Do The Smart Help More?

Each new person who exists either helps or hurts everyone else.  My best estimate is that new folks on average help, but I can’t be very sure.  Assuming that new folks help on average, we can wonder: who helps more?

A first guess is that helping is roughly proportional to productivity.  That is, we help by making the world economy more productive overall, so those who produce more help more.  (This roughly captures innovation externalities and global scale and scope economies.) If so, it would not help to subsidize some of our efforts if that came at the expense of taxing the efforts of similarly productive others.  But it might help to subsidize creating new people.

A simple correction to this first guess is to consider charity, under the assumption that charitable giving helps others more than random spending.  Since the poor seem to donate a larger fraction of their income to charity, this would suggest that the poor help others disproportionately, relative to their productivity.

We might also wonder: do smart folks tend to help others more, relative to their productivity?  Last week Linda Gottfredson and Garett Jones surprised me by claiming that this was so, saying that smart folks contribute disproportionately to innovation, and thinking this was obvious.

Gottfredson called the low IQ “dependents” and the high IQ “innovators”; Jones pointed me to smart folks’ disproportionate contributions to patents and startups.  I told Jones these are indicators of the high tail of innovation, not the median; his argument was like saying that rich folks tend give a larger proportion of income to charity because most charity foundations are started by rich folk.

One might argue that since dumb folk just follow routines devised by smart folk,  change must come from the routine makers.  But change also arises from mistakes in following routines, and the dumb may make more mistakes.

The smart may also on average do more wasteful arms racing and signaling, especially affiliative signaling.  The smart seem to dominate musicians, athletes, artists, writers, professors, doctors, lawyers, soldiers, fashion designers, and so on, out of proportion to their compensation.  If these activities tend to contribute proportionally less to overall world productivity, then smart folks would seem to help proportionally less.  They can’t exactly be blamed for filling a slot someone else would fill anyway, but they can’t exactly be praised either.

Added July 9: Garett Jones tells me he doesn’t emphasize the smart as innovators; he suggests the smart help mostly by promoting cooperative institutions; John Nye suggests to me that the smart hurt their local associates by being more worldly and cosmopolitan, and so less loyal to local concerns.

GD Star Rating
Tagged as: ,
Trackback URL:
  • A simple correction to this first guess is to consider charity, under the assumption that charitable giving helps others more than random spending.

    How confident are you of even that much? There might be charities with very decent returns, but it’s not obvious that contributing to average charity is better than simply buying something that you want from some poor country.

  • Anonymous

    The problem on its head is more clear. Who harms most? Smart people perform violent crimes, average and dull people do so more often. Average and dull people seek out intellectual solutions (democracy, debate), smart people do so more often. Smart people fail to harm most.

    Please keep asking questions about intelligence and life outcome. There is a taboo or two to be found there worthy of your criticism.

    • Mike

      I’m not so convinced about this line of thought. How does domestic violence compare to warfare? Guns and bombs do a lot of harm, and they were made by smart people.

      I have a feeling this isn’t an illuminating discussion. I suspect a great deal of influence is held by a relatively small number of people. We really don’t want the answer to depend on whether we classify Hitler or Zedong as smart or not. Also, I suspect we lack attribution for the most important innovations. For example, who played what part in constructing the set of conventions that we now consider a “market”?

      • gwern

        > I’m not so convinced about this line of thought. How does domestic violence compare to warfare? Guns and bombs do a lot of harm, and they were made by smart people.

        They do a lot of harm, but you’re still better off with modern warfare; consider the fatality rates of the Yanomano or the !Kung. Even modern society is better if you compare murder rates in medieval London, say, with contemporary. If we can identify modern with smart, and primitive with stupid, the choice is clear. The brains giveth more than they take.

  • How about savings? Your personal savings benefit a enormous group by a very small amount, whereas your charity (hopefully) benefits a relatively small group by a relatively large amount. The “illusion of control” bias probably makes us feel more helpful to others with charity, but I am not confident it is the case.

    Since “the rich” engage in more savings and investment in proportion to their income, it seems that they may be more helpful to others than suggested by their productivity.

    • The net benefit to others today is probably mainly via spending. Savings benefits future folk more.

      • Captain Oblivious

        I think savings benefits present folks as well as future – when you get a loan for a car or house, where do you think the money comes from?

  • How would you measure the external costs and benefits of an individual upon society as a whole? Assuming there were some range of flux in consumption and production associated with each individual, couldn’t we look to see whether, at least at a given moment, an individual was either below or above the range?

  • ShardPhoenix

    How does the idea that more people are better fit with the substantial rise in quality of life in Europe after the Black Death?

    • bob smith

      This sentence makes no sense.

    • Doug S.

      The world changed a lot during the Industrial Revolution. For the first time in 3,000 years, the marginal productivity of a new person rose above the subsistence level. Prior to that, all improvements in technology simply allowed the population to increase until the general population was once again living at the subsistence level. As some wise guy once put it, the rich got richer and the poor had kids.

      Killing a bunch of people off would let people who were stuck at the margin take over from those who weren’t. For example, farmers who were stuck with relatively unproductive land could leave it for more productive land whose occupiers had just died.

      Paul Krugman explains.

      I’ve also seen this attributed to what might be called political factors. With the supply of labor reduced, the nobility ended up in a worse bargaining position, and were unable to extract as much of the wealth. In economic terms, there was an increase in labor’s share of income, leading to a rise in the median standard of living.

  • bob smith

    smart people innovate and in that sense they contribute more to production, but why do you assume that all production activity is the same? smart people designed small arms, like ak47s, and big arms, like nuclear weapons. while in the short run, the production and trade of ak47s may have produced jobs and contributed to gdp, in the long run it has had immeasurable economic costs, hasn’t it?

    when do we consider the social and political consequences of innovation and of trade, not in an ethical sense, but in a concrete economic sense?

    consider that the emergence of revolutionary socialst and communist ideology was an inevitable consequence of industrialization in the 19th century and beyond. now consider the immeasurable economic costs associated with two centuries of revolution, instability, security competition, and warfare. it certainly wasn’t the stupid automatic textile manufacture, making rural trades obsolete, and paving the way for the luddites, the proudhons, the bakunins, the marx’s, was it?

    do the smart cost us more?

  • bob smith

    I’m sorry, that should have read: “It certainly wasn’t the stupid that automated textile manufacture, making rural trades obsolete.”

  • Each new person who exists either helps or hurts everyone else.

    I expect that it’s hard to tell for the vast majority of people. They’re having financial and emotional effects that are hard to track, though I think it’s fair to say that most people have a mildly positive effect– the human race is still here, in spite of the effects of entropy.

    I find the Atlas Shrugged hypothesis (that a very small minority is doing almost all of the useful work) implausible, if only because most child raising is done by people from the middle of the bell curve (no matter what you’re measuring), and if you don’t have a next generation, you don’t have a human race.

    It’s reasonable that smart people (and energetic people, and conscientious people) have more effect than those who lack one or more of those traits, and by a similar argument, most of them have a least a mildly positive effect.

    A lot of people who are doing the most good in the economic realm are already getting rewarded. Unfortunately, so are those who are good at gaming the economic system. (I’m still twitching about how much energy and intelligence it took to create the economic crisis.)

    I don’t know if there’s a good way to subsidize being a good influence emotionally, even though that’s very important.

    I’m wondering if it’s better to look at trying to cut back on friction in the system. Who’s really causing the most damage? How can they best be discouraged from continuing? Can they be convinced to behave better?

  • Z. M. Davis

    What if we place intrinsic value on intelligence? Even if creating more smart people were to lower GDP, some of us might still consider it a win, because smart people are more fun to be around, whether or not they’re contributing to the bottom line.

    • Jess Riedel

      You should be careful with your use of the term “intrinsic value”. I think you mean to ask, “What about the positive externalities, which are not captured by GDP, associated with intelligence?” If you were in fact talking about the *intrinsic* value of intelligence, you would be suggesting that we take into account some value assigned to intelligence for its mere *existence*, independent of any utility derived by other people in its vicinity.

  • Captain Oblivious

    If you think there’s anything at all to Malthus’ position, it’s possible that nearly everyone is a net negative – perhaps we’d all be better off if there were fewer of us.

    • Doug S.

      Malthus was right for basically all of history prior to his work being published. Then the Industrial Revolution hit, and productivity actually began to grow faster than people could breed.

      Again, Paul Krugman does a better job explaining than I do. He has charts!

      • Captain Oblivious

        Interesting analysis – but it seems likely that there’s some threshhold beyond which the planet cannot support additional people, not even with advancing technology (whether that number is 1 billion or 10 or 100 billion is another question entirely).

  • Adam M

    In the point about the poor contributing more to charity…is it right here to consider only the fraction of income? If the rich give a larger absolute quantity to charity, then aren’t they helping more? I’m not quite sure how the logic goes here, so correct me please, but it seems like charitable donation would be positively correlated with productivity (measured as income). C = logY?

  • Neil

    I don’t think I’d conflate helping in the direct charitable sense with helping in the indirect grow-the-economy sense.

  • Where’s the evidence that charitable giving actually helps others? Especially in comparison to saving or investing the money?

  • Samantha Atkins

    What exactly is meant by “overall world productivity”? It is never defined. I would bet that advances in science and technology and their implementation in actual products, techniques and tools changes the “overall world productivity” much more substantially than simply more people doing mostly what has been done before or what they are told to do.

    I also very much question whether the average or below are likely to be gainfully employed much less more likely than the bright. It has been variously estimated that as much as 50% of the population in developed countries is either directly paid by government, receives more handouts than it pays in or otherwise a net drain on the society by consuming much more than they produce. So mere increase in numbers is not an unmitigated good except perhaps that the hyper-productive relatively rare individuals are more numerous in a larger sample set.

    Is there any actual data or is this just pure wool gathering?

  • Taimyoboi

    “But change also arises from mistakes in following routines, and the dumb may make more mistakes.”

    It’s not who makes more mistakes, but who recognizes when a mistake is made.

  • josh

    The following is all speculation obviously:

    It seems like smart people today are less likely to be doing something economically productive than they were in the past. It may be one of the problems with places like Africa is that the highest status jobs are essentially concerned with redistributing wealth created by others (often to one’s self). The same thing may be happening in America. There are few positions in private enterprise as prestigious as working in a University, for a think tank, at a non-profit, etc, or for certain parts of the beaurocracy (State, DOJ (not including FBI), etc.). Meanwhile, CEOs are villified, and middle management is a source of ridicule. There are hardly any “captains of industry” that are held in high regard. Steve Jobs may be an exception, but I think this may be because computers are associated with “science” which held in high regard. Perhaps some of these former positions contribute to growth, but as I believe Robin has pointed out before, most growth comes from marginal improvements in the process, not from R and D or “science”. So perhaps, the smart people are capable of becoming more parasitic than the dumb people.

  • the bullcooker

    Each new person who exists either helps or hurts everyone else.

    They do both, there’s no way to measure either, and absolutely no way to compare the two.

    My best estimate is that new folks on average help, but I can’t be very sure.

    I’m glad you’re not sure, because I can’t imagine how on earth you arrived at the conclusion in the first place.

    If this line of thought is true, what difference does that make to anything? If it isn’t true, what difference does that make to anything? Explanations welcome, because I’m not one of the smart people.

    • Michael Bishop

      Just because something is hard to measure doesn’t mean that we shouldn’t try. We should try, while also trying to understand all the ways in which are measurement is imperfect so that we know exactly how much confidence to have.

      If we estimate that, on average, each new person makes the world better, then I might choose to have more children. Or I might encourage others to have more, or support government policies which increase population growth. Of course, these aren’t the only things to consider.

  • I just added to the post.

  • babaer

    with the advent of computer and technology and its integration into other areas (medical, financial sectors) ‘smart people’ are more competitive for occupations that pay economic rents.

    wall street quants, traders
    intellectual property lawyer
    upper level corporate manager
    owner of medium of information exchange or market

    whereas in the past economic rent was more correlated with ownership

    oil well owner
    factory owner

    and so ‘smart people’ had less of an advantage when it came to economic rent.

    does your answer depend on this?