim. Yeah, that sounds, I mean, that's the kind of thing where I wouldn't expect it to happen overnight, right? I tend to think of that, the IQ externalities as being two, three generations.
I lump it in with what economists call organizational capital. That sounds about right.
Yeah, yeah, yeah. I can't remember where I saw this.
I think I stumbled across it myself at some point, too. Yeah, yeah.
By the way, his name is Alvaro de Menard, if you want to find out. Oh, okay, yes, yes.
OK. Yeah, it's I mean, it's in that ballpark, right? It's just this idea that and more importantly, a million John von Neumanns would be a gift to the entire planet, right? Yep.
Yep. Yep.
So, yeah, if you had if you had a choice of which country to have the John von Neumanns, the million John von Neumanns, it's probably going to be one of the I-7. Maybe Switzerland would be a good alternative.

What is the optimal allocation of intelligence across the country?

Because one answer, and I guess this is the default answer in our society,

is you just send them where they can get paid the most because that's a good enough proxy for how much they're contributing.

And so you have these high agglomerations of talent and intelligence

in places like Silicon Valley or New York. And because their contributions there can scale to the rest of the world.
This is actually where they're producing the most value. Another is, you know, you actually should disperse them throughout the country so that they're helping out communities.
They're, you know, teachers in their local community. I think there was a result.
There's an interesting anecdotal evidence that during the Great Depression, the crime in New York went down a ton. And that was because the cops in New York were able to hire.
They had like 100 applications for every cop they hired. And so they were able to hire the best and the brightest.
And there was a whole bunch of new police tactics that were pioneered at the time. Anyways, so is the market allocation of intelligence correct? Or do you think there should be more distribution of intelligence across the country? How do you think about that? Yeah, I mean, the market signals are terrible.
But this is my inner Paul Romer kicks in and says, innovation is all about externalities and there's market failures everywhere when it comes to the field of innovation. And so, you know, I personally, I mean, I like the idea of finding ways to allocate them to STEM style technical fields.
And we do a fair amount of that. And maybe we do the, maybe the US does a pretty good job of that.
I don't have any huge complaints at the crudest 50,000 foot level. The fact that people know that there's a status game they can play within academia that are perhaps more satisfying or at least as satisfying as the corporate hierarchy stuff.
So yeah, you don't want them all just, I wouldn't encourage them to solely follow market signals, right? I'd encourage them to be more Hansonian and play a variety of status game because the academic and intellectual status game is worth a lot, both personally and then it leads to positive spillovers for society. But how about the geographic distribution? Do you think that it's fine that there's people leave, smart people leave Kentucky and to San Francisco or yeah I'm a big agglomeration guy yeah yeah yeah I'm a big agglomeration guy yeah I mean the internet makes it easier but then like still being close to people's being in the room is important um that there's there's something uh both Hansonian and Girardi in here about like, we need to find role models to imitate.
And that's probably important for productivity. Um, are there increasing or decreasing returns to national IQ? No, I think, um, you know, my findings were that it was all basically log linear.
And so log linear looks crudely like increasing returns right so yeah it looks exponential right so yeah there's increasing returns to national iq yeah are you but this is this is a commonplace finding in a sense because so many uh like human all the human capital relationship i'm familiar with end up having something like a log linear form, which is exponential. So why is that? Yeah, there's something multiplicative.
That's what I have. That's all I have to say is like it's something somehow this all taps into Adam Smith's pin factory.
And we have multiplicative, not additive effects when we're increasing brain power. I suspect it does have something to do with a better organization of the division of labor between people, which ends up having something close to exponential effects on productivity.
Are you a fan of genetic selection for intelligence as a means of increasing national IQ? Or do you think that's too much playing at the margins? If it's voluntary, I mean, people should be able to do what they want. And after a couple of decades of experimentation, I think people would end up finding a path to government subsidies or tax credits or something like that.
I think people voluntarily deciding what kind of kids they want to have is a good thing. And so by genetic selection, I assume you're meaning at the most elementary level, people testing their embryos the way they do now, right? So, I mean, we already do a lot of genetic selection for intelligence.
Anybody you know who's in their mid-30s or beyond who's had amniocentesis, they've been doing a form of genetic selection for intelligence. So it's a widespread practice already in our culture.
And welcoming that in a voluntary way is probably going to have good effects for our future. What do you make of the fact that GPT-3, or I think it was Chad GPT, had a measured IQ of 85? Yeah, I've seen a few different measures of this, right? You might have seen multiple measures.
Yeah, I think it's a sign that basically, and when you see people using non-IQ tests to sort of assess the outputs of GPT on long essays, it does seem to fit into that sort of not quite 100,, but not off by a lot. Yeah, I mean, I think it's a sign that a lot of mundane, even fairly complex, moderately complex human interactions can be simulated by a large language learning model.
And I think that's going to be rough news for a lot of people whose life was in the realm of words and dispensing simple advice and solving simple problems. That's pretty bad news for their careers.
I'm disappointed to hear that. Yeah.
At least for the transition. I don't know what's going to happen after the transition.
Yeah. I'm hoping that's not true of programmers or economists.
I mean, it be right i mean it's if that's the way it is i mean i i mean the car put a lot of uh people who took care of horses right out of the out of work yeah so yep um even okay so let's talk about democracy that i thought this was also one of your really interesting books no thanks even controlling for how much democratic oversight there is of institutions in the government there seems to be a wide discrepancy of how well they work like the fed seems to work reasonably well i i don't know enough about microeconomics to know how the object level decisions they make but you know it seems to be a non-corrupt like uh technocratic organization um but yeah yeah uh if you look at something like the FDA, it's also somewhat insulated from democratic processes. It seems to not work as well.
What determines controlling for democracy? What controls, what determines how well an institution in the government works? Well, I think in the case of the Fed, it really does matter that they, the run it have a guaranteed long term and they print their own money to spend. So that means that basically Congress has to really make an effort to change anything in the Fed.
So they really have the kind of independence that matters, right? You know, they have a room of their own. And the FDA has to come to Congress for money more or less every year.
And the FDA heads do not have any kind of security of appointment. They serve at the pleasure of the president.
So I do think that they don't have real independence. I do think that they're basically, they're living in this slack, this area of slack, to use the sort of McNolgast, poli-sci jargon.
They're living in this slack, this area of slack to use the sort of McNullegast, polysci jargon. They're living in this realm of slack between the fact that the president doesn't want to muddle with them, meddle with them, excuse me, and the fact that Congress doesn't really want to meddle with them.
But on the other hand, I really think that the FDA and the CDC are doing what Congress more or less wanted them to do. They reflect the muddled disarray that Congress was in over the period of, say, COVID.
I think that's a first order important. I mean, I do think the fact that FDA and CDC don't seem to have that culture of raw technocracy the way the Fed does, I think that has to be important on its own.
But I think behind that, some of that is just like FDA, CDC creatures of Congress much more than the Fed is. Should the power of the president be increased? No.
No, like the power of independent committees should be increased. More of Congress Congress should be like the Fed.
My plan for a Fed for an FDA or CDC reorganization would be about making them more like the Fed where they have appointed experts who have long terms and they have enough of a long term that they can basically feel like they can blow off Congress and build their own culture. so the European Union is an interesting example here because they also have these appointed technocrats, but they seem more interested in creating annoying pop-ups on your websites than with dealing with the end of economic growth on the continent.
Is this a story where more democracy would have helped or how do you think about the European Union in this context? No, in the EU, like the European voters just aren't that excited about democracy. Excuse me, aren't that excited about markets overall.
The EU is going to reflect that, right? What little evidence we have suggests that countries that are getting ready to join the EU, they improve their economic freedom scores. They're sort of laissez-faireness on the path to getting ready for joining the EU.
So, and then they may increase it a little bit afterwards once they join. But basically it's like, when you're deciding to join the EU, it's like you decided to have your rocky training montage and get more laissez-faire.
And so the EU on net is a message, it pulls in the direction of markets compared to where Europe would be otherwise. I mean, just look at the nations that are in the EU now, right? A lot of them are east of Germany, right? And so those are countries that don't have this great, you know, history of being market friendly.
And a lot of parties aren't that market friendly. And yet the EU sort of nags them into their version, like as much markets they can handle.
What do you think explains the fact that the Europe as a whole and the voters in there are less market friendly than Americans? I mean, if you look at the sort of deep roots analysis of Europe, you would think that they should be the most in favor of them. I don't know if the deep roots of actually maybe the planet.
Yeah, compared to the planet as a whole, they're pretty good. Right.
So I never get that excited about like the small little distinctions between the U.S. and Europe, like these 30 percent GDP differences, which are very exciting to pundits and bloggers and whatever.
I'm like, 30 percent doesn't matter very much. It's not really my bailiwick.
What I'm really interested in is a 3000 percent between the poorest countries and the richest countries. So like I can speculate about Europe.
I don't really have a great answer. I think there's something to the naive view that the Europeans with the most, what my dad would call gumption, are those who left and came to America.
Some openness, some adventurousness. And maybe that's part of what made, so basically there's a lot of selection working on the migration side to make America more open to laissez faire than Europe would be.
Does that overall make you more optimistic about migration to the U S from anywhere? Like, you know, the same story. Yeah.
Setter a pair of us like America, America gets people who are really great, right? I went with you there. Yeah.
Does elite technocratic control work best in only in high IQ countries? Because otherwise you don't have these high IQ elites who can make good policies for you, but you also don't get the democratic protections against famine and war and things like that. Oh, I mean, I don't know.
I think the case for handing things over to elites is pretty strong in anything that's moderately democratic, right? I don't have to be anything that's substantially more democratic than the official measure of Singapore, for instance. I mean, that's why my book 10% Less, really is targeted at the rich democracies.
Once we get too far below the rich democracies, I figure once you put elites in charge, they really are just going to be old-fashioned Gordon Tullock rent seekers and steer everything toward themselves and not give a darn about the masses at all. So that's, you know, elite control in a democracy, a lot of elite control in any kind of democracy, I think, is going to have good effects if you're really looking at something that is that meet the market ascends definition of a democracy.
Competitive market, competitive parties, free press. Does Singapore meet that criteria? No, because their party aren't really allowed to compete.
I mean, that's pretty obvious. Yeah, the People's Action Party really controlled party competition there.
But I guess Singapore is one of the great examples of technocratic control. They're just an exception to the rule.
Most countries that try to pull off that lower level of democracy wind up much worse. What is uh what is your opinion of neo-reactionaries i guess they're not in favor of 10 percent less democracy they're more in favor of 100 percent less democracy but yeah i think they're like kind of too much larping too much romanticizing about the rohirim i guess i don't know what is the rohirim yeah all the these guys in the lord of the rings you know Romanticizing monarchy is a mistake.
It's worth noting that, as my colleague Gordon Tolick pointed out, along with many others, in equilibrium, kings are almost always king and council, right? And so we're thinking through why King and Council is the equilibrium, something more like a corporate board and less like either the libertarian ideal of the entrepreneur who owns the firm or the monarch who has the long-term interest in being a stationary bandit. In real life, there's this sort of muddled thing in between that works out as the equilibrium, even in the successful so-called monarchies.
So it's worth thinking through why it is that the successful so-called monarchies aren't really monarchies, right? They're really oligarchies. Yeah.
Yeah. If you look at the median voter in terms of their preferences on academic policies, it seems like they're probably more in favor of government involvement than the actual policies of the United States, for example.

What explains this? Shouldn't the medium voter theorem imply that we should be much less libertarian as a country? Yeah, that's a great point from Brian Kaplan's excellent book, Myth of the Rational Voter, right? Yeah, I think part of it, I mean, I think his stories are right, which is that politicians facing reelection have this tradeoff between giving voters what the voters say they want and giving the voters the economic growth that will help politicians get reelected. Right.
So it's it's a version of saying, like, you know, I don't want you to pull off the Band-Aid, but I want my wounds all get better. So then so the politician has, it's the politician's job to handle the contradictory demands of the voters.
And by delegating authority to them, to the voter, to the elected politicians, you get some of the benefits of elitism, even in a so-called democracy. Over the long run, should we expect any of the tensions or all the tensions of ethnic diversity to fade away? Like nobody today worries about the different Parisian tribes in France butting heads at the workplace.
Right. So over time.
And you're right. Like that the anti-German ethnic sentiment in the U.S.
totally gone. Right.
So. Right.
But over time. So then this is another one of the short run effects that you emphasize should focus less on, right? Yeah, that's a good point.
It's possible. You don't know which, I mean, the problem is that ethnic conflict has been a hardy perennial.
It's not the only conflict that people can ever have. I don't know to what extent these things will fade away.
As I emphasize in the culture transplant, the ethnic diversity channel is actually the least important of any of the channels I discuss. And so I'm open to this thought that what you're saying will actually happen.
And maybe we'll just find something else to get mad at each other about, like social media tribes or religious groups. I mean, it hasn't happened yet in all the documented human history we have.
People seem to find some ethnic balance for conflict. It is worth pointing out that the one study that I report, I think it's a Wagziar Kawatha piece, but the source of ethnic conflict happens when private values are correlated with ethnic groups, right? So if cultural values are basically uncorrelated with ethnicity, then basically there's nothing to fight over.
And that's really what's happened with a lot of old ethnic battles in the U.S. And so you're right.
Some of these things will fade with time. The problem is that human beings are one of our great evil is that we are always looking for a focal point and we can people will use visible appearance as a horrifying focal point around which to peg their conflicts it's an easy one because our brains are looking for visual patterns and i don't like that but it's something that will probably keep happening one of the interesting points you made in the chapter was that the benefits of diversity are greatest when search costs are lower and the cost of vetting are lower.
How do we make sure that that is true of non-elite professions? So if you're looking for a plumber or if you're looking for a carpenter, how do you make sure that you can vet them easily? I mean, I have to say that this had to be a case where like Yelp and Google

and all these online ratings

have given us tools for checking these things out.

We know we have to be skeptical, of course,

but for people who know that they're good at something,

the cost of entry into a new field

has to be much lower than it was a few decades ago

because, you know, 10, 20 good Google reviews

and you can actually enter. So lower basically not not banning not banning disclosure of data i'd say that's the most important thing we can do i think um you sometimes hear that medical doctors i haven't checked up on this a long time but apparently medical doctors often uh make it very risky to give bad reviews sometimes you get lost you get a lawsuit or something.
So making that a lot harder is worth it. We know that some negative reviews are going to be malicious and inaccurate, but the benefits of information flow seem really high.
Yeah. I thought one of the really interesting chapters in the 10% less democracy was the chapter on bondholder democracy.

Yeah.

And I'm curious.

I mean, corporations are obviously an example to use here where they do have bondholders who hold them accountable.

But the average lifespan of a corporation is 10 years, I believe.

So do you think it would be even shorter if bondholders had a lesser say on corporations?

Or what does the transience of the corporation tell us about their controls? Oh, that's a good point. Well, we can suspect that the average person who's investing in a corporation makes money, right? Because otherwise people wouldn't be doing it, right? On average people, it must work.
So this is what, right? You actually have me stumped here. So can you rephrase the question again? I'm trying to think through what the question is there.
If bondholders do extend the longevity and the long-term thinking of the organizations on who they hold bonds, why aren't corporations who give out bonds? Why don't they tend to live longer than I think the average of 10 years? Would it be even shorter without bondholders? Oh, I'd say, A, I'd say it probably be shorter without bondholders or any kind of financial monitor. But second, most corporations just shouldn't live that long, right? Most corporations, their ideas that you try out, and then you find out it doesn't work, or it should be bought up by somebody else or the IP should be sold off.

And so having a lot of companies fade out is actually on net a good sign.

I think this is really part of the John Halterwanger line of research that the sort of modern version

of creative destruction research, which finds that, you know, low productivity firms exiting,

you know, just as naive laissez-faire predicts means that those workers and that capital can get reallocated over to a more productive firm. So the alternative is, you know, stereotypically Japanese zombie firms, right? They're kept limping along by banks that are perhaps under political pressure to lend.
And so a lot of human and physical capital gets tied up in low productivity projects. So yeah, a brutal bond market is a good way to send a market signal to move capital from low productivity to high productivity projects.
Why are yields on 30-year fixed treasuries, why are they so low? Because theoretically, investors should know that we have a lot of liabilities in the form of, you know, social security to baby boomers, and we've radically inflated the money supply very recently and may do so again. Do you think the investors being irrational with the low yields or what's going on? No, no, I'm a fan of the view that the bondholders are going to win the long run.
And that inflation, any kind of super, like super, super high inflation is not going to be the path of the future. And what's going to happen is that at least think about the U.S., the way the bondholders are going to win is that there's going to be a mixture of tax hikes and slower spending growth, especially hurting the poor.
And that's how the U.S. is going to close its fiscal gap.
I don't know particularly what paths other countries are going to go through, but the U.S. has this basically, this one tool, this one superpower sitting in the room that it hasn't used yet, and it's a VAT, right? So the U.S.
could dramatically increase its tax revenue through either an overt or disguised value-added tax. And that would raise a ton of money, just like it raises in Europe.
And that's the easy way to close the U.S. fiscal gap.
We probably won't even have to get to that. Just making Medicaid worse slowly over the long run, maybe making Medicare worse over the long run, that by itself would close a lot of this fiscal gap so basically i think they'll balance the long-run budget on the kind of the backs of the poor and the middle class that's probably the most likely outcome so are you expecting hence no hyperinflation so but so you're expecting the welfare state to shrink either in quality or quantity over time? In relative terms, compared to the trend.

I mean, if America is still getting, say, 1%,

1.5% richer each year,

then that by itself means that, you know,

that adds a certain level of quality

to healthcare over time.

And so basically, if it ends up staying

the equivalent of, say, 0%, that by itself, if you get healthcare spending in real terms to be 0% over time. That, that would end up closing the gap when you compound it out long enough.
Right. So yeah.
Yeah. That kind of thinking.
So, you know, when Liz trust and UK tried to implement a tax reform, the bondholder revolt and, you know know, she was ousted. Yeah.
Bond was one right there. Yeah.
So do you, do you, do we already live in the bondholder utopia or? Oh yeah. I mean, I think that that was a nice reminder that basically contrary to sort of the MMT view and the sort of pop MN to pop Keynesian view, the debt is no barrier at all.
I think that showed the bondholders are actually paying attention to long term signals of fiscal policy credibility and they'll take action. Yeah.
Yes. What are the deep roots of Mormonism? Why do they have such high trust and such tight knit communities? I mean, I, I think part of it is that they reflect a lot of this sort of what for them was Western pioneer culture, upstate New York, Pennsylvania, then Ohio.
I think those communities tended to be high trust communities necessarily because of the difficult environment that they were living in. And there was a lot of selection.
There was a lot of selection over the first few decades of Mormon history, where those who were willing to sort of trust the group stayed in and those who weren't willing to trust the group ended up leaving. And not just trust, but trustworthiness.
I think a lot of people probably got weeded out because they weren't contributing to the common good. So I think that basically by the time the Mormons got established in Utah, they had already selected for a strong culture of a kind of in-group pro-sociality.
And I think that helped them weather the storms of the 19th century. For the whole 19th century, people were only joining during this, this is during the era of polygamy in Utah, right? If they thought that they were willing to put up with this, right? And you know you're signing up for some kind of deep sociality with a mixture of a lot of unconventional stuff and that foundation really helped And the fact that Mormons since then have stayed as a religion that requires a medium high level of commitment also weeds out people who just aren't willing to make that kind of commitment.
So, I mean, I was raised Mormon. You know, I wasn't ultimately willing to make the commitment.
And maybe part of the reason is because I'm too much of a free rider. So Morm who are left are probably better than me.
The Mormon church has, I think, more than $100 billion in assets. What is it planning on doing with all this money? That's a tremendous sum.
I don't know. I mean, maybe they're planning to hand it to the Savior when the second coming happens, right? There's got to be a great argument for this option value of just having the wealth there, right? It must give them a kind of independence from the world when various storms come along, cultural, political storms.
I don't actually know what their plans are for what they would do with all the money, but I do know that normal economics tells us that just being frugal is good for the economy overall. So Steven Landsberg has a great essay in Praise of Scrooge.
It's especially appropriate for this time of year. And being frugal means you're building up the capital stock and you're giving a sort of invisible gift to future generations.
So Mormon frugality is basically helping build up the U.S. capital stock and indirectly the

world's capital stock, helping make us all more productive, which I think is something that

fits in with Mormon values. Yeah, yeah.
I think people have pointed out that people should be

spending more money given the fact that they have so much left over by the time they die, usually.

Yeah, at an individual level, if you care about your own well-being, that's true.

Yeah, yeah. But okay, so it's about your own well-being, that's true.
Yeah, but okay, so it's interesting. Leaving a large inheritance is socially valuable.
Yeah, leaving a large inheritance means you're producing a lot, but you're not consuming very much. So that means you're building up the capital stock.
Yep, yep. And there's also, I think, a large amount of multi-level marketing schemes that proliferate in Utah.

Yeah.

Is that one of the downsides of high social trust?

Yeah.

Because people predate upon it, right?

It strikes me as a total rent seeker sort of thing.

I mean, I have to say the knives are really good.

So everybody I know who's ever had Cutco knives ends up using and protecting.

So that's one of the popular multi-level marketing schemes that actually gets to men. A lot of them are targeted at women through cosmetics, as you might know.
So at least the men's one works out. If you had to implement an immigration system from scratch, would you actually consider these SAT scores and these other deep roots scores as part of somebody's admittance? Or would you just consider the individual level, your personal skills in education and things like that? Now, I'd want to launch a 10-year, maybe 20-year research project of figuring how to turn the deep roots scores into something useful.
So I think right now with the deep roots literature, we're about where Milton Friedman's monetarism was in the late 60s. You know, Friedman said, hey, I figured out where inflation comes from and we'd be a lot better off if we just grew the money supply 3% a year.
And ultimately, nobody thought he was right about the 3% a year thing, but they did think that he still had a lot of good advice. So Friedman ended up having a lot of good ideas, but they weren't policy ready.
And I think that's about where we are with the deep roots literature right now, which is, I mean, at most one would use it as like a small plus factor in a point system, but I don't even know which points I'd use. But something along those lines is worth thinking about.
I would never use a cutoff. I would never use any quotas or hard cutoffs.
If you think about point space systems, systems 10 20 years of further research and maybe you'd find a way to put the deep roots into a point space system yeah yeah um how was the spf thing what do you mean so did he just say like i'll fly you out so i was there for the um ea bahamas oh okay okay yeah and then while i was there i i um i i talked to somebody who knew him and i'm like hey i would love to interview him yeah i would ask him yeah yeah yeah it was one of the ones where actually i feel like i would really want to redo that one because i was aware of some things back then that were kind of that would be worth asking about in retrospect and of course it's all in retrospect but yeah i should have foked harder at that rather than asking these sort of philosophical questions about effective altruism yeah do you think i i mean is it as simple as like he was commingling fun uh he he lent a bunch of ftx money over to a hedge fund and then they lost it um i yeah i'm guessing proof of approximation yeah yeah yeah so it's like it's old-fashioned financial fraud partly driven by uh not having a really good board over a good oversight you know what i'm really curious to ask you this because you know what you're talking hive mind about the fact that higher iq people on average um are more cooperative in prisoners dilemma type situations yeah yeah, yeah, yeah. And I just interviewed Bethany McLean on the podcast.
It hasn't been released yet. But, you know, she wrote the smartest guys in the room, which about Enron, right? And there is this thing where maybe they are less likely to commit fraud on average, but when they do, they're so much- They're really good at it, right? Exactly, right? So, yeah, I don't know.
Maybe one of the downsides of having a high IQ society is that white people do commit fraud.

They're super successful at it.

You know, I don't know.

Yeah, I mean, the evils of super smart people are obviously a huge risk to all of humanity, right?

I don't have to worry about humanity being wiped out by a bunch of people with sticks and stones, right?

I have to worry about humanity being wiped out by nuclear weapons, which could only be invented by smart people. Right, yeah, yeah.
Are smart people more cooperative in a sort of very calculating sense that, you know, this game is going to go on, so I want to make sure I preserve my relationships? Or even in the last turn of an iterated Prison's dilemma game, even in the last turn, they would cooperate. No, in the last turn, they walk away.
Yeah. Yeah, yeah.
Yeah, I think there is no correlation between intelligence and, say, agreeableness, right? Normal psychological agreeableness. And I think that's a broader principle or conscientiousness for that matter, right? Psychological conscientiousness.
So Machiavellian intelligence, I think, is what's driving the link between IQ and cooperation. So in repeated game, that Machiavellian intelligence, which a lot of intelligence researchers will talk about, turns into Kosean intelligence where people find a way to grow the pie.
But it's a very cynical, self-interested form of growing the pie. Yeah, yeah.
And so I don't think that has any, I don't think it's driven by inherent pro-sociality. I think it's endogenous pro-sociality, not exogenous pro-sociality.
And that's a reason to worry about it. What happens to these high IQ people when if society goes into into a sort of zero sum mode where there's not that much

economic growth.

And so the only way you can increase your share of the pie is just by

cutting out bigger and bigger sizes for yourself.

Yeah.

Like then you are going to watch out,

right?

It's like the middle ages right there,

right?

Yep.

Yeah.

Yeah.

Yeah.

Yeah.

Interesting.

Awesome.

Garrett,

thanks so much for coming on the podcast.

This was interesting.

Thanks for having me. This has been fantastic.
Yeah. Excellent.
Thanks for reading my books. Appreciate it.
Awesome. Garrett, thanks so much for coming on the podcast.
This was interesting. Thanks for having me.
This has been fantastic.

Yeah. Excellent.

Thanks for reading my books. Appreciate it.

Yeah, of course.