Bryan Caplan  

Where Eugenics Goes Wrong: The Implications of Comparative Advantage

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Gnomonomics... Folk Beliefs, Locke, and Marx...

Almost no one wants to be called a "eugenicist." It's a term of abuse. But if you go back to the origin of the term, it basically amounts to the following two claims:

Claim #1: One of the main causes - if not the main cause - of economic, cultural, and other forms of success is genetic.

Claim #2: Policy-makers can make their societies more successful by improving the quality of their societies' genes. For instance, the famous eugenicist Karl Pearson maintained that Britain should only admit immigrants who "raised the average":

What is definitely clear, however, is that our own Jewish boys do not form from the standpoint of intelligence a group markedly superior to our natives. But that is the sole condition under which we are prepared to admit that immigration should be allowed.

These days, there is massive empirical support for Claim #1. For primers, see here and here. The result is that people who fear Pearson-like policies engage in a lot of silly ad hominem attacks on defenders of Claim #1. And on the other hand, some defenders of Claim #1 are happy to follow in Pearson's footsteps by advocating policies inspired by Claim #2.

The problem, however, is that Claim #2 simply does not follow from Claim #1. Even if genetics explained ALL differences in success, many policies that raise average genetic quality would backfire. How? Let me begin with a thought experiment, then explain the general principle.

Suppose we have an isolated society in which everyone is a genius. Let's call them the Brains. Who takes out the garbage? A Brain, obviously. Who does the farming? Again, Brains.

Now what happens if the geniuses come into contact with a society where everyone is of average intelligence at best? Let's call them the Brawns. If the Brains allow the Brawns to join their society, the average genetic quality of the Brains' society plummets. But everyone is better off as a result! Now the Brains can specialize in jobs that require high intelligence, and the Brawns can take over the menial labor. Total production goes up.

This is an example of what economists call the Law of Comparative Advantage. Trade between two people or groups increases total production even if one person or group is worse at everything. Suppose, for example, that Brains can make 5 Computer Programs or 10 Bushels of Wheat per day, and Brawns can make .1 Computer Programs or 5 Bushels of Wheat per day.

Computer Programs Bushets of Wheat
Brains 5 10
Brawns .1 5

Brains and Brawns can still trade to mutual benefit: Just have one Brain switch from farming to programming (+5 Programs, -10 Bushels of Wheat), and three Brawns switch from programming to farming (-.3 Programs, +15 Bushels of Wheat), and total production rises by 4.7 Programs and 5 Bushels of Wheat.

My colleague David Levy and his co-author Sandra Peart have taken Karl Pearson to task for his laughable claims about the ability of Jewish immigrants. But the deeper lesson is that even if Pearson's judgment on this point were correct, his policy recommendation would be counter-productive on his own terms. Yes, admitting geniuses leads to greater achievement; but admitting non-geniuses achieves the same effect, by encouraging native citizens to switch to brainier work.

Of course, this doesn't mean that improving the quality of your societies' genes never leads to greater success. Holding the number of people constant, more quality leads to more results. But an increase in the number of non-geniuses, holding the number of geniuses constant, will also normally cause higher levels of achievement through specialization and trade.

Thus, there is no reason for opponents of Pearson-like policies to pretend that twin and adoption studies don't exist, or "don't prove anything." The Law of Comparative Advantage shows that even if some people really are more productive than others in every respect, they have something to offer each other.


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TRACKBACKS (3 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/434
The author at The Club for Growth Blog in a related article titled Eugenics and Comparative Advantage writes:
    I love this blog post by Bryan Caplan at EconLog. How can an island full of brainy people become more productive by admitting brawny people into their country, even though it lowers average intelligence? The law of comparative advantage explains... [Tracked on January 21, 2006 4:28 PM]
The author at Acton Institute PowerBlog in a related article titled Everyone is Valuable writes:
    An excellent post by Bryan Caplan at EconLog examines the intentions of eugenics against the actual effects of the implementation of such policies. His point? “Even if genetics explained ALL differences in success, many policies that raise average g [Tracked on January 23, 2006 10:00 AM]
The author at Mean Mr. Mustard 2.0 in a related article titled Econ 101 Doesn't Answer Every Question writes:
    I'm a fan of Econlog, the very useful blog from Arnold Kling and Bryan Caplan, but they're often very hit and miss, as Caplan here is in this strikingly obtuse post: Even if genetics explained ALL differences in success, many... [Tracked on February 15, 2006 6:21 PM]
COMMENTS (39 to date)
rakehell writes:

Your comparative advantage argument is sound, but I'd like to address claim one. Twin and adoption studies may be one thing, but these are intragenerational resemblances. Ask yourself this: if genetics is so important, what have Einstein's descendents done for us lately? Why aren't there more dynasties of talent? Sure there are many families comprised of highly talented people, but few non-political dynasties in history. I can only think of a couple of minor examples. Even the political dynasties typical have only one or two “greats” and a whole string of mediocrities.

Evolution is highly dynamic. Sexual reproduction is theorized to help us adapt to a constant onslaught of parasites and other factors. No two mates are going to be exactly the same, so with sexual reproduction, in each generation there will appear a new mix of traits and qualities.

T.R. Elliott writes:

Why do you keep pointing to The Nurture Assumption, which says that peers are more importnat that parents? What does that have to do with your point on genetic causes? It doesn't, as far as I can tell. In addition, why do you go from a report that doesn't support your thesis to the grandiose statement that it is "the main cause" with italiced "the" to impress that point on us?

Bruce Cleaver writes:

Rakehell has a point; I could only come up with the Bernoulli family as a sort of intellectual dynasty.

Regression to the mean? Perhaps the solution is that genius is random, but _talent_ is a lot more predictable.

nn writes:

The problem is political. Assume -- without loss of generality -- that the brawns will always be less productive than the brains and that their numbers are likely to be greater. Assume further that both sides are Pareto improved by trading together but that incomes of the two groups remain disparate with the brains averaging $50k per year and the brawns $25k. Then, given democracy, it does no good to tell the brawns that they would be earning $20k if kept out. ONCE in, they may agitate for redistributive policies which will raise their income further at the cost of the brains.

As with all such problems how do you make ex ante agreements with immigrants credible ex post?

You can support immigration while still acknowledging that such problems are real. (cf. Amy Chua's work on dominant minorities)

T.R. Elliott writes:

Success of an individual is the result of only two factors: effort and luck. That's it. Genes are luck. Much of environment is luck. Skills are a matter of genes and effort to improve those skills, combined with the environment conducive towards the development of those skills.

Hence it all comes down to effort and luck. Caplan seems obsessed with one form of luck: genes. There are so many others in a complex system such as exists in markets in particular and human society in general.

Jim Bim writes:

Luck. Maybe we're following the Teele Brown evolution, even if the Puppeteers aren't behind the scenes directing it. We're all kind of lucky to be here, I guess, although we might also say it demonstrates what a bunch of badasses we are, according to Neal Stephenson:

"Let's set the existence-of-God issue aside for a later volume, and just stipulate that in some way, self-replicating organisms came into existence on this planet and immediately began trying to get rid of each other, either by spamming their environments with rough copies of themselves, or by more direct means which hardly need to be belabored. Most of them failed, and their genetic legacy was erased from the universe forever, but a few found some way to survive and to propagate. After about three billion years of this sometimes zany, frequently tedious fugue of carnality and carnage, Godfrey Waterhouse IV was born, in Murdo, South Dakota, to Blanche, the wife of a Congregational preacher named Bunyan Waterhouse. Like every other creature on the face of the earth, Godfrey was, by birthright, a stupendous badass, albeit in the somewhat narrow technical sense that he could trace his ancestry back up a long line of slightly less highly evolved stupendous badasses to that first self-replicating gizmo--which, given the number and variety of its descendants, might justifiably be described as the most stupendous badass of all time. Everyone and everything that wasn't a stupendous badass was dead."

K writes:

Your example doesn't apply. Comparative advantage increases total production by suiting work to abilities. But the poorest producers still lower average output.

We need to respect and help the least able on moral grounds. But if we argue that they improve the economy we only fool ourselves.

T.R. Elliott writes:

K: The goofy thing about his argument: the "law" of comparative advantage has not been tested in the realm he applies it. Therefore it is pure speculation at best, or mistaken at worst--as you point out.

So perhaps others can fill me in: are erroneous blog posts as we frequently see here supposed to be furthering the progress of economics? Libertarianism? Or what? They're not, so I'm really curious what others think.

Steve Sailer writes:

The obvious mistake in this analogy is that there are no ethnic groups on earth where everybody is a Brain or a Brawn. If you take a relatively ethnically homogenous country like Finland, roughly 1/6th of the population is below 85 in IQ and 1/6th over 85. Unlike most other cognitive elites, however, the Brains among Finns don't believe they should further pauperize the Brawns among their countrymen by inviting in foreign Brawns to drive down their own Brawns' wages. The Japanese Brains are similarly patriotic. Instead, they try to mechanize and robotize unskilled jobs.

Not surprisingly, Finland and Japan don't have a lot of street rioting, unlike so many other countries, such as France, that have invited in lower average IQ foreigners to do the jobs that that "the natives just won't do" (at low wages).

Perhaps worse off are countries that invited in enough members of a higher IQ endogamous ethnic groups where the minority comes to dominate the economy. For example, in Indonesia the 3% of the population that is Chinese owned most of the economy. Periodically, the natives stage massive pogroms against the higher average IQ minority, as in Indonesia during the democratization of 1998, when the natives celebrated the downfall of the dictator by murdering and raping the old regime's Chinese cronies, and the new democracy expropriated $58 billion in Chinese holdings, setting the economy back by years.

In that kind of situation, which is common in southeast Asia, perhaps the best solution is the system of massive government preferences for the majority that has kept the peace in Malaysia for the last 35 years. Yet, libertarians might feel uncomfortable with that degree of government meddling in all aspects of life.

Steve Sailer writes:

Sorry, I meant to write:

"... roughly 1/6th of the population is below 85 in IQ and 1/6th over 115."

Jody writes:

K: Not true if you assume the freed up "brain" is reslotted into a job with at least average output ("brawn" being able to do the menial task that "brain" used to do equally or nearly as well).

Example: Assume that a society has 100 jobs, of value 1-100 so that the average value is 50.5 (thankyou Gauss). Assume that brawn shows up and takes job 1. Then if the displaced brain resettles in a job of value 50 (which is actually a little below average), then the total output is now 5101 with an average of 50.504950495 or a little increase.

As it's somewhat reasonable to assume that the brain will be reslotted into the average output, it works out as a total gain and an average gain.

The key assumption here is that there are some jobs, picking up the garbage as suggested in the post, for which there is a dramatic diminishing of returns with increasing ability - rather, it just takes time. For such a job, it's worthwhile to put in the lowest productive worker that gets the job done freeing. If, perhaps, a 150 IQ worker could get some sort of output gain over a 85 IQ worker with respect to picking up the garbage (to use the post's example), then the substitution of workers would require a slightly higher substitution.

Or for a bigger gain, assume that some brain, because of a need for more menial labor, has been held back from working in some job with productivity 101 (or higher) with the possibility of reshuffling between the other brains to fill the other vacancy once a brain is freed by the brawn. Then the new average is at least 51 instead of 50.5.

So the answer really depends on if the appearance of a brawn frees up a brain to do something at least as valuable as the output from the average brain.

Dog of Justice writes:

I will echo the other posters in pointing out that your comparative advantage argument does not work. However, a simple modification fixes it -- all that is necessary is absolute advantage in one specialty.

Jody writes:

DoJ: where's the absolute advantage in the examples I give? Or for that matter in Bryan's programs and bushels of wheat? (there's no new arrival in his example, but it still illustrates an example whereby absolute advantage is not required)

Dog of Justice writes:

DoJ: where's the absolute advantage in the examples I give? Or for that matter in Bryan's programs and bushels of wheat? (there's no new arrival in his example, but it still illustrates an example whereby absolute advantage is not required)

Think about how you would model genetic enhancement. Look at what happens to total production when it is implemented, compared with the lack of it.

And yes, as soon as you correctly look at absolute advantage, you no longer have an argument against genetic enhancement. You have an argument against uniformity. But not enhancement.

Jody writes:

Ok DoJ, maybe I'm slow so spell it out for me.

In my example where the brawn can only do job "1" approximately as well (though not necessarily as well) as the brain and necesarily worse than any brain in any other position, where is the absolute advantage being provided by the brawn?

Or in Bryan's example where the brains are better at both programming and farming, where is the absolute advantage of the brawn over the brain?

Dog of Justice writes:

Ok DoJ, maybe I'm slow so spell it out for me.

In my example where the brawn can only do job "1" approximately as well (though not necessarily as well) as the brain and necesarily worse than any brain in any other position, where is the absolute advantage being provided by the brawn?

Or in Bryan's example where the brains are better at both programming and farming, where is the absolute advantage of the brawn over the brain?

What you and Brian are saying has nothing to do with genetic enhancement.

What happens when the abilities of either the brawn or the brain are genetically enhanced? Total production goes up, compared with a lack of enhancement. That's really all there is to say about the matter.

Again, your arguments oppose uniformity, not enhancement.

Jody writes:

Well my bad DoJ. I took your echoing of other posters to refer to K and TR who were asserting tha comparative advantages don't work (or that Bryan's little matrix wasn't an example of comparative advantage).

Instead, your most recent post seems to be arguing that comparative advantage is great, but improving everyone is even better (or adding more brains has to be at least as good as adding more brawns if brains are absolutely better than brawns).

K writes:

Judy. You try to rebut a statement I didn't make. I said the comparative advantage example was not applicable to rejecting eugenics, not that comparative advantage didn't work.

Comparative advantage does work. But the subject was the effect of abilities on the economy - able people get more done, and the less able reduce the average output.

Suppose I accept your position. We now have an ecomony running as you state and the least productive have freed up the more productive.

Now...
...A pill is developed which boosts the abilities of the least able 50%. It does nothing for the (previously) above average. What is the result?

I hold the result is more production and economic growth. And more per person. And I think it is because the workers are more able.

I must respectfully disagree with Elliot: Comparative advantage has been observed and used within factories, in armies, within nations, and in international trade. And I suspect it has been observed among convict labor in prisions. No economic test is pure but I accept CA.

Dog of Justice writes:

K said everything I wanted to say. Sorry about not being clearer in my first post.

Robert Schwartz writes:

Karl Pearson was one of the inventors of statistics as a science. The correlation coefficient is sometimes called the Pearson's R. He also developed the chi-square test of statistical significance.

T.R. Elliott writes:

K: I am not arguing against comparative advantage. I am arguing against an application of it to an immigration problem. Can you point me to research indicating that CA can be used in a way such as proposed by Mr Caplan. What is it that these societies are trading? His example is pedagogical. There is no "smart" society and "dumb" society as he proposes in his pedagogical example derived apparenlty from his class curriculum.

Can you state the constraints under which CA operates and how those constraints apply to the problem in question?

James writes:

T.R. asks "Can you state the constraints under which CA operates and how those constraints apply to the problem in question?"

If you meant preconditions for CA to work, the parties to trade must face different opportunity costs for the possible outputs they may produce. CA only applies to Caplan's scenario if productive capacity differs between people for different types of goods.

Under what circumstances will CA not work or not be relevant?

K writes:

Elliot:

As so often happens in these discussions I did misread what you said. Your word "goofy" caught my eye and I interpreted the rest as a general rejection of CA. So we had no differences.

As to the rest. No, I can't cite research that would support Caplan. And since Caplan's table shows that the "brains" are more productive at everything, I don't see how it could work.

James said it well at 1:21am.

I don't disagree with Caplan. I merely discount his illustration. To me it does not fit the topic.

His last two paragraphs suit me fine. But above that he wrote:

"Yes, admitting geniuses leads to greater achievement; but admitting non-geniuses achieves the same effect, by encouraging native citizens to switch to brainier work."

The "effect" may be of the same kind but I doubt it would be to the same degree.

John S Bolton writes:

The real-life example of Zimbabwe suggests a problem with the theory, or its application to immigration. Shouldn't the heightening of specialization between such divergent groups have delivered such improvement that it would be inconceivable to tinker with the magic formula? Applying the concept to 'eugenic' immigration policies, how is it still comparative advantage if the two groups form one polity? In Zimbabwe the two groups coalesced politically, and the comparative advantage benefit could not survive that. Also, the test should be advantage to the citizenry of the country which is in danger of having its per capita production decline, from what it would otherwise have been.
Evaluating in terms of the global utility is not known to be a proper guide for those who make the decision for their own jurisdiction.

John S Bolton writes:

Comparative advantage is not valid as an absolute universal, if applied as broadly as above. No ivy league schools would exist, if such an advantage were that universalizable. There would be maximal dispersal of whoever had such relevant advantages. Iinstead, we see a brain drain from the third world; likely to the disadvantage of median incomes there. A similar process occurs even more efficiently within countries, as if the dispersal one would expect on such broadly conceived comparative advantage considerations, were very negative economically.
Each increment of dispersal, should match up more brains to brawns.
Does belief in comparative advantage require us to admit products of hyperexploitative child labor; allowing even countries to specialize in breeding serfs for the aggrandizement of our leisure, or that of their fathers?

J Klein writes:

The issue is very badly presented. It presumes that the only variable is intelligence, and that otherwise, high IQ and low IQ people are interchangeable. Which is not true.

There are other important variables. Take for example, laziness. Chinese, independently of IQ, tend to be hardworking. Andamanese, on the other hand, are happy, goodlooking, attractive people, but no one ever succeeded in extract an hour of honest work from them. In Holstein, the post office will send you a refund for excess postage in a letter, and the police will mail you the gold ring you forgot in their jail, but in Bucaramanga it is unwise to stop with the car´s window open when you are using a watch. Independently of IQ, in South France, young males of Bugandese ancestry are at very high risk of being jailed.

Once I had a Kurdish Jewish worker, the apotheosis of dumbness. When we were making lists for reducing our personnel, he told me: Remember that in a caravan you need more mule than leaders.

He was right. Decent hardworking mules are indispensable, but high IQ criminals are dispensable.

Meena writes:

Your argument can be rephrased

1. The more diversity (including diversity of intelligence), the greater the benefits of exchange.
2. Some exchange cannot be achieved by trade, so more immigration will make all of us better of (so maybe using cutting hair instead of producing wheat as an example of a "brawn task" would made your point more forceful).

CS writes:

Three caveats:

1. A society may have a finite ability to absorb new immigrants (in terms of social and political cohesion, increased land prices, etc) so that it must choose between high- and low-ability immigrants. In that case it should select high-ability workers with an absolute advantage over low-ability ones.
2. The model of comparative advantage assumes all trades are voluntary. However, in reality, individuals can expropriate others, either through direct crime, use of welfare state programs or otherwise. If these costs are sufficiently high relative to the productivity of the immigrants, their arrival may be a net negative for current citizens.
3. On a related note, importing low-ability persons may lower the quality of public policy, potentially creating enormous costs. Your own work indicates that higher IQ and education reduce the gap between laymen and economists on policy.

OzzyOsborne writes:

As with many libertarian economic arguments, Bryan's point makes sense in theory but not in practice, because a country is more than just an economy. Factor in extra social services, societal problems, etc. caused by low-IQ immigrants, and there go all the financial benefits of your extra efficiency out the window. Just ask anyone who lives in Southern California.

Steve Sailer writes:

Dear Bryan:

When selecting applicants for graduates students in Economics at GMU, do you advise accepting below 85 individuals because of the magic of Comparative Advantage?

James writes:

Bolton,

The brain drain you refer to exists because of, not in spite of, comparative advantage. Americans face a higher opportunity cost of seeking higher education than do people in poorer countries.

Comparative advantage is not a normative theory so it doesn't directly lead to any conclusion about child labor or serfs. However, forcing people to work in some industry generally means preventing them from working in some other industry where their opportunity costs would be lowest. So the principle of CA does imply that forced labor is not the way to go if the goal is maximizing output.

James writes:

Sailer,

If Bryan did as your question suggested, that would indicate he didn't even understand the principle of comparative advantage.

Lord writes:

Some exchange cannot be achieved by trade, so more immigration will make all of us better of

This is the weakness of the argument. There is a wide variety of measures that would worsen even if some individuals benefit. Too much is not captured by economics to conclude a net benefit.

John S Bolton writes:

Even if comparative advantage is restricted to the case where all trades are voluntary, an assumption with no referents in the world, there is still the case of minors whose trades are not to be assumed to be voluntary. If we allow immigration from the populations which come to specialize in breeding involuntary laborers, this will multiply the bad practice, and bring the standards of the world and the country of immigration down from what they would otherwise have been. If we want to breed freedom, it will be dysgenic as well.

J Klein writes:

Boys, you love this debate so much that no one cares about sticking to reality as is. I presume you enjoy discussing the low IQ people the same way that my wife and her friends enjoys debating the servant problem. It makes you feel superior.

What I am trying to say that low IQ is not an isolated parameter but one aspect of o defectuous person. Statistically speaking, low IQ comes associated with bad teeth, asymmetrical face, bad health, low stature, criminal tendencies, inability to hold a job, faulty spelling, morbid obesity, AIDS, accidents, sartorial dissonance and many other more or less indesirable qualities and conditions. I am only half joking.

ed writes:

This is an interesting argument, but I don't think it addresses some of the main arguments used against immigration.

I think you are right that importing a bunch of "brawns" helps both the imported brawns and the native "brains." But it should also hurt the native brawns. So not "everyone" is better off. And the native brawns that might get hurt might be your neighbor or even your child, so a native "brain" might still oppose the deal.

Dog of Justice writes:

Maybe my memory is faulty, but it looks like Bryan has fixed an awful lot of errors in his original blog entry. Good job, everyone.

The headline is still misleading, but I can live with that.

John S Bolton writes:

More brawns added onto constant #brains, will 'normally' cause increase of achievement? The norm in the world is for net public subsidy to the poor, and this increases as per capita production increases. Increase in aggression on the net taxpayer causes diseconomies; disincentives multiply as basic needs force their way to the forefront. How do you tell a subpopulation that they are the brawns who gain by thus specializing, and ought to know better than to ask for public education provision? The only practical solution found so far, is not to let such specialists swarm in on an exploitable polity.
Mobility can be expected, for each increment of its enhancement, to select more efficiently for those who rely on net public subsidy, and who carve out new space for their own, by being more efficient at driving all others out locally.

droid writes:

Several points:
1. As Elliot noted your references in support of Claim#1 are off the mark. I suggest using the work of Lynn and Vanhannen in IQ and the Wealth of Nations if that is not too politically incorrect. Much more needs to be known about whether it's only average IQ that matters or other parameters.
2. Jody is right that CA requires that the opportunity cost to the brains be high enough.
3. All of the others that have points about real world complications and effects over time of increasing vs decreasing average IQ and it's correlates (including "sartorial dissonance") also have valid points.
4. I think that sociobiology trumps economics a la Sailer (who I think is almost always right).

In sum the discussion has been a credit to all.

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