Dwarkesh Podcast - Garett Jones — Immigration, national IQ, & less democracy

Episode Date: January 24, 2023

Garett Jones is an economist at George Mason University and the author of The Cultural Transplant, Hive Mind, and 10% Less Democracy.This episode was fun and interesting throughout!He explains:* Why national IQ matters* How migrants bring their values to their new countries* Why we should have less democracy* How the Chinese are an unstoppable global force for free marketsWatch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform.Timestamps(00:00:00) - Intro(00:01:08) - Migrants Change Countries with Culture or Votes?(00:09:15) - Impact of Immigrants on Markets & Corruption(00:12:02) - 50% Open Borders?(00:16:54) - Chinese are Unstoppable Capitalists (00:21:39) - Innovation & Immigrants (00:24:53) - Open Borders for Migrants Equivalent to Americans?(00:28:54) - Let's Ignore Side Effects?(00:30:25) - Are Poor Countries Stuck?(00:32:26) - How Can Effective Altruists Increase National IQ(00:39:13) - Clone a million John von Neumann?(00:44:39) - Genetic Selection for IQ(00:47:02) - Democracy, Fed, FDA, & Presidential Power(00:49:42) - EU is a force for good?(00:55:12) - Why is America More Libertarian Than Median Voter?(00:56:19) - Is Ethnic Conflict a Short Run Problem?(00:59:38) - Bond Holder Democracy(01:04:57) - Mormonism(01:08:52) - Garett Jones's Immigration System(01:10:12) - Interviewing SBF Get full access to Dwarkesh Podcast at www.dwarkesh.com/subscribe

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 time frame. 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 scale level of voters the average traits that we're bringing from our ancestors are having an effect on our current productivity for good to real 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 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 review 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 someone 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 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 a 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 Transplanned.

If you had to guess, do the benefit 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 it's 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 migrants. 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 those are the countries where the average test score, it doesn't that be IQ,

could be just PISA, Tim's 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 context, 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 that it has. had more effects. It's people at the top who are, tend to be coming up with the big breakthrough, the big scientific breakthroughs,

the big intellectual breakthroughs that end up filling over to the whole world. Basically, the positive externalities of innovation. This is a very almost polyana-ish, Paul Romer, new endogenous, new growth theory thing, right? Which is the innovations of the elite just swamp the negatives of the Loves Guild 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 the if you just let in you know millions of low-skilled immigration immigrants and maybe there's some cultural effects to that too but you know you're also going to that the elite IQ will still be preserved and more elites will come in through the borders along with the low-skilled migrants so then you know since we're carrying about the deviation anyways more immigration might increase the deviation

and then, you know, 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 swallow 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 is that that's a, that's, that swamps the benefits of increasing variance 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, 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 of 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. But institutions are downstream of culture.

And 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 assimilate it. But migrants assimilate us. Native Americans certainly changed in response to the movement of Europeans. English Americans certainly changed in a 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 psychologists would understand. No, I'm sure you saw the book that was released, I think, in 2020, titled Richard Refuse, where they showed a slight positive relationship

between immigration and pro-market laws. 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 Noraste. They ran a statistical analysis that said, and they said, in all of the statistical analyses we've ever run, we've never found a 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 law. 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. On the y-axis, you show the change of prices, right? This is Milton Friedman's idea. Money is always everywhere everywhere, everywhere, 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 to click 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 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 of it? I'm not really interested in migration per stay, right? My story is never that like migration per se does this bad thing. Migrants are bad. That's never my story, right? Mm-hmm. As you know, right? Yeah, yeah.

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 upper debate. So if you had to 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 then? Yeah.

I mean, just off top of 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. Yeah, yeah. Currently, we probably don't have, it would probably be hard for like 20% 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, when I call SAT Deep Root scores, and countries that are, say,

half a standard deviation above the U.S. level in all three, right? Why do they ever be higher? Why not just equivalent? Like, you know all the gains from trade, and plus it can't be, you know, equivalent, so there's no trade. Part of the reason is because the entire world depends on U.S. innovation.

So we should have made, 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 somebody just comes to the U.S., 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 pack the,

you find the best people you can. You know, 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 don't get the best? That was Jimmy Carter's. That was Jimmy Carter's biography. Why not the best?

But you can do that along with getting people who are, you know, unexpected terms, as good as the existing Americans. I don't get what you want this. This seems like crazy, right? What are you talking about? But I'm not sure. Why not the best?

Why not the best? Huh? 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 hard core, you'd have to find out what's best for the planet as a whole. What's the tradeoff 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 we're the medians 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. That's, 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 a start quite in one's missing possible. I'm like, why not? I'm not disagreeing with you. I'm just a little confused about why that that precludes you from also getting the second best thing possible at the same time. Because you're not limited to just the best, right? 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, 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's 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 1,500. It's basically what fraction of the world's technology were your ancestors using in 1,500 before Columbus and his expanse of conquest ended upending the entire world, 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 forced majority Chinese country? Are there like nonlinear dynamics here where if you go from 40 to 90% Chinese, there's positive effects, but if you go from 90 to 90 to 90, 25% 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 that 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-roof-roof-outlier than China is, right? It's like don't have a communist dictatorship in your country. Seems to be pretty a robust lesson for a 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 stuck in an, currently China is 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 probably be a lot, lot better off in China's day. Yeah.

But what is that suggestion about the Debrose literature If the three biggest countries in the world China, India and America It underpredicts their performance Or sorry, in the case of China and India It overpredicts their performance And in the case of America it underpredicts Does that just decide maybe the 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 underperforming isn't that huge. The U.S. is a miracle along many ways. It's, we should draw our lessons from the typical country. And I think a 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 Indian China. He only checked the S and the A and 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 in 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 Naroste never managed to run the simplest test, change in migrant corruption versus change in economic institutions. Somehow, like the simplest test just never get run. Okay. And then what is the impact if you include T? If you look at T, 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 the simple things, the transparent things. I don't know why.

Weird on. The one you mentioned from, was it Narossa, the name of the guy who wrote the Richard at Refuse? Yeah, yeah. Powell and Naraste, yeah. You said you did the regression on institutional corruption and from the countries that come from. Is that right? And so, yeah, the measure they use, I just 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. Uh-huh. 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 idea is 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 worse comes to worst, it's not like there are a whole bunch of great new theories that we're 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 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 has 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, immigrants 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 immigration there. What is a harm in then using the other? 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 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 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 U.S., 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 with 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

agglomeration of talent and capital and other things, which is not true of Iceland, right? So 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 there is that institutions exogenously exist. There's some places have moderately lazy-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 institutes of 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. His 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 population, global world's population that comes from. Yeah. Equivalent S.T 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 hundred, $100 bill on the floor, you wouldn't pick up a $20 bill on the floor because you only won 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 until like an $80 bill and turns all of your $800

bill than $80 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 map this up for the, you know, in a popular book. But it means we face a tradeoff 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. What we didn't lower it? So you have to have skills that are lower it compared to the median of median American.

This is a Cedera's Parabas story, right? Like if you could pose the US is at 80 now on a zero to 100 scale, right? It's just just to say. And you have a choice between being 100 and being 99. If you're 99, the 99 is making all, compared to the world of average of 100,

the world of an average 99 is making reducing the productivity of all those hundreds. Okay. 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 median of America. At that point, and this is because we've admitted a whole bunch of like 99s that have just increased our average.

Yeah. At that point, open borders for everybody who's above 805. Like I, this is, this is. up being a math problem. It's a little hard to solve in a podcast, right? Because it's the, 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, it doesn't just mean a compositional effect. I mean negative externalities. I mean relatively fewer positive externalities. So I'll use the term relatively fewer positive externalities rather than negative externalities, right?

So, like, I don't exactly know where this is tradeoff 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, because that person's going to ruin the, ruin stuff for the other smart people. It's amazing how your worldview changes when you see everybody is an externality. I'm kind of confused about this because,

just having at some point you're going to run out of the smartest people the remainder of the smartest people in the world if you've admitted all the brilliant people given how big the US population is to begin with you're not going to change the median that much by doing that right so it's almost a goal into 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 and that 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, they're the point in which I have to say, like, I don't know, right?

Okay. 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 cultural will become worse. it's possible it'll become better. It's possible it's stay 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 effects 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 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. 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 it running the experiment in America, right? Why not running in Iceland first? Because America's got a lot of great institutions, right?

But we can check and see what Iceland. Iceland's a great place, too. I don't 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 Route has a 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's, 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 has created 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 can might be able to be interested in moving to a poorer country with lower SAT scores. In a better world, you can 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... 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, I mean. Idiotameen, 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's poorest countries. You're right. Iodine, basic childhood and 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 brain. 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

that's certainly important in the poorest countries. Yeah. I think Brian showed in Open Rooters. If you look at the IQ of adoptees from poor countries who go as Sweden is the only country that collects data. But if you get adopted by a parent in Sweden, the half the gap between the averages of those two countries. Yeah, yeah, yeah, goes away. So, I mean, it is one of the ways you can increase global IQ just by moving kids to to 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-border advocates tend to be focused on the short-run static effects.

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. 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 still raising the global IQ, that is still nets out positive, or am I remember 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 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 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 the corruption or whatever, but just directly the amount of innovation that happens or maybe the know, global prizes 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 that low SAT scores, is it possible that U.S. GDP capital 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 rules, 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 that are the nations of our ancestors, is having an on our current productivity for good or real. It's just following through the reasoning, I'd have to say on average,

up most likely, but there could 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 level. So that's literally not an externality, right? So some of these other cultural trait that people are bringing with them from their ancestors, nations of origin could be 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 you 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 Monnoyman's, and assumed that John Monument had an IQ of 180, then you could, let me just follow 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 US GDP by 1.26%.

Do you buy these kinds of extrapolations or... 1.26%? Yeah, yeah, because you're only cloning a million, John Mono. Oh, yeah, okay, so this is about one million John Mono. Yeah, 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 love 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 Monard, if you want to find. Oh, okay. Yes, yes, yes.

Okay. Yeah, 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. So yeah, if you had a choice of which country to have the John Bonnoy, the million John von Neumann's, it's probably going to be one of the I-7. Maybe there's a 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, you know, because there are 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, their, you know, teachers in their local community. I think there was a result, there was 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 that, you know, they had like

a hundred applications for every cop they hired. And so they were able to hire the best and the brightest. And there were just 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 U.S. does a pretty good job of that. I don't have any huge complaints at that, at the crudest 50,000 foot level. For the, you know, the fact that people know that there's a status game that they can play within academia.

that are perhaps more satisfying or at least as satisfying as the sort of corporate hierarchy stuff. So yeah, 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 work 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, People leave, smart people leave Kentucky and go to San Francisco or? Yeah, I'm a big glomeration guy. Yeah. Yeah, I'm a big galomeration 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, there's, there's something, uh, both Hansonian and Gerardian 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 return? to national IQ? No, I think

in 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. But this is a commonplace finding in a sense because so many like all the human capital relationship I'm familiar with

end up having something like a log linear form. which is exponential. Why is that? Yeah, there's something multiplicative. That's all I have to say. It's 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 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, 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 test 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, yeah. At least for the transition.

I don't know what, I don't know what's going to happen after the transition, but. Yeah. I'm hoping that's not true of programmers or economists like you. I mean, it might be, right? I mean, if that's the way it is,

I mean, I, I mean, the car put a lot of people who took care of horses right out of the out of work. Yeah. Yeah. Okay, so let's talk about democracy. I think this is also one of your really interesting books. Oh, 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 don't know enough about micro-economics to know how the object-level decisions they make, but, you know, it seems to be a non-corrupt, like, technocratic organization. Enough of me. But yeah, yeah.

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, what, what determines how well a institution in the government works. Well, I think in the case of the Fed, it really does matter that they, the people who run it have 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 of the Fed.

So they really have the kind of independence of 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 McNulgast, polysargon. 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 that,

the fact that Congress doesn't really want to meddle with them. But in 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 the first order important. I mean, I do think the fact that FDA and CDC don't seem to have that culture of raw technology. 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. Like more of 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 the 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 an 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, and 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, their sort of laissez fairness on the path to getting ready for joining an 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 market- so 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 at. 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% GDP differences, which are very exciting to pundits and bloggers and whatever. I'm like, 30% doesn't matter very much. It's not really my bailiwick. What I'm really interested is a 3,000% between the poorest countries and the richest countries. So like, I can speculate about Europe. I don't really have a great answer. I mean, 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 trans 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, a pair of us. Like America, America gives 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 elite 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

president. I mean, that's why my book 10% unless democracy really is targeted at the rich, 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 Tulloch rent seekers and steer everything toward themselves and not give a dart 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 a, that meet the marty ascends definition of a democracy.

Competitive market, competitive parties free press. Does Singapore meet that criteria on? No, because their party don't really allow 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 low level democracy wind up much worse.

What is your opinion of near reactionaries? I guess they're not in favor of 10% less democracy. They're more in favor of 100% less democracy. Yeah, I think they're kind of too much larping, too much romanticizing about the Reherom, I guess. I don't know. What did the Reherom? Yeah, all 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 counsel, right? And so it's worth thinking through why king and counsel 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 economic 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, Smith of the Rational Voter,

right? Yeah, I think part of it, I mean, I think his stories are right, which is that politicians facing re-election have this trade-off 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 a burden of saying, like, you know, I don't want you to pull off the Band-Aid, but I want my wound to all get better. So then so the politician has to, 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 budding heads at the workplace, right? So over time, and you're right. Like that anti-German ethnic sentiment in the U.S. totally gone, right? But over time, so then this is another one of those short run effects that you emphasize that you 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 hearty perennial. It's not the only conflict that people can ever have. I don't, I don't know to what extent they'll, 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 hadn't happened yet in all the documented human history we have.

People seem to find some ethnic bounds for conflict. It is worth pointing out that the one study that I report, I think it's a Waggiard co-authent piece, but when the real, 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 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 bet them easily?

I mean, I have to say that this has 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, yeah, lower, basically not banning, not, banning disclosure of data.

I'd say that's the most important thing we can do. I think you sometimes hear that medical doctors, I haven't checked up on this a long time, but apparently medical doctors often make it very risky to give bad reviews. Sometimes 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, 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, you know, what is 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 been stumped here. So can you rephrase the question again? I'm trying to think through what the question is there. Yeah. If bondholders do extend the longevity and the long-term thinking of the organizations on who they hold bonds, why aren't corporations who, 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, they're ideas that you try out. And then it, like, 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 Haltrowhanger line of research,

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 are 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 in 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, 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 towns of 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. Right. 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. 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's still getting, say, 1% and 1.5% richer each year, then that by itself means that, you know, that adds a certain level of quality to health care 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 would end up closing the gap when you compounded out long enough, right? Yep, yep. That kind of thinking. So, you know, when list trusts in the UK

tried to implement tax reform, the bondholder revolt, and, you know, she was ousted. Yeah. Bondhold was one right there. Yeah. So do we already live in the bondholder utopia? 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, the 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 type? their communities. I mean, I think part of it is that they are, they reflect a lot of this sort of, what for then 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-societion And I think that helped them weather the storms of the 19th century. So 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 the part of the reason is because I'm too much of a free rider. So Mormons 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? It's, 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. You know, I don't actually know what their plans are for what they would do with all the money, but I do know that like normal economics tell us that just being frugal is good for the economy overall.

So Stephen 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. Right. Yeah, yeah, but okay, so it's interesting. Like, leaving a large inheritance is socially valuable. Yeah, leaving a large inheritance means you're leaving, 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, can 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 I'm a, everybody I know who's ever had cut co knives into abusing and protected. 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. At least the men's one, it works out. If you had an implemented immigration system from scratch, would you ask So 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 and 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 supplied 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, 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. How was the SBF thing? What do you mean? So did he just say, like, I'll fly you out? So I was there for the EA Bahamas. Oh, okay, okay.

Yeah, yeah. And then while I was there, I talked to somebody who knew him. And I'm like, hey, I would love to interview him. Yeah, yeah, yeah. Yeah, yeah. It was one of the ones that were actually, 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 asking about in retrospect.

And of course, it's all in retrospect. But I should have foked harder at that rather than asking these sort of philosophical questions about a fact of altruism. Yeah. Do you think, I mean, is it as simple as like, he was co-mingling fund. He lent a bunch of FTX money over to a hedge fund and then they lost it? Yeah, I'm guessing.

Perth approximation. Yeah, yeah. So it's like it's old-fashioned financial fraud, partly driven by not having a really good board over a good oversight. You know what? I'm really curious to ask you with this because, you know, you're talking high of mind about the fact that higher IQ people on average are more cooperative and prisoners dilemma type situations.

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? Yeah, yeah. There is this thing where maybe there are less likely 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 what people do come in fraud. They're super successful at it. You know, I don't know. Yeah, I mean, the evil of, of, 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, 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 a. iterated prisoner'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 Kocyan 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 prosociality.

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 a sort of 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 of yourself. Yeah, like then you ought to watch out, right? It's like the middle ages right there, right?

Yeah, yeah, yeah. Yeah, interesting. Awesome. Garrett, thanks so much for coming on the podcast. This was interesting. Thanks for having me. It's been fantastic. Yeah.

Excellent. Thanks for reading my books. Appreciate it. Yeah, of course.