Friday, January 13, 2012

A Possible Mechanism and Model For Producing a Mischelian World

John Rawls had a famous thought experiment about social justice and the distribution of wealth, which was answered by Nozick. Mischel did his famous marshmallow experiment, showing that there is a distribution of ability to delay gratification in children, and that this corresponds with life outcomes.

There would seem to be an implication from Mischel's work for Rawls and Nozick. This is summarized here. The point to take from Mischel is that the individual players in the game differ in important ways, and any concern about the effects of wealth distribution must take this into account, or such efforts are doomed to be quickly erased. However in a global economy, if delayed gratification differs not just between individuals but entire countries, we might expect to see economic differences. There is a gated paper on this here and a writeup on Discovery blog here with more data.) Here's the average delayed gratification by country, when participants were asked whether they would take $3400 now or $3800 a month from now. (I don't know if or how they controlled for age, education, etc. for each countries.)

Because I couldn't get the numbers that made that graph, I eyeballed the graph and made this scatterplot of delayed gratification against per capita income by country (per capita data is 2011 IMF).

For what it's worth an exponential function fit the curve better (0.3852 vs this one).

If we're interested in these numbers to measure the impact of human intelligence on economic outcomes, there are some adjustments that we might like to make. (and by we, I mean a grad student with better data and more time). For example, if a rogue comet hits Canada tomorrow, their economy will suffer, but it's not because they weren't smart. So instead of per capita income, let's make the outcome the percent increase in per capita income since, say, 1961 (i.e. South Korea and the Czech Republic started off way behind and they're doing pretty well considering). Adjust that figure downward for each country by taking out their last fifty years of mineral wealth, especially oil - it's what you do with the real estate you have once you have it (i.e. happening to be sitting on oil and gold reserves is luck, not industry, and Norway's reported income is $96,951, a huge chunk of which is oil; are they really that much better than Japan?). Also adjust that number upward by estimating the the cost of wars, including civil. (Where would Vietnam and Colombia be otherwise?) Finally, adjust downward for foreign aid received during that period - for some developing countries this is a substantial portion of GDP. My prediction is that the relationship between wealth and cognitive measures, like this one, would become much clearer.

Another troubling suggestion is that, if the players in the game differ individually, if any of these differences are heritable and people of the same economic level mate based on that fact, then such heritability might declare. But over what time period? So imagine a 100% efficient economy dependent on trait X (doesn't have to be delayed gratification), and not at all dependent on family relationships (outside of those you'd expect if trait X were heritable; i.e. no nepotism, and the CEO's son doesn't get the job unless he's actually as good as his dad and deserves it). You can call trait X "merit", whatever it is that's merit-worthy in this economy. Assuming that merit is equally heritable as we know intelligence to be, i.e. conservatively about 60%, here you can see here an anthropologist's simple model for how in just 100 years if merit is at all heritable, even a true non-nepotistic meritocracy would begin to produce two genetically distinct groups. That is to say: in any society where humans vary genetically in the trait that is being selected on - which is every society - there will be separation into groups by the "selectand".

Possible solutions would seem to include: tolerance of this separation (less likely by claiming it's not a problem, more likely by pretending it isn't there and refusing to discuss it openly); forced intermarriage between groups; or changing the selectand. This latter has certainly happened during the industrial revolution as the economy changed radically and different traits became important for success. Delay of gratification is likely one such trait. As profit-generating enterprises become more complex and longer, it's reasonable to project that delay of gratification will become more important in the future.

It seems non-controversial to say that since ability to delay gratification differs between countries, it must be a result of nature and/or nurture. If it's entirely heritable, that would be bad for the impact of a global economy on those countries that currently show a high time preference (i.e. don't delay gratification), because we can't do anything about that. Being optimistic and assuming that this trait is entirely a result of nurture - that is, culture - then it seems even more uncontroversial to say that culture matters to economics and therefore to human well-being, which is the whole reason anyone worries about all this. Otherwise culture is irrelevant noise.

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