What the GSS really says about intelligence and economic attitudes

Bryan Caplan of the blog EconLog has a post which he titles Intelligence and Economic Beliefs. Bryan has coauthored a paper with Stephen Miller in which he alleges the above statement to be true based on data in the General Social Survey. The GSS happens to be my recent area of expertise.

I have posted recently in my blog that intelligent people are more libertarian on economic issues. However, Bryan Caplan goes far beyond this simple correlation and writes that “Basic economics is true, and smart people are more likely to believe what is true.” I find this to be obnoxiously self-congratulatory and not entirely supported by the data.

Bryan and Stephen also seem to be confusing economics in general with right wing economics in particular. A left wing economist like Paul Krugman would surely disagree with Bryan on a lot of economic issues.

So let me explain what the data really says:

(1) More intelligent people are more libertarian on all issues, whether it’s abortion, free speech, or legalization of marijuana. In fact, the link between intelligence and libertarian thinking is actually weakest in the economics area.

(2) For almost all attitudes questions in the GSS, the score on the Wordsum vocabulary test is more strongly predictive than educational attainment. This is because education doesn’t make a person any smarter. One very important exception is when it comes to predicting income. Educational attainment predicts income and the Wordsum score barely has any effect (surely an example of labor market inefficiency).

(3) On most economic issues, income has a stronger effect than the Wordsum score. People with more money are more likely to be in favor of “conservative” economic policies. And people with less money favor government redistribution of wealth. This is a case of people voting their perceived self-interest and not a case of people using or not using their brains.

(4) After income, intelligence is a secondary predictor of more libertarian economics views. This is part of the more general principle that smarter people are more libertarian. But I would not go so far as to say this proves anything about economists in particular. Because political issues are more about emotion than logic, smart people more often use their brains to justify their feelings than to try to use the scientific method to ascertain the truth.

Comments

[Dennis Mangan]

"Educational attainment predicts income and the Wordsum score barely has any effect (surely an example of labor market inefficiency)."
That's a great bit of data. Inefficient markets are everywhere and they're the bane of economists. They throw a monkey wrench into the entire profession.

[michael vassar]

I think that it is likely that Paul Krugman and Brian Caplan agree on what issues constitute "basic economics", that it is very unlikely that Paul Krugman and Brian Caplan disagree with one another about issues that they consider to be "basic economics", and that it is very likely that they both disagree strongly with much of the "educated masses", e.g. the sort of people who have word-sum scores of 8 or 9, on these issues.
People who score below 8 probably don't have any substantive or consistant economic beliefs (or possibly any economic beliefs at all) seperable from political alliances and crude short term appearent self interest.

I am very far from convinced that the second clause of the quote below follows from the first clause. I am however very convinced that smart people more often hold correct beliefs on essentially all issues including declaritive political issues (e.g. what the likely effects of a given policy are) which seems to undermine the thesis which the quote was given to support.
"Because political issues are more about emotion than logic, smart people more often use their brains to justify their feelings than to try to use the scientific method to ascertain the truth."

[Half Sigma]

If the GSS asked a truly basic economics question, such as "How does a monopoly effect prices?", we can be sure that smarter people would be more likely to get the correct answer.

But most of the GSS questions measure values and not economic facts. I'm sure Paul Krugman and Bryan Caplan have different ideas about whether the government should regulate business or equalize wealth.

Smarter people are just more libertarian, however it's interesting that there's no corrlation betwen legalize-marijuana libertarianism and economic libertarianism when people with the same Wordsum scores are comparted.

[cpurick]

"Bryan and Stephen also seem to be confusing economics in general with right wing economics in particular."

Hmm. I'm going to have to go by the bookstore and look for the "right wing economics" section.

"A left wing economist like Paul Krugman would surely disagree with Bryan on a lot of economic issues."

I think I see the problem now. Apparently, people who want to believe that Paul Krugman is an economist are now dividing economics into left and right "wings." How cute. I guess that's one way to keep him relevant.

[michael vassar]

You know Half, blogs can only be made to work if the people running them are willing to throw out the trolls.

[Dan Morgan]

... wait - I thought only liberals were smart?

This is interesting that IQ makes people more libertarian. If this true then we should see China move farther away from state control over citizens. So that is good news.

cpurick does raise one good question: What is right-wing economics? All I can think of is support for state subsidies and undeserved protections of businesses. For example farm subsidies and protection of the steel industry. But aren't these also left-wing economics?

[michael vassar]

More than anything else, right wing economics is the assumption that
a) wealth should be distributed according to desert
and
b) that is pretty much the way that things are in our current society

Left wing economics is the disbelief in a or b, or the idea that wealth should be distributed to maximize Utility

Right Libertarian economics is the belief that it doesn't matter. Wealth should be distributed to maximize wealth.

Left Libertarian economics is the belief that while maximizing utility would be optimal in some sense, governments will never do it so the best we can hope for is limited government.

[Dan Morgan]

Michael,

I would not equate Right Libertarian economics with right-wing economics. The term right-wing to me tends to downplay any libertarian influence.

It seems to me that Right Libertarian economics and Left Libertarian economics may not be so different in practice. Most people are for public funding of K-12 education, unemployment insurance, government disaster relief, and medical aid to the poor. So these items can be claimed to align with both Right Libertarian and Left Libertarian economics.

If instead someone supports guaranteed incomes for all, living wage laws, large business subsidies to create jobs, and regular increases to anti-poverty spending - it seems these people would be better classified as liberals, not left libertarians.

[cpurick]

I don't think any of those are economics at all. They sound more like politics. What's more, they sound suspiciously "contrived."

As does much of the content around here.

[Douglas Knight]

Dan Morgan: I think michael vassar described four kinds of economics, distinguishing right and right-libertarian.

[cpurick]

Those are not forms of economics, they're forms of politics. They're the economic strategies of their respective political camps.

Of course, in that context you can still use Paul Krugman, who's not really an economist, but rather a political idealogue.

[The Superfluous Man]

Mr. Morgan, as regards the Chinese, their brains at time function differently than English speakers (http://www.futurepundit.com/archives/003550.html), suggesting that the Chinese and their kin may view the world differently from their say, White counterparts, even after adjusting for IQ and such. I'm outlining a possibility here, as the evidence for more is currently lacking. The same may be true in comparing say, Anglo-Saxons and Germans, or Frenchmen and Italians, although I'd suspect the disparity there is quite a bit smaller.

[Some Random Dude]

Educational attainment predicts income and the Wordsum score barely has any effect

Perhaps that is due to employers using education attainment as a proxy for intelligence because they are essentially forbidden to use actual intelligence tests.

[Dan Morgan]

The Superfluous Man,

It may be that Chinese brains are wired differently, but Hong Kong, Japan, Taiwan, and South Korea have all shown that freedom is valued by Asians in general.

[The Superfluous Man]

Hong Kong was run by the British until 1997. Luckily, it had Sir John Cowperthwaite (http://en.wikipedia.org/wiki/John_Cowperthwaite) running it initially, who set its laissez faire course. (I was a bit irked actually by the press, specifically The Economist's, total silence on his recent death - few obituaries despite the magnitude of Hong Kong's success.) HK isn't quite a democracy yet, as it is without direct elections.

As for the others, their economic freedom is lacking compared to its Western counterparts(http://www.heritage.org/research/features/index/countries.cfm). Actually, the least democratic have the most freedom - HK and Singapore (which has elections, but it's basically one party rule). It's true of the entire world that democracies are often not the best vehicles for executing reform. It's a bit ironic that sometimes a government like China's or Singapore's can have its people's interest more at heart than America's. Better a benevolent dictator than a parliament of whores it seems sometimes.

[nobody]

TSM is correct. The so called democracy in place like Taiwan and Phillipines is a bit a joke. The population might have the right to vote, but their choice has not lead them to prosperity. Economically, both country has performed poorly compared to HK or Singapore.

If anything, it has worsen the old problem of corruption. Like in the US, Running for office requires money. So, politicians sells political favors to the highest bidder. In both countries, there are scandals with first family accepting money for favors. Democracy in those country has failed at the most fundamental level, that is to reduce corruption.