The Uncomfortable Truth Behind Economic Inequality | Glenn Loury | EP 245

I had this client who was a mathematical genius clinical client. He taught me a lot of things I didn't know I hadn't learned as a statistician. One of the things he talked to me about was the Pareto principle. So I went and looked into that in some depth, and I found, for example, that it's such a strange phenomenon. It's like the square root of the number of people operating in a specific discipline produce half the output. That's the law.

So, there's a thousand scientists working on a particular sub-discipline in a discipline; 30 of them publish half the papers. You can look across; it's the same with basketball hoops successfully managed, hockey goals scored, soccer goals scored, records produced, books written, books sold, records sold. It's like everywhere this law, this weird square root law. Sometimes people sum that up as the 80-20 principle, but it's way worse than that.

Hello everybody! I'm pleased today to have as my guest Professor Glenn C. Lowry, Merton P. Stoltz Professor of Economics at Brown University. He holds a BA in mathematics from Northwestern and a PhD in economics from MIT. He's published widely as an economic theorist and researcher, has lectured throughout the world, and is one of America's leading analysts of racial inequality.

He’s been elected a distinguished fellow of the American Economics Association, a member of the American Philosophical Society and of the U.S. Council on Foreign Relations, and is a fellow both of the Econometric Society and the American Academy of Arts and Sciences. His YouTube channel podcast, The Glenn Show, often co-hosted with Professor John McWhorter, a linguist at Columbia and a recent guest on my YouTube channel, has attracted an increasingly wide audience.

I'm hoping to talk with Professor Lowry about income distribution, the Pareto principle, his shifting political and religious beliefs, racial inequality, etc., as well as his public presence on YouTube and via podcast. Thank you very much for agreeing to speak with me today. I'm very much looking forward to this conversation.

Good to be with you, Jordan! I'm excited!

Great! So maybe we could start by—I’d like to get to know you a little bit. So how did it come about that you developed an academic career?

Well, I was a working-class kid in Chicago and got to a junior college. I married quite young. I dropped out of college. I found my way back to school at a junior community college in Chicago and had a math teacher, a calculus teacher, who saw that I was really, really good at differentiating and integrating. You know that I was good at these little mathematical puzzles. He said, "You're a smart kid."

It was 1970, it was right, you know, at the height of the Vietnam protests and the Black Power and all that. Northwestern University wanted to recruit Black kids from Chicago to come and study there, and I got recommended to their attention. I ended up with a full scholarship at Northwestern, where I discovered a serious quantitative study in mathematics and in economics.

I took graduate courses while an undergraduate at Northwestern in both math and econ and found myself at MIT as a graduate student in the early 1970s. I took a PhD there. Did you know that you had a mathematical bent before you were discovered, so to speak, at the community college?

I did! I was always good at math. I was doing slide rules and logarithms and stuff when I was in the sixth grade. I was teaching my fellow eighth graders from an algebra problem set book after class because it was just a hobby that I loved. I was always good at math, but I had not had the opportunity to get a really serious education until I got to Northwestern, and that’s when things took off for me.

And MIT, you know, it was the best, probably the best economics department in the world in the early 1970s, with students from all over who were quite outstanding scholars. I really found my niche—found my niche there. What I loved about it was formal modeling applied to social questions.

I liked math, but it was arid and abstract, and it was the early 1970s. One wanted to be working on social issues somehow, and economics was exactly right for me because I found that you could explore these questions with a kind of rigor and a kind of disciplined quantitative specification and, you know, deductive logic and applied mathematics—not deep, not really, really deep mathematics, but, you know, serious applied mathematics.

So it was a natural fit for me. You know, I liked—I took a clinical research degree, and I liked the science a lot, the research science, but I really liked the fact that my clinical practice enabled me to sort of nail that down to earth all the time. So that was a lovely balance as well and also sort of fed my interest in social issues more at the individual level than, say, the sociological level.

Where did you become convinced? I mean, you've got this mathematical bent, and you were trained, at least at the bachelor's level, in mathematics per se. How convinced are you that the application of mathematics to economic models produces results that are actually applicable to the real world?

Oh, well, that's a big one—applicable to the real world. I mean, I think what you're doing in formal economics—this is a big question early in the 20th century when people like Paul Samuelson, who was one of my teachers, were beginning to apply the kind of mathematics that you would see in theoretical physics on dynamical systems or, you know, that kind of applying.

It was basically differential and integral calculus and differential equations and so on, applied to classical problems in economics. A lot of people thought, "Well, that's kind of taking us away from the real world," and that’s a kind of counting angels on the head of a pin kind of abstract thing.

It's true that one can get lost in the abstraction, but I think there are deeper insights that can be generated through the application of mathematics that are closely connected to the real world. This is not empirical science; this is theoretical. But you kind of get to the bottom of it. I mean, I could give an example.

So the invisible hand theorem from Adam Smith, this is the late 18th century, as you know, is if you let people pursue profit, their own interest at prices that are commonly observed by everybody and they're in competition with one another, then the outcome is going to be socially efficient—it’s going to be Pareto efficient. You were talking about Pareto just a minute ago; it's going to be Pareto efficient.

Now that's kind of a deep insight. And what does it depend upon? I think that the 20th-century characterization of what we mean by competition, what we mean by price, has been common to all consumers, profit-seeking, and self-interested behavior on the part of consumers.

It kind of crystallizes exactly what you have to be assuming about the behavior of individuals about the institutional setting in order for confidence in the efficiency of capitalist enterprise to be justified. Now, it turns out that those conditions, and people like Kenneth Arrow—the late, great Kenneth Arrow, the economist who was at Stanford at the end of his career, and others formalized this at mid-20th century—those assumptions are fairly rigid, those assumptions are fairly demanding.

There's plenty of reason to believe that they may fail, and seeing what the consequences of the failure of those assumptions are is something that is facilitated by formalizing the problem. I could give other examples, in political theory. Kenneth Arrow again, he has a famous book called Social Choice and Individual Values, and in that book, he has a theorem that he has to employ rigorous mathematics to demonstrate.

But the theorem says that if you're looking for a mechanism that for just about any kind of society can aggregate individual preferences in a coherent and rational way in order to formulate a social decision rooted in those individual preferences—unless your rule is dictatorial, where you designate one person to be the decision-maker for everybody else—you will be looking in vain. It's an impossibility theorem.

There are no mechanisms—majority rule doesn't satisfy all the rationality requirements, et cetera, et cetera. To me, in some ways, it's enlightening and others. Let me see if I can rephrase that and question you a little bit about that.

So, when I think about these sorts of problems psychologically, in terms of how people are able to make decisions to act successfully in the world, I see that we're always contending with genuine uncertainty, and the future is, in some sense, actually unpredictable. None of us are smart enough to figure out exactly what's coming and what we should do. So I tend to view the free market as a giant computational device that does the best job we can of calculating what's valuable at any given point across the vast number of individuals we can possibly manage.

And it isn't exactly that I think that that works; it's that I think I can't see how anything else we could possibly do could work better. I'm not an economist, and I'm certainly not a mathematician. There might be all sorts of problems with that sort of line of theorizing, but I see it as distributed decision-making that’s, you know, a consequence, at least to some degree, of the maximum free choices among the individuals concerned.

Now, I know there's such a thing as market failures, et cetera, but am I way out?

You're in Friedrich von Hayek territory. I mean, you who makes this argument in a very classical way because information is diffuse in society, and the idea that a central bureau of government fiat could effectively manage all the different trade-offs and coordination problems and relative valuations and so forth—the computer’s not big enough to be able to do that.

Moreover, the information is not in one place; the information is in the hands of many, many different decision-makers. But the engine that makes that intuition of yours work is prices. It's the fact that people are seeing prices; the prices carry all the information they need about the relative merits of one or another course of action for themselves, already incorporating the kinds of calculations that a central decision-maker would find impossible to carry out.

So, I think the way you summarize the problem of the market being a mechanism for calculating very difficult allocation problems to the best effectiveness that's available to us—not perfect, to be sure—I think that's correct. And, yes, market failures are when that process goes wrong, and it's usually when the prices don't reflect all the different costs, as for example, in climate change.

Well, that's a problem of temporality to some degree, right? Because we can't compute costs across all possible time frames simultaneously. So when you're talking about something that might have a long-term cost, it's like, well, how long of a term cost can we expect to adapt to? If it's 150 years in the future, well, we're all dead, and it's very difficult for us to take such things into account.

Also, our prediction—our margin of error expands terribly as we move out into the future. So, okay, I want to reverse that for a second. This will have some bearing on our later discussion, maybe.

I kind of like the idea that the future is unpredictable per se and that you need distributed decision-making power. But I also spent a lot of time studying cognitive ability and personality. What researchers have concluded, essentially, is that if you study cognitive ability, which is something like the ability to manipulate abstractions at some rapid rate, you find that it collapses statistically into a single dimension, whereas personality collapses into five dimensions.

That's G, essentially, yes, and it's not much different. You can get a pretty rough approximation of G by taking any set of a hundred questions that require abstraction to solve and just averaging the score. It'll be correlated with G at like 0.7 or 0.8, which is a whopping correlation by social science standards.

And so, but anyways, you know, the thing about, let me ask you a question, but I'm not a psychologist. Here's my sort of statistically trained understanding of that, which is that while we may not be able to put our finger on any particular neural pathway or any particular biological process of going activity going on in the brain, nevertheless, we think that there is an ability or an aptitude that manifests itself in the solution to these abstract kinds of cognitive problems. We're going to call it G, and we're going to measure it by the confluence of a person's performance across a range of different kinds of tests.

There's some factor analysis, analytic kind of distraction? Yes exactly, and you're saying that no matter what the tests are, it all collapses down to this one—it doesn't matter what the tests are; you could take any set of 100 random questions that require abstraction to solve and you'll pull out something that will be correlated with G if you average the scores at about 0.7 or 0.8. It's remarkably unitary—it’s stunningly unitary!

When someone like Stephen J. Gould is—I recall him, yeah, he’s wrong! Okay, like, and here's why. You know, he took an issue with—well, he took issue with factor analysis. He said, "Well, that's not real." It's like, "Well, is the average real?"

Yeah, it depends what you mean by real. If it has a one-factor solution, it’s basically identical to the average. Not exactly, because all the questions aren't related to that average equally, but for, in the case of G, for all intents and purposes, it's indistinguishable from the average. Any random set of 100 questions will do. I looked into this deeply because we built personality models; my research team, and they'd be reasonably influential in the field of personality. So I understand that there are phenomena that are associated with human psychology; they don't have a uni-dimensional solution, but G, man, it's a killer; it's a black hole; it sucks all cognition into it, and there's no escaping it.

So it's very, now, and so why I brought that up—we will go back to that—but why I brought that up is because it's kind of weird to see that there is this cognitive ability that does allow for prediction of the future that is associated reasonably strongly statistically with long-term, say, life economic success, in some ways that flies in the face of the idea that a central authority can't model the future because we have a central authority.

And I can speak about it biologically for a second. So you move your body voluntarily with your motor cortex, and the prefrontal cortex grew out of that over an evolutionary time frame, and what the prefrontal cortex does is represent action in abstraction. So that you can assess well its mechanisms, but also its likely outcome before you implement it in action. And that seems to be—it's not a specifically human skill, but we've developed that far more than any other creature.

And so it seems to work because people with higher IQs tend to do better, say, economically. Well, they do better across a large variety of measures, so well, that's sort of that. But it does fly in the face of that need for distributed decision-making. I don't see that.

I don't see how it is that the ability to predict a person's, I don't know, income or whatever on the basis of their cognitive ability correlates or connects to the ability of someone sitting in an office somewhere to know how much, you know, farm material should be shipped here. And yeah, maybe it's a matter of complexity, you know? Maybe that's what—and diversity—and the fact that it's not a one-dimensional thing.

What we're after when we ask what people want, they have preferences that are complex, and I don’t know who is the person who wants a cool room or a warm room in the wintertime—they have to reveal that to me by the actions that they take. Something like that? Yeah, well, so maybe it's the case that the central IQ authorities, so to speak, have a bounded universe that’s basically private in which it can make reasonable predictions.

But once you scale the problem up to a certain degree of complexity, you have to switch to more distributed forms of cognition. That could easily be the case. Can I predict whose marriage is going to survive based on G? Not that I know of. You can predict whose marriage is going to survive to some degree based on trait neuroticism, which is the negative emotion dimension, and so higher levels of neuroticism increase the probability of divorce.

And that's part of the reason why most divorces are initiated by women. That's going to get you in trouble, Jordan! Yeah, whatever—I get in trouble all the time! But look, I mean, it’s not a sexist thing to say. I mean, there are reasons that women are more sensitive to negative emotion. They're smaller; the cost of sex is higher for them, and they have to be finely attuned to the dangers posed to infants.

It's an evolutionary—there's nothing wrong with the fact they have higher levels of negative emotion; it's costly for them as individuals to some degree because it's unpleasant and physiologically demanding. But it makes perfect sense given that the world's probably more dangerous for women, especially when they have infants. Everything you said makes a lot of sense to me; why is it so difficult to make statements such as the ones that you've made about the intrinsic or natural differences between men and women based on the very argument that you gave that there are good evolutionary reasons why.

Well, I can play devil's advocate for that. So, as a psychologist, I do see a technical reason in some sense for separating biological sex from the concept of gender. And the reason for that is that I think the best description of gender is probably in personality. Men and women's personality are more the same than they are different.

So the curves overlap more than they differ. The biggest differences are a negative emotion and compassion/politeness, which is agreeableness, and women are higher in both reliably. But there are no shortage of women who have a masculine temperament and no shortage of men who have a feminine temperament. They're in a minority, but the diversity is there.

When you say something like, "Well, on average, females differ in this way," it's hard for people who don’t think statistically to sort of separate that out from, "Well, that means everyone’s like that." Well, they're not; there’s tremendous individual variability. Five dimensions of variability is a lot of variability. There is more similarity between men and women than there are differences. The biggest difference is in interest, actually.

And this is kind of interesting for someone mathematically minded because there isn't much evidence that women and men differ in mathematical ability at a cognitive level. Maybe boys have a slight edge in spatial reasoning, and that might be linked to testosterone, and I think that’s probably true—but it’s slight. But they have a whopping difference in interest, and women are reliably more interested in people, and men are reliably more interested in things compared to the other sex.

I read Charles Murray's book Human Diversity, and the section of that book on gender is etched very powerfully into my mind. I thought he made many strong arguments there. And around this point about differences in interest, of course, that causes people to invest in different kinds of behavior, and that leads to differentiation in their occupational profiles.

And it’s especially true at the extremes because, you know, even if the curves overlap to a large degree in the middle so that most men and women are roughly the same, if the great mathematicians, let’s say, are one percent of the population—which is probably an overestimate—then they're almost all going to be men, despite that huge overlap and despite the lack of cognitive difference.

I’ve been a chess player; I’m just going to say all my life, and the dominance of men among world-class chess players is very, very prominent. I mean, they basically are very few women who play at the top rank of chess players.

Yeah! Well, you have to kind of be obsessed with something like chess to get that far, right? I mean, it's a real specialization at that level, and so if you're not compelled by your interest, you won't do it despite your ability.

So, a relatively small difference in ability at the right tail of the distribution and spatial cognition, for example, might lead to a very large difference in the number of hours people allocate to developing their chess-playing skills, and then that would account for the gender difference.

And you also see this.

I got in trouble for this a lot, but it's true, so that's life. In the Scandinavian countries, it's proved very difficult to get women into engineering and men into nursing. As those countries have become more gender-equal in their legislation and their social policies, and likely their society, those differences have gotten bigger, not smaller.

It's stunning! It's just—underwater! I wonder what you would say to this argument, which is, "Okay, maybe you guys have a point, but the main political imperative is equality for men and women." That's a political imperative, and that means that we have to sustain majorities in favor of the kinds of laws and regulations we need to achieve that.

When you talk candidly and casually—as Lawrence Summers did when he was president of Harvard University. I'm sure you know the incident.

Oh, yes! About women and why there aren't so many at the top of mathematics and the STEM disciplines. When you talk casually about that, you give aid and comfort to the forces that want to resist equality, and you kind of feed or fuel something that needs to be opposed—not encouraged.

So you ought to censor yourself a little bit; have some modesty in the way in which you talk about these issues because the stakes are very high. Something like that? Do you find that?

Yeah, well, I’d agree with that. But, you know, the way I deal with that is I don’t speak casually about such things. I did my research on these topics. This is years of research, and I was dead serious about it. Partly because we built practical tools to assess personality and cognitive ability, as well as I studied it as a researcher and, you know, as an interested clinician.

None of this is casual, and no, I don’t think that censoring myself is the right idea because I think to really say—if we wanted to eliminate those gender differences in occupation, the intensity of government intervention that would be required would tilt things towards something that's too much—too totalitarian. You'd have to interfere with people so much to accomplish that.

It's a one standard deviation at least difference in interest between men and women and people and things, and then if you do foster social equality like the Scandinavians have clearly done that by any reasonable measure and the fact that those differences get bigger—it’s like you just can't walk away from that. It’s not what anyone expected on the left or the right. No one expected that.

And what seems to happen is if you give men and women every opportunity, in some ways they get much more different. And, you know, hey, we didn’t expect that, but that’s science, isn't it?

Very frequently, things that you don't expect happen!

So, okay, well, you persuade me on that one.

Well, it's not easy to see how you could set up government policies that would violate people's intrinsic interests. And one of the things you do learn as a personality researcher is that those interests are deep; they’re biologically rooted in many ways.

So if you're an open person, that’s a creativity dimension that’s deep, deeply rooted inside of you. It's a fundamental element of who you are and can’t be easily trifled with—or safely trifled with—by, well, let's say, by political interests.

And I really saw that as a clinician because I’d have people who were creative as clients. If they weren’t doing creative work, they could hardly stand to be alive. Well, this is a theme that might apply across a number of areas, the theme being a pursuit of a faux egalitarianism—an equality in a place where the natural order of things would not have equality be expected.

But the ideology of egalitarianism is set against the objective reality of the difference that we're talking about. And people want to make equal; in any case, we want to force engineering departments to recruit women so that they have a 50-50 balance or whatever it might be. We want to subsidize or tax or discourage and encourage people's behavior to bring about this equal outcome.

Well, you know, as a heuristic, you might say that if you look at an outcome and you see gender differences or ethnic differences or racial differences, sometimes you can reliably infer barriers and prejudice, and so as a heuristic, it's not bad, right?

Because that points to a place where there might be a problem. But then we do have some areas where we have high-resolution knowledge, like let's say with regard to interest in people versus things, and so then we can say, "Well, wait a sec. That difference doesn't look like it's a consequence of arbitrary prejudice."

But I think—I don't like—well, look; one of the things I was interested in talking to you about—you’ve written a fair bit about racial differences in incarceration in the United States, and you've made a case—and I don't want to put words in your mouth, but I'm trying to sum up what I understand—that the fact of those differential incarceration rates not only has a variety of negative medium and long-term consequences for everyone but that it does point to a kind of systemic problem that's fundamentally discriminatory.

And to some degree, that's the use of that heuristic, I would say, and in perhaps an entirely appropriate way it's complicated. But am I have I got your argument reasonably?

I wouldn't have said—or I wouldn't say today, in any case—fundamentally discriminatory without unpacking that. Yeah, I would say that the disparity—uh, here you have the state that deprives people of liberty. It's a very massive footprint, incarceration in the United States, and there's a huge racial disparity in it.

There's also a racial disparity in criminal offending. I would make the case that even if you could account for every single person incarcerated by reference to, "Well, they broke the law. They did the crime. They're doing the time."

Even if you could account roughly that the African-American over-representation in prison is commensurate with their over-representation amongst criminal offenders, still the fact that this is the state coming down with a hammer on people and confining them and depriving them of their liberty at the scale that it’s engaged in—given the history of our society where racial difference is such a fraught and sensitive matter—given the existence of stereotypes in the minds of people that are buttressed by the over-representation of African-Americans in prison, given the political alienation in the communities from which the prisoners are coming and all that, that can be loaded onto that in terms of a lack of an understanding of legitimacy to the forces of order in the society—given the history which is, you know, a history that is marred by racial—etc., etc.—that it would be a bad thing for that disparity to persist.

And it’s an outcome that government ought to work to counteract—not because they think it's mainly a consequence of discrimination—at least ongoing contemporary discrimination—but because the ultimate stability of our social order depends upon not allowing that to fester unattended. Right?

I've said, "I've said a million cases each one rightly decided can still add up to a great and historic wrong." And that's the sense in which I lamented—this is years ago. I don't write so much about it anymore.

But in any case, I lamented the racial disparity in incarceration. I thought it was bad for our society, even if it reflected mainly disparity in criminal offending, because, of course, criminal offending doesn't fall from the sky either. It's a consequence of social structure and social organization to some degree, as well as the personality and moral characteristics of different individuals in society.

But yeah, I was concerned about mass incarceration primarily because I thought it made solving the American dilemma all that much more difficult to accomplish.

Yeah, well, you also wrote to some degree about its effect on disrupting families, you know, on an ongoing and continuing basis. And, you know, I've spent a fair bit of time trying to wrestle with the potential role that fathers play in families in relationship, let’s say, to the disciplinary structures that are applied both to young men and young women.

And it certainly seems to me that these differential incarceration rates are tremendously destabilizing for the fundamental family structure among...

What? And when you've looked at that, let me ask you two questions: do you—all right, do what do you think the data show about the severity of sentencing for Blacks versus whites in the U.S. for crimes of the same magnitude?

And I know that's not bottom-level data, but how do you see that? Because you talked about criminal offending.

Yeah, now you can find studies where they are—they're going to see some modestly more severe punishment conditional on the crime for Black offenders. But my general sense of the matter—and I rest here on my service on a committee of the National Academy of Sciences that reported maybe seven or eight years ago, "Causes and Consequences of High Rates of Incarceration in the United States." My understanding of that literature from people like—he's up in years now, but he's been very influential, Alfred Blumstein; he's a statistical criminologist at Carnegie Mellon University. He's kind of the godfather of these studies—there are many other studies.

My understanding is that you cannot account for more than 15-20 percent of the racial disparity in people in prison by reference to differences in the length of sentence or the likelihood of being convicted and sentenced conditional on offense.

Okay, so...

That's great! Nothing—great, no, it's not nothing; it’s not nothing. But the great bulk of the disparity is differences in offending. The difference in sentencing conditional on the fence maybe differs by race disfavoring Blacks.

Now, in the drug area, that's a specific thing where it’s observed that drug use patterns don't differ nearly as much by race as drug incarceration patterns do. But I explain that in my mind by reference to the fact that open-air drug markets are going to attract on the selling side people from—you know who don’t have many positive alternative opportunities to use their time.

It's a low-paying and very dangerous trade. It's no surprise that I have to go to the wrong side of the tracks in order to engage in a prohibited commerce than the people who’re going to be engaged in that commerce will be disproportionately from disadvantaged communities.

So, do you—I talked to some psychologists for a fair bit of time. It was Margo Wilson and unfortunately I can't remember the name of her—her Martin Daley, Margo Wilson and Martin Daley. They’ve done interesting work looking at the relationship between economic inequality and crime.

What they've showed state by state and country by country is that—and county by county in the U.S. is that the higher the rates of inequality, economic inequality in a given geographical locale, the higher the rates of aggression and criminality.

What they—and they studied Chicago, the inner city of Chicago specifically in relationship to this research. Their hypothesis was that young men—it's very important for the sexual success of young men to be on an upward path in relationship to status.

In places with high inequality, that’s an indication that their upward mobility is truncated in various ways, and as a consequence, they're highly likely to turn to violence and criminality as an alternative means of obtaining status.

And that's part of what's driving the sorts of things that you're describing, and they're—look, they show very high correlations between income inequality county by county and rates of male aggression—especially among young men. And, like, the correlations are 0.6, 0.7; unbelievably high for social science.

So, well that’s interesting; that’s news to me. But that’s a seeking status, and when you can't do it by high income, then you do it by hooker; by crook because it's so fundamentally important, especially for young men because—for there's this other gender difference.

They're competing for the services of young women—is that—is that yeah? Status as a marker for competence, way more than young men do. So young women are much choosier as sexual partners for obvious reasons.

This cost of sex is a lot higher for them, and what they are looking for is something like competence in climbing social ladders, and then they use social status as a marker for that.

And so that question—if there are these deep psychological, social psychological dynamics at work, how much influence can culture, you know, play in affecting people's behavior?

Can we change the script or are we locked in—are we locked in by these kind of very deep imperatives of the sort that you would just—?

I would say that we're constrained but within that constraint there's no shortage of room for choice. You know, it's sort of like chess; there’s rules, but man, there's a lot of ways to affect the chess game. These more biological factors are more like—they’re more like game rules and it doesn’t—in some real sense doesn’t decrease the range of choice; it shapes the game.

And then socially, well status is going to be more important as a marker for male desirability than for female desirability. We're not going to change that, but what we can do is restructure social systems so that non-violent means of obtaining status are available as much as possible to everyone.

And that’s sort of the equality of opportunity argument, except maybe from a biological perspective. And it's also the inequality issue that’s also extremely interesting, as far as I'm concerned, because what their work suggests—and it’s pretty damn solid, I believe that—inequal economic inequality as such poses a destabilizing threat to societies as such.

And the reason for that is that it promotes young male violence, particularly. And so whether you're on the left or the right, it's like inequality is a problem. If it gets too extreme, things get violent. So, adolescent for conservatives as well as people on the left.

So, okay, but inequality is inevitable, is it not? Well, that’s another thing I wanted to talk to you about.

Well, let's talk about that. And because I had this client who was a mathematical genius clinical client. He taught me a lot of things I didn't know I hadn't learned as a statistician.

One of the things he talked to me about was the Pareto principle, and so I went and looked into that in some depth, and so I found for example that it’s such a strange phenomenon. It's like the square root of the number of people operating in a specific discipline produce half the output—that’s the law.

So there's a thousand scientists working on a particular in a sub-discipline in a discipline; 30 of them publish half the papers. And you can look across; it's the same with basketball hoops successfully managed, hockey goals scored, soccer goals scored, records produced, books written, books sold, records sold. It's like everywhere this law, this weird square root law.

Sometimes people sum that up as the 80-20 principle, but it's way worse. Yeah, it's way worse than that.

Well, it implies, for example, if you have an organization with ten thousand people, a hundred of them doing half the work. You know, if you have ten, it's three, and that’s not so bad. But at ten thousand, it’s a hundred, and you think, "No way." It's like, well, if you meet some of those people who might be in that hundred, you might think differently.

So, and this looks like some fundamental rule. And so you're interested in income distribution, and so what do you make of this sort of thing?

Well, it reminds me of a classic paper by the late economist Sherwin Rosen at the University of Chicago called "The Economics of Superstars," and he starts it out by observing 80-20 like observations by, you know, let's look at the earnings of tennis players and look at the rank. So how much total prize money is won by tennis players and what proportion of it goes to people based on the rank?

He gets something like an 80—you know, the top 20 or 25 tennis players have taken in the vast majority of the winnings, and it’s, you know, record sales by musicians in various genres of musical production and whatnot, similarly, the top ones are getting most. So he says, "How can we account for this?"

And this, I think, should be a part of anybody's effort to explain the Pareto principle, as you've defined it or the 80-20 rule. He says, "Look, to produce something that people want to see, you need talent, but you also need other resources."

And so it's the combination of the productivity of the talent which is scarce and distributed in the population and the effectiveness of their ability to command other resources which taken together determine what they will be able to produce.

All right, so you need a combination. So imagine one distribution would be talent. And so you need to be in, say, the top ten percent, but that’s not enough. You also need, I don’t know, you need to be in the top ten percent of education, say, to be a successful researcher or scientist.

And the juxtaposition of those two curves produces a real fractional percentage, and those people are hyper-qualified for that particular enterprise. It’s something like that. He adds another element, which is—let's take opera singers. He uses this example.

So in the old days, before you had high-quality sound reproduction such that you could sit in your living room and listen to a recording of an opera singer through your speakers that produced an effect that was almost as good as being in the opera house—before that, you had to actually go to the opera house to hear an opera.

Now, the opera house can only accommodate a couple of thousand people max. So the very, very, very best opera singers could still only command an audience of a couple of hundred—a hundred thousand people in any given performance, which leaves plenty of room for the second, third, fifth, and thirtieth best to be able to travel to the small towns and still make a living.

But once it becomes possible for the best to record their performance and to distribute it in that way, the person sitting in the small town has a choice—do I go to hear a 20th-rate opera singer in the local hall or do I put a recording of the best one on my device? Now, often, they would choose to go with the recording rather than go to the 20th best.

And that means that the top opera singers are now going to command an even greater share of the market, and the insight there is that technological change, which permits the most talented to lever their talent to a larger audience, is the key to understanding why they get so much of the take. Completely right.

Well, you can—it’s like the smaller the game, the less the gain at the top, but we expand the games continually with technology, and recording is an excellent example of that.

And so I guess what we hope is that we produce enough new games so that everybody can win at something, but we're still funneling a tremendous number of resources to people at the top of whatever the game is, especially as these games become big.

So, yeah, and you see that particular—well, it's really obvious with money. People complain continually about the top one percent, but the problem is that there’s a book called Big Science, Little Science that was written in about 1962, and the author escapes me at the moment, but he did exactly the same sort of analysis for the scientific literature.

It's exactly the same story! So hyper dominance of a tiny minority of people, and so there's a natural... It's something like positive feedback loops too, isn't it?

Because—and I've noticed this as I've become more famous, I suppose—is that you get known, and so more people know you, and so more people are likely to attend to you, and then more people are willing to talk to you because you have an audience.

And so that drives the expansion of the audience, and your connection network grows at the same time, and you have more resources. So it’s just—it's a bunch of positive feedback loops moving upward.

I think the word network is very important there, and I think that—for with social media and whatnot—and the magnifying the ability of individuals to have influence and to have influence on people who have influence—the density of that network is a tremendous asset.

For, you know, yeah, so it makes its competitive position—well, it makes the problem of inequality a real tough one from the political perspective, right? Because we could—and conceptual, for that matter—because we could perhaps agree that regardless of whether you're on the left or the right, you might view inequality on the right as a threat to social stability.

So I know there's this Native Canadian tribe on the west coast, Haida. The Quack Quackwacks did the same thing; you know, in their societies, they’d have big chiefs, and the big chiefs would just accrue everything, and then now and then they’d have a potlatch and give it all away.

And then their status was dependent on their ability to give a lot away, and that stabilized their society. Now those were made illegal by the Canadian government, I think about 70 years ago or so, but, you know, they were thought of as just some pagan—an unnecessary pagan ritual, I suppose.

But I do believe that that was one of their so-called evolved solutions to the terrible problem of inequality. The fact that, you know, goods tend to accrue in the hands of a few and, the lefties that I see, the left political thinkers, economic thinkers as well, especially the ones on the extreme left, they tend to associate that with capitalism.

But that’s a fundamental underestimate of the magnitude of the problem in my thinking, and that's a really problem if you're concerned about comparatively poor or actually poor people. It's a way bigger problem!

I wonder if we could apply the same kind of thinking that we use to explain why an athlete or a musician or even an entrepreneur might end up at the very right end of the distribution garnering for themselves a great bulk of the reward to apply that to the huge financial fortunes that are accumulated either through savvy in the marketplace.

You know, I’m a hedge fund guy; I know what to buy and when, and when to sell, or to the fortunes of landholding, you know, family fortunes and things of this kind—
well, I think they do to some degree. I mean, I studied entrepreneurial success as a researcher for quite a long time too because one of the personality factors that predict entrepreneurial ability is this trait openness, which is essentially creativity.

And what defines creative thinkers in part is—so here’s a simple creativity test, and it actually is reasonably predictive of creative capacity both in terms of originality of thought and creative productions as assessed by experts: how many uses can you think of for a brick in three minutes? You’re going to write them down.

Or even how many four-letter words can you think of in a minute that start with C? That'll be correlated at about point three or four with your creativity, depending on how it's measured—very simple test. What seems to happen is that creative people, when they think of one idea, the probability that that will trigger an associated idea is higher, especially a distally associated idea.

So that likely means that creative people have more erroneous ideas as well, and then they have to, you know, what would you say, edit them and select. But one of the things that makes creative entrepreneurs successful is that they produce a large variety of creative products, and then they throw them out in the marketplace, and most of them fail; but you just need one to hit that Pareto point, and then you're successful.

So you throw—you know, you throw some—what do you do? You throw a mess at the wall and see what sticks, essentially. Most entrepreneurs, before they're successful, have had a very large number of failures because even if you're intelligent and creative, the probability that you'll build a product that’s actually timed for the market is extremely low.

So, well, what do you do? Well, you create more, and that's what happens—that's what creative people are essentially biologically predisposed to do. So I think that, yeah, I think that principle—that underlying principle of positive feedback loops and, you know, the combination of scarcity of ability and resources, I think it accounts for all those inequalities.

So, you know, the question is, what do we do about that? Well, you were saying something I thought interesting a moment ago about how even a right winger ought to be able to see that inequality unrestrained could be dangerous to the stable social order because the losers are going to end up having to say one way or the other at the end of the day, and you better watch out.

Because if they don't have a stake in the system, and they’re feeling aggrieved and without status and dignity, they may act out in ways that are hard—oh, they will! Especially if they’re young men! Absolutely, they will! They absolutely will! And that is definitely dangerous.

And so, you know, partly we’ve tried to solve that, so to speak, we in the West by trying to ensure something like equality of opportunity across a wide range of games. That’s not a bad sort of meta-solution, right? It's like, well, we can’t predict; we know that there are going to be wild disparities in outcome and we can’t really do anything about that, but maybe we can give people something approximating an equal shot at winning some game, and that would be better for everyone too because then we can harness their creative resources.

And it isn’t obvious to me that there is a better—I technically even can't see—I don't understand, I don't know what a better solution could be. Now, what does that mean in a world where the people who have engineering degrees or gotta got to law school or got a good, you know, education and are connected are making six figures and living comfortably, and someone who dropped out of high school is working for thirty thousand dollars a year and just barely getting by?

What is that ladder guy's venue where he or she can feel like they're winning the game? Well, I think it depends to some degree on each individual, you know? I mean, you can find status and meaning in your family; you have your pursuits outside of your work.

I'm not saying that money isn’t a good singular marker of relative status—it’s probably the best singular marker there is—but it’s not the only one, right? There are diverse places where you can attain status.

By the same token, you know, you can be poor and dignified. You’ve certainly met people like that, you know? You can be poor and admired within your family; you can be poor and have decent or outstanding character, for that matter.

And so—and that’s not exactly a domain that’s regulated socially like the economic domain, but it's not nothing. And so, and by the same token, you know, you can sacrifice a lot of those things to economic pursuit, and then you’ll have lots of money, but man, your life sucks in 50 different ways.

So I don't know if that's a sufficient solution, but it's not nothing. But this is not counseling laissez-faire, if I understand it. It's not saying the government should just withdraw and let the chips fall; it’s a kind of—Apollo advocating for a policy of some kind of, you know, everybody needs work that’s meaningful.

You know, everybody needs a kind of sense of security, you know, that they're not going to get sick and not be able to pay the bill. They're not going to get old and not know where the next meal is coming from.

Let’s guarantee—let's try to guarantee to the extent that we can—we know the world's not just perfect, and we may not be able to solve all these problems. Let’s try to make sure that there's decent housing for someone—that they're not so they don’t have to sleep under a bridge, et cetera, et cetera. And then let’s—we can let the chips fall with it.

Yeah, well, it seems to me that societies like, well, the U.S. to some degree, but more specifically I would say the Scandinavian countries and probably Canada would more or less fall into that ballpark. They fall into a ballpark. It’s pretty bad metaphor, but you know, that’s kind of what those democratic socialist countries have tried to establish.

Now it seems to be easier to do that in a smaller country that's more homogeneous in its ethnic and racial grouping, and maybe also technically it’s easier with a smaller population. You—the U.S. is so damn big, it gets very complicated to try to do the same thing, you know, that those smaller qualities have managed.

And then, of course, there’s—because you might think of something like a guaranteed income. Let me ask you something about that.

Yeah, maybe it'll bolster the idea. So when I was a clinician, I worked with a lot of people who were impaired in their cognitive ability. So they probably had IQs around 80 or lower. And if your cognitive ability is at that range, it would be hard for you to master something like folding a letter to get it into an envelope.

And that’s way harder than you think because you have to fold it exactly in thirds; you can't be out by more than about an eighth of an inch. And so I had one client, I probably trained him for 30 hours to do that well enough so that the letters would go through an automated machine so that he could keep his volunteer job.

But anyways, the U.S. military has been doing cognitive testing since World War I about, and they determined—I don't remember when—and this is part of American legislation; you cannot be inducted into the armed forces if you have an IQ, I think, less than 80.

And the reason they determined that is because they couldn't find any military job of any sort that someone who is that cognitively impaired could manage proficiently. You think that’s a killer issue because it's not like the military isn't highly desirous of pulling people in, especially from, say, the working class.

So they were motivated to find the opposite, and that's like 10 percent of the population. And so here we have a problem, and no one will face this, as far as I can tell, liberals or conservatives: 10 percent of the population can’t really function in the complex cognitive environment, and that’s what we’re producing for everyone to live in.

And we can't have a conversation about that because, you know, the liberal types think, well, everyone can be trained to do anything, which is complete bloody rubbish. And the conservatives think, well, you know, if you just buckle down and work, away you go!

And there’s some truth in that because conscientiousness does predict long-term economic success, but that doesn’t deal with this other issue at all. It's 10 percent of the population; they're so impaired in terms of their cognitive functioning that there's no useful word for them in the military.

Well, you can take that—are we talking about in the military?

Well, the reason I think the military example is so compelling is for two reasons.

Is that, you know, America, in particular, has used the military as a means of social mobility, right? Because it moves people from the working class upward, and that's been a conscious policy decision in part. So there's that!

But the other part is, you know, often the military is pretty damn hungry for people! And so if they've decided that, “Well, this doesn’t work,” that’s hard to see.

Well, I buy it. And that’s partly—well, because I know how much intellectual variability there is between people. It's stunning and terrifying at the same time. It’s not a positive thing; it’s not.

I don't know—existing, this idea that we can't find anything for them to do? I mean, but—and to what extent does—you remember The Bell Curve?

Yeah, who could? Okay, yeah, I was at Harvard when that came out, and Hernstein was still a professor there.

So, and I only want to talk about it a little bit—I read The Bell Curve a couple of times, and one of the things Hernstein and Murray said in that book that really stuck in my mind is that academic types like you and me, we virtually never encounter anyone in the lower 50th percentile of the cognitive distribution.

You know, when we think of undergraduates, damn, they have an IQ of 110. That’s like 80th percentile. And so you get blinded as you move up the, especially the academic ladder; you get blinded to the bottom 15 of the cognitive distribution because you just never—they’re—those people are not in your purview. They’re not in your circle.

Okay, I’ll take that point. I can’t use my personal experience. But what I’m chafing at is that, okay, I’m wearing glasses because I don’t see very well without them, and I’m undoubtedly in the distribution of visual acuity in the bottom, I don’t know, 10, 15.

But when I put on a pair of glasses, I am able to function. And what I'm missing here is a consideration of whether or not we can't adapt our institutions of, you know, productivity or human service or education or whatever so as to meet this minimum requirement—which is taking everybody, for almost everybody, giving them something to do.

Giving you something to do? Yeah, well, that needs to be done!

And look, I only add a couple of things to this, so in the IQ literature, because you might think, well, that’s biology and it’s immutable, okay, no—not exactly. There’s this Flynn effect that has shown that over the last hundred years, IQ on average has been rising.

And a huge part of that is probably better nutrition in the lower quartile of the population, so that made a huge difference. People got smarter because they weren’t starving, essentially.

They weren't malnourished. And then there is evidence too that—so it’s not like this is exactly unremediable, but the distribution doesn’t seem to change much; you know what I mean?

It doesn’t pack tighter into the middle. You still have the problem that P—some people are extremely smart and fast, and some people aren’t. And so, well, it’s a hard problem. It’s a very, very hard problem to solve.

I’m not saying that we shouldn’t solve it and that we shouldn't pay some attention to the people who are struggling at the bottom. We absolutely should. But it isn’t obvious exactly—it isn’t obvious how to do it.

So I’ll get this guy worked with—I mean, like I said, he probably had an IQ maybe something around 80, I would have estimated, and I tried to find him a job.

Now, it was really hard. He had a volunteer job in a bike shop for a while, and it was a bike bookshop— a real, you know, a small enterprise—and he could sort of put books on the shelf, although he couldn't sequence them very well, and then that place couldn't pay him.

And so then I got him a volunteer job at a charity, and he couldn't do it well enough; they were going to fire him. I went and talked to the director of the charity. I said, "You can't fire this guy because he's going to kill him."

It's like, think about this! He's 40. He’s got a volunteer job at a charity, and there he’s going to get fired! It's like, how the hell do you recover from that?

Now, he quit two months later anyways, and then he got a job with someone who trained dogs, and that worked out just fine. But you get my point; it was virtually impossible to find him a niche.

I tried for—with his mother, who was extraordinarily devoted to him in a very positive way—we tried for three years really to slot him in somewhere, and it was virtually impossible.

So, are you thinking that our homeless shelters and the prisons of the country and so on are basically populated by people such as this who are unable to get their foot on the bottom rung?

No, I wouldn't—the evidence for a relationship between IQ and criminality, that's not very strong. So, I wouldn’t say that in requirement to incarceration. I would say it's more likely in homelessness and that sort of thing; that's more likely where people, you know, they fall out of the economy because there isn’t anything they can find that will pay them a wage that will enable them to live.

So—but—but the IQ relationship with criminality isn't very high.

I'm keenly aware of how politically incorrect this whole conversation you and I are having—I just read a piece in the Atlantic, I think it was, about a woman—I believe she's a cognitive psychologist; I don't recall her name just now—she was at the Russell Sage Foundation.

She met with a fierce pushback when she had just attempted to assert that variation in human intelligence was associated with variation in human populations, with other kinds of, oh, genetics.

It was genetics, I’m sorry—genetic variation wasn’t just intelligence. It wasn't just intelligence, but she was saying, "Look, people are different. The ability for us to understand the genome much better now allows us to document that to some degree. There's distribution in the population, and it's associated with the distribution of outcomes that we're concerned about."

And there was a firestorm approach!

Oh, yeah! Well, it’s no wonder, man! You can’t dive into the IQ literature without coming away, like, shell shocked in 15 different dimensions, I mean, because certainly, a huge part of G proficiency is biologically—what would you say?—it has a biological foundation.

I mean, I was reading about John von Neumann the other day, you know, and people who knew him and Einstein thought he was way smarter than Einstein! And that’s not nothing!

He could multiply eight-digit numbers in his head when he was 10—two eight-digit numbers! Oh, that's a prodigy!

Yeah, exactly! You know, he might have had the most—he might have had the most magnificent mathematical mind ever, and like that’s way out on the distribution, right?

I mean, he had a huge impact in economic theory, by the way—and that was just a hobby! It was something he was doing out of his back pocket; it wasn’t even what they really cared about!

Yeah, exactly, exactly! And you meet people like that now and then, but not very often, you know? And they’re so damn smart you just can't bloody well believe it!

And that’s the case, you know, and then with regards to socialization, you know, well, it's pretty easy to make someone dumber, but it's not that easy to make them smarter for obvious reasons.

You know, it’s a lot easier to wreck something than it is to improve it, and so that is the fact, this fact of that predetermination, in some sense, really is a sorrowful—what would you call it? A fact?

It's a sorrowful fact—a tragic reality might be one way of putting it—that it's simply given in our nature that we have to reckon with, and the temptation to want to not see it and not accept it can be very powerful.

Well, and I can understand exactly why. Because, well, first of all, generally, the people who discuss such things don't have a lot of hands-on experience with people in the bottom success tile, let's say— the bottom one-sixth—so they just don’t know how much difference there is in the range.

And I’ve administered IQ tests to all sorts of people, and you can't believe what people don't know and can't compute. It’s beyond comprehension in some ways at the bottom, but then also at the top—I had a graduate student at Harvard; she didn’t know anything about statistics when I first met her.

And four months later, she was teaching statistics at a graduate level! She was unbelievable! And she was almost that gifted verbally as well!

Now, she had some social problems that might have been associated with her remarkable cognitive ability, but, you know, it was unreal! She made more progress in four months in the statistical realm than I did in 15 years!

Okay, so there are differences amongst us—so both ends of the spectrum—and we need to learn how to live with them!

Yeah, well, part of it is to admit it and to see if we can do that politically without getting, you know, bogged down in accusations and the weeds, and that's a real difficult thing to do!

And it's not like I know exactly how to do it, but I’m not going to ignore what I learned, and I'm not going to ignore the social consequences of it. It’s like life’s a lot harder for people in the bottom ten percent of the cognitive distribution. There’s no—the Southern Poverty Law Center has classified Charles Murray as a white supremacist.

This is an organization that’s a watchdog for—it’s a white supremacist! Yep! I mean, not a lot of people are going to stick their head up out of the foxhole if that’s what's waiting for him!

Yeah, that's for sure! That’s for sure! Well, you know, I would also say one other thing that would probably make me unpopular among psychologists too, mostly, but there isn’t a single phenomenon documented in the social sciences that we know more about than the psychometrics of cognitive ability.

If you throw that out, you throw everything else out because not the people who established psychometrics of intelligence also established all the statistical techniques that all social scientists use to assess and evaluate their data. You just don’t get to throw it out!

And that's also unfortunate because it's a dismal literature in many ways because the differential between people is so unbelievably extreme, and it matters!

Well, here's where we are. In economics, there are people who are arguing in popular press and magazines and so forth that you shouldn't put a cognitive ability measure on the right-hand side of your regression equation when you're trying to explain wage variation in the population.

They think that is a morally objectionable thing to do. Differences among people in earnings are to be understood in any way that you can other than—well, that’s totally true!

It's completely idiotic! It's completely idiotic! Because part of—look, part of what puts you up in that upper end of the distribution is something like speed, right? So imagine there’s some desirable place to get economically, maybe you’re designing computer chips—that's a good example.

Well, if you're faster, you’re going to get there sooner, and then you’re going to reap the economic rewards, and that speed is assessed with G. It’s a function of G—C!

Got computational speed! And so, and then, you know, you also might say, "Well, these damn tests are culture-loaded," and that’s a reasonable potential objection, but I’ve never seen a culture-fair test that has the same validity.

No one's ever been able to produce them, and basically people gave up in the 1960s. The best they've ever come up with is the Raven's Progressive Matrices, and it’s a pretty good—so imagine it took a bunch of single tests of intelligence, and then you’ve got the manifold, which is the average across all tests.

You could pick the test that correlated best with that manifold, and that’s the Raven's Progressive Matrices, and so—and it produces differences!

So I don't know what to do with that! You know, you can't throw your hands up and say, "Well, it's insolvable," but you can't not take it into account because then you underestimate the burden that people at the bottom end of the distribution carry when they're trying to struggle uphill. You know, and you say, "Well, all you have to do is work hard," because that’s the conservative attitude, and conscientiousness is an indicator; it’s a personality trait.

It’s an indicator of work ethic, and it’s correlated with economic outcome at about 0.25—something like that. But cognitive ability is correlated at about 0.5. So yeah, work hard; it matters.

But it doesn’t matter as much as intelligence!

So, yeah, you don't have to convince me; I'm again just struck by the political climate of the time and the fierce resistance to this kind of causal attribution to intrinsic characteristics of individuals, especially those under genetic control.

And when you put it in a racial disparity context, then all bets are off! I mean, it just becomes impossible!

Yeah, well, that's true!

Yeah, well, you know, I would also say one other thing that, you know, would probably make me unpopular among psychologists too, mostly, but there isn’t a single phenomenon documented in the social sciences that we know more about than the psychometrics of cognitive ability.

If you throw that out, you throw everything else out because not the people who established psychometrics of intelligence also established all the statistical techniques that all social scientists use to assess and evaluate their data. You just don’t get to throw it out!

And that’s also unfortunate because it’s a dismal literature in many ways because the differential between people is so unbelievably extreme, and it matters!

Well, here's where we are. In economics, there are people who are arguing in popular press and magazines and so forth that you shouldn't put a cognitive ability measure on the right-hand side of your regression equation when you're trying to explain wage variation in the population.

They think that is a morally objectionable thing to do. Differences among people in earnings are to be understood in any way that you can other than—well, that’s totally true! It's completely idiotic!

It's completely idiotic! Because part of—look, part of what puts you up in that upper end of the distribution is something like speed, right? So imagine there’s some desirable place to get economically, maybe you’re designing computer chips—that's a good example.

Well, if you're faster, you’re going to get there sooner, and then you’re going to reap the economic rewards, and that speed is assessed with G. It’s a function of G—C!

Got computational speed! And so, and then, you know, you also might say, "Well, these damn tests are culture-loaded," and that’s a reasonable potential objection, but I’ve never seen a culture-fair test that has the same validity.

No one's ever been able to produce them, and basically people gave up in the 1960s. The best they've ever come up with is the Raven's Progressive Matrices, and it’s a pretty good—so imagine it took a bunch of single tests of intelligence, and then you’ve got the manifold, which is the average across all tests.

You could pick the test that correlated best with that manifold, and that’s the Raven's Progressive Matrices, and so—and it produces differences!

So I don't know what to do with that! You know, you can't throw your hands up and say, "Well, it's insolvable," but you can't not take it into account because then you underestimate the burden that people at the bottom end of the distribution carry when they're trying to struggle uphill.

You know, and you say, "Well, all you have to do is work hard," because that’s the conservative attitude, and conscientiousness is an indicator; it’s a personality trait.

It’s an indicator of work ethic, and it’s correlated with economic outcome at about 0.25—something like that. But cognitive ability is correlated at about 0.5.

So, yeah, work hard; it matters.

But it doesn’t matter as much as intelligence!

So, yeah, you don't have to convince me; I'm again just struck by the political climate of the time and the fierce resistance to this kind of causal attribution to intrinsic characteristics of individuals, especially those under genetic control.

And when you put it in a racial disparity context, then all bets are off! I mean, it just becomes impossible!

Yeah, well, that's true!

Yeah, well, you know, I would also say one other thing that, you know, would probably make me unpopular among psychologists too, mostly, but there isn’t a single phenomenon documented in the social sciences that we know more about than the psychometrics of cognitive ability.

If you throw that out, you throw everything else out because not the people who established psychometrics of intelligence also established all the statistical techniques that all social scientists use to assess and evaluate their data. You just don’t get to throw it out!

And that’s also unfortunate because it’s a dismal literature in many ways because the differential between people is so unbelievably extreme, and it matters!

Well, here's where we are. In economics, there are people who are arguing in popular press and magazines and so forth that you shouldn't put a cognitive ability measure on the right-hand side of your regression equation when you're trying to explain wage variation in the population.

They think that is a morally objectionable thing to do. Differences among people in earnings are to be understood in any way that you can other than—well, that’s totally true!

It's completely idiotic! It's completely idiotic! Because part of—look, part of what puts you up in that upper end of the distribution is something like speed, right?

So imagine there’s some desirable place to get economically; maybe you’re designing computer chips—that's a good example.

Well, if you're faster, you're going to get there sooner, and then you're going to reap the economic rewards, and that speed is assessed with G. It’s a function of G—C!

Got computational speed! And so, and, you know, you also might say, "Well, these damn tests are culture-loaded," and that’s a reasonable potential objection, but I’ve never seen a culture-fair test that has the same validity.

No one's ever been able to produce them, and basically people gave up in the 1960s. The best they've ever come up with is the Raven's Progressive Matrices, and it’s a pretty good—so imagine it took a bunch of single tests of intelligence, and then you've you got the manifold, which is the average across all tests.

You could pick the test that correlated best with that manifold, and that’s the Raven's Progressive Matrices.

And so—and it produces differences! So I don’t know what to do with that!

You know, you can't throw your hands up and say, "Well, it's insolvable," but you can't not take it into account because then you underestimate the burden that people at the bottom end of the distribution carry when they're trying to struggle uphill.

You know, and you say, "Well, all you have to do is work hard," because that's the conservative attitude, and conscientiousness is an indicator of work ethic and it's correlated with economic outcome at about 0.25, something like that. But cognitive ability is correlated at about 0.5.

So, yeah, work hard; it matters! But it doesn't matter as much as intelligence!

So, yeah, you don't have to convince me! I'm again just struck by the political climate of the time and the fierce resistance to this kind of causal attribution to intrinsic characteristics of individuals, especially those under genetic control.

And when you put it in a racial disparity context, then all bets are off! I mean, it just becomes impossible!

Yeah, well, that’s true!

You can see, there’s almost like—it’s almost like a massive cognitive dissonance at play there!

And it’s tied to the fact that many otherwise intelligent and thoughtful people are often terrified of the implications of a discussion of differences—
Yes! And I mean, you see that also with discussions about race!

Right, you say, "Look, here are people at the bottom of the distribution," and there's a lot of denial about that, almost a refusal to address it and that’s why we’re having this conversation!

And that refusal to address it sometimes feels politicized; sometimes it feels like it’s very emotional!

Well, of course, there’s—you're talking about a potential catastrophe, right? And the catastrophe lies in the fact that we can’t talk rationally about this!

And it's partly because talking rationally makes both sides uncomfortable and it's—it can be painful!

Well, and the social consequences of making those statements about it can be dire.

Right!

So we really want people to be able to speak freely but with consideration, right? Without tying someone to a negative consequence without being able to say, "I was here—I got here through my effort and my hard work!"

But in a world where that's been misrepresented, you know, you—you have to wonder!

And do—do those narratives create certain fixed assumptions? Do they represent something like a tapestry of American history that we just can't seem to unravel?

Sure, sure! And that is a scary thing!

And that, I think, is exactly what I was saying! All of these questions, for all the great debates, they can see a connection that we can’t see!

Because ultimately, we want to be fair! We want to be just! And we want to avoid putting anyone in a situation that can lead them down a pessimistic rabbit hole in such a way that they lose their opportunity!

That's right!

So it's difficult to see how people can navigate their way to the right kind of holistic understanding without some reconciliation! But at the same time, it’s the struggle that we’ve been both going through all throughout this dialogue; it’s a fundamental part of life!

Exactly!

And that struggle is often not worth the effort but rather vital to our humanity!

And what is it we hang onto in this life? What does it mean to be alive? How do we find the meaning in our struggles?

I believe those are the questions that we're all trying to answer together!

Yeah, absolutely! I mean, what a struggle! What a struggle!

And certainly, my hope is that if we can, in our living, create dialogue, create fresh context, that we might turn something painful into something poignant!

Exactly!

So thank you very much for talking with me today! It was a real pleasure discussing these things with you, and I probably talked too much because I usually do, but I apologize for that! But I enjoyed it very much!

Nice to meet you, Jordan! Thank you! It was a pleasure meeting you!

And, and good luck with your endeavors in the future! Hopefully we’ll meet at some point, and hopefully we’ll get a chance to talk again!

And say hi to Dr. McWhorter for me!

I will do that!

All right!

All right!