Intellectual classes, technological progress and economic development: The rise of cognitive capitalism

Cognitive ability theory claims that peoples’ competences are decisive for economic wealth. For a large number of countries Lynn and Vanhanen (2002) have published data on mean intelligence levels and compared them to wealth and productivity indicators. The correlation between intelligence and wealth was supported by studies done by different authors using different countries and controls. Based on their pioneering research two research questions were developed: does intelligence lead to wealth or does wealth lead to intelligence or are other determinants involved? If a nation’s intelligence increases wealth, how does intelligence achieve this? To answer them we need longitudinal studies and theoretical attempts, investigating cognitive ability effects at the levels of individuals, institutions and societies and examining factors which lie between intelligence and growth. Two studies, using a cross-lagged panel design or latent variables and measuring economic liberty, shares of intellectual classes and indicators of scientific-technological accomplishment, show that cognitive ability leads to higher wealth and that for this process the achievement of high ability groups is important, stimulating growth through scientific-technological progress and by influencing the quality of economic institutions. In modernity, wealth depends on cognitive resources enabling the evolution of cognitive capitalism.

► Newer and corrected IQ data (by Richard Lynn) correlate higher with logged GDP.
► Correlations: r = .77, N = 96 (measured IQs); r = .68, N = 185 (also estimated IQs).
► Longitudinally each IQ point has raised wealth by US $279.
► Wealth depends on STEM excellence (β = .57) and economic freedom (β = .40).
► The share of an upper ability group is relevant for STEM and economic freedom.