Marilyn vos Savant has (supposedly, read the link) the world's highest recorded IQ at 228. She is now fielding questions on economics. Here is one example:
Question: Why has the income disparity
grown so much in developed countries? – Matthew Cencich, Victoria,
British Columbia, Canada
Answer: I think the disparity is
a normal result of overall economic growth. The bottom incomes (zero)
can’t go lower, but the top incomes can go up and up. And so they do,
of course.
Here is another:
Question: Do you think that government
actively encouraging people to borrow money (and spend it) is the right
way to resolve the recession? – Caroline Kelly, Hendon, London
Answer:
No. I think that more consumer activity could be modestly helpful to
the economy in the short term. And in better times, it would even
masquerade as growth. But in the current climate, increasing the family
debt would cause added personal financial problems. So I doubt that
it’s useful for government to advocate shopping as a form of national
service unless elected officials are perhaps a tad more interested in
shifting a little of the burden away from themselves than they are in a
lasting solution.
She also explains the financial crisis. ("First, an economy based on growth is bound to falter now and then. A
whole sector could collapse. It’s a house of cards. Eventually, it must
morph into a system that functions on stability, or it will fail –
meaning a fall large enough to cause an unstoppable breakdown and
widespread hardship.")
Question: on these problems, does she do better or worse than leading economists?
Addendum: Here is Marilyn on YouTube. Oddly (look just past the 4:00 mark), she can't define IQ properly.
I was with her until I followed the youtube link and found her trotting out the whole “we only use 10% of our brains” trope.
I’ve read her before, and she is clearly an intelligent and widely read person. However, I would appreciate it if she learned when to just say, “I don’t know.” She completely misses in your first example:
Q: “…income disparity grown so much in developed countries?”
A: “…The bottom incomes (zero) can’t go lower, but the top incomes can go up and up.”
Incomes of zero are not included in (any reasonable) income disparity measures.
She also says “We only use 5% of our brains.” I was told that’s a myth.
https://healthlibrary.epnet.com/GetContent.aspx?token=c5987b1e-add7-403a-b817-b3efe6109265&chunkiid=156966
Was that the accepted scientific belief at the time?
With regard to increasing wage inequality–why has its increase been more dramatic in the US than Japan? Indeed, I have seen one study that showed that the modest increase in wage inequality in Japan (relative to the US) can be traced to the increasing age of the Japanese workforce. The answer to this question is taboo.
Is the complaint here that she disagrees with economic theory, or that she doesn’t understand economic theory? Those are very different things. (I don’t think we can distinguish between them with the current evidence.) Also, she is simplifying things for an unsophisticated audience, which adds a complication.
As to whose comments are more intelligent – there is no question – vos Savant wins by definition!
As for whether Ms vos Savant delivers better commentary than economists, I would rate her comment on the financial crisis as about as rational as the Austrians, but rather less than economic commentary available elsewhere (like here).
However, as we see so clearly in hindsight, neither intelligence nor education carry crystal balls. Personally, I think our economists and our financiers, as two collective groups, dropped the ball big time on this one. I do not count myself as any better, but at least it wasn’t in my job description.
I’d like to ask a question in return. Given that for the derivatives market, along with other contributory factors, risk level skyrocketed after Bush took office (isn’t it really far too coincidental to assume that Greenspan and Freddie Mac took their actions in a vacuum, i.e. independently of the White House leadership?), how long would a collapse have been delayed if policy had been maintained approximately as it was in the Clinton years? How big could the collapse have been if it had occurred in 2001, the year after Bush took office?
Rob,
Problems with your approach;
1. A solves problems 1,3, and 8 out of 10. B solves 2, 5, and 6. Who is more intelligent?
2. Out of a thousand “test takers” the average number solved is 5, but 999/1000 cannot solve #9 and #10. One person can only solve 9 and 10. Who is more intelligent?
3. The test would have to include non-solvable problems. How many points do you get for recognizing this? How many points for persistance? Who decides that they are non-solvable
4. etc etc
There are uncountably many problems (using some reasonable definition), but only countably many solutions (each solution can be expressed as a finite string in some finite alphabet). So almost every problem is unsolvable.
Robb-
I agree with your objections. One way Legg and Hutter propose to measure the importance of problems is by their complexity. This is has the benefit of being theoretically tractable and objective. But there is also a sense in which we might want to order or weigh problems by value, which is implied in part 1 and 2 of your objection. I don’t think there is going to be a math like solution for that. But for simplicity maybe we can restrict value weights to wisdom and leave it out of raw intelligence.
Andy,
There are uncountably many problems (using some reasonable definition), but only countably many solutions (each solution can be expressed as a finite string in some finite alphabet). So almost every problem is unsolvable.
Does that argument still work if more than one problem can have the same solution?
Better then Krugman but I suspect Ms vos Savant has gaps in her economic readings
Her column is syndicated in Parade magazine. Nuff Said.
“But a very significant proportion of the population has zero (or negative) net wealth.”
But wealth can go below zero. So disparities can be created as much by growth as the opposite.
I suspect that Ms. Savant’s “world’s highest IQ” is akin to Limbaugh’s “mind on loan from God”.
I used to read her column in Parade when I subscribed to the local Sunday newspaper which is a long time ago. A lot of her answers to reader query has a strong dose of common sense. She does not come off as pretentious. I liked that. I also give a here a lot of credit for popularizing the “Monty Hall dilemma”, mentioned in the original FT article. I suspect a lot of people, esp. men, in the comments here and in other circumstance where her name is brought up, don’t like her or her answer to some questions is b/c she’s a) claims to have the highest IQ in the world b) a woman. She’s a milf, even in her sixties, if that is indeed a recent picture of her.
I’d like to point out that even if it were true that income couldn’t go below zero, then that would reduce, not increase disparity.
Answer: I think the disparity is a normal result of overall economic growth. The bottom incomes (zero) can’t go lower, but the top incomes can go up and up. And so they do, of course.
I’m for sure no defender of Ms. Savant’s economic acumen, as I’ve pointed out myself that she doesn’t know how prices are set in a market — but on this point Gary Becker says the same thing.
Internationally, when everyone in the world starts off poor, then some people start learning how to get rich, inequality will inevitably grow until the rest of the masses learn the same thing, and even after that until convergence can occur — if and when.
Domestically, there is indeed a zero wage bottom that high-school drop outs start at, but as productivity increases the top wage rates rise higher and higher.
(This effect is exaggerated in measures of inequality that take “snap shots” of given points in time, since wages rise with age — so today’s low-income “poor” include many people who are just starting out at a low wage but who in the the future will be earning a top wage even higher than today’s. I.e., inequality within age cohorts as measured by lifetime income is much lower than when measured by the snapshots of one point in time.)
Becker thus says rising measured inequality can be a good thing, as a statistical artifact of the population as a whole getting richer.
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I posed the question originally.
I’m not happy with the answer – I too find it disappointing.
I believe there are more politics involved than the mechanics of economic theory or simple arithmetic can explain.
Remember I asked about developed countries, not developing or undeveloped countries.
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