Garett Jones is an economist at George Mason University and the author of The Cultural Transplant, Hive Mind, and 10% Less Democracy.

This episode was fun and interesting throughout!

He explains:

• Why national IQ matters

• How migrants bring their values to their new countries

• Why we should have less democracy

• How the Chinese are an unstoppable global force for free markets

Watch on YouTube. Listen on Apple Podcasts, Spotify, or any other podcast platform.

Timestamps

(00:00:00) - Intro

(00:01:08) - Migrants Change Countries with Culture or Votes?

(00:09:15) - Impact of Immigrants on Markets & Corruption

(00:12:02) - 50% Open Borders?

(00:16:54) - Chinese are Unstoppable Capitalists 

(00:21:39) - Innovation & Immigrants 

(00:24:53) - Open Borders for Migrants Equivalent to Americans?

(00:28:54) - Let's Ignore Side Effects?

(00:30:25) - Are Poor Countries Stuck?

(00:32:26) - How Can Effective Altruists Increase National IQ

(00:39:13) - Clone a million John von Neumann?

(00:44:39) - Genetic Selection for IQ

(00:47:02) - Democracy, Fed, FDA, & Presidential Power

(00:49:42) - EU is a force for good?

(00:55:12) - Why is America More Libertarian Than Median Voter?

(00:56:19) - Is Ethnic Conflict a Short Run Problem?

(00:59:38) - Bond Holder Democracy

(01:04:57) - Mormonism

(01:08:52) - Garett Jones's Immigration System

(01:10:12) - Interviewing SBF

Transcript

This transcript was autogenerated and thus may contain errors.

[00:00:41] Dwarkesh Patel: Okay. Today I have the pleasure of speaking with Garrett Jones, who is an economist at George Mason University. . He's most recently the author of the Cultural Trans. How migrants make the economies. They move to a lot like the ones they left, but he's also the author of 10% Less Democracy and Hive Mind. We'll get into all three of those books. Garrett, welcome to the podcast. 

[00:01:06] Garett Jones: Glad to be here.

Thanks for having me.

[00:01:08] Migrants Change Countries with Culture or Votes?

[00:01:08] Garett Jones: Um, 

[00:01:09] Dwarkesh Patel: first question is, isn't the cultural transplant still a continuation of your argument against democracy? Because the isn't one of the reasons we care about the values of migrants, the fact that we eliminate democracy. So should review this book as part of your critique against democracy rather than against migration specifically.

[00:01:27] Garett Jones: Um, well, I do think that, uh, governments and productivity are shaped by the citizens in a nation in, in almost any event. Um, I think that even as we've seen recently in China, even in a very strong authoritarian dictatorship, which some would call totalitarian, even there, the government has to listen to the masses.

So the government can only get so far away from the masses on average, even in, uh, an autocracy. If you had 

[00:01:57] Dwarkesh Patel: to split apart the contribution though, um, the, the impact of migrants on, let's say the culture versus the impact that migrants have on a country by voting in their political system, um, uh, how, how would you split that apart?

Is, is the, is mainly the impact we, the cultural impact we see for migration due to the ability of migrants to vote or because they're just influencing the culture just by being 

[00:02:19] Garett Jones: there? I'll cheat a little bit because we don't get to run experiments on this, so I just have to kind of guess, uh, make an informed guess.

I, I'm gonna call it 50 50. Um, so the way people, uh, the way citizens influence a country through formal democracy is important. Uh, but citizens end up placing some kind of limits on the government anyway. And the people in the country are the, they're the folks who are gonna work in the firms and be able to either establish or not establish.

Those complicated networks of exchange that are crucial to high productivity. . ,

[00:02:52] Mean vs Elite IQ

[00:02:52] Dwarkesh Patel: I wanna linger on hive mind a little bit before we talk about the cultural transplant. Um, if you had to guess, does, do the benefits of National IQ come from having a right tail of elites that is smarter or is it from not having that strong of a left tail of people who are, you know, lower productivity, more like markedly to commit crimes and things like that?

In other words? Uh, yeah, go ahead. 

[00:03:14] Garett Jones: Yeah. Yeah. I, I think, uh, the upper tail is gonna matter more than the lower tail, um, in, in the normal range of variation. Uh, and I think part of that is because, uh, nations, at least moderately prosperous nations have found tools for basically reducing the influence of the least informed voters.

And for. Uh, basically being able to keep productivity up even when there are folks who are sort of disrupting the whole process. Um, you know, the, the, the risks of crime from the lower end is basically like a probabilistic risk. It's not like it's, it's not like some, uh, zero to one switch or anything. So we're talking about something probabilistic.

And I think that, uh, it's the, the median versus the elite is the, is the contrast that I find more interesting. Um, uh, median voter theorem, you know, normal, the way we often think about democracy says that the median should be matter more for determining productivity and for shaping institutions. Um, and I tend to think that that's more important in democracies for sure.

So when we look at countries, if you just look at a scatter plot, just look at the raw data of a scatter plot. If you look at the few countries that are exceptions to the rule, where the mean is the mean, IQ is the best predictor of productivity compared to elite iq. Um, . The exceptions are non democracies and South Africa.

So you see a few, uh, places in the Gulf where there are large migrant communities who are exceptionally well educated, exceptionally cognitively talented. Um, and that's associated with high productivity. Those are a couple of Gulf states. It's probably cutter, the UAE might be Bahrain in there, I'm not sure.

Um, and then you've got South Africa. Those are the, those are the countries where the average test score, it doesn't have to be iq, it could be just Pisa, Tim's type stuff. Um, those are the exceptions to the rule that the average iq, the mean IQ is the best predictor of national productivity. 

[00:05:14] Dwarkesh Patel: Hmm. Uh, interesting.

Um, does that imply the fact that the, um, at least in certain contexts, the elite IQ matters more than the left tail. Does that imply that we should want a greater deviation of IQ in a country? That you could just push a button and increase that deviation? Would that be good? 

[00:05:33] Garett Jones: No. No, I don't think so. Uh oh.

If you could just increase the deviation, um, holding the mean constant. Yeah. Yeah. I think so. In the normal range of variation. Yeah. Yeah. Yeah. So, mm-hmm. , um, is it, and I think that it has more effects. It, no, it's people at the top who are, um, tend to be coming up with, uh, the big breakthroughs, the big scientific breakthroughs, the big intellectual breakthroughs that end up spilling over to the whole world.

Basically the, the positive externalities of innovation. This is a very, almost Pollyanna-ish, uh, Paul Roamer new endogenous, new, uh, new growth theory thing, right? Which is the innovations of the elite, a swamp, uh, the negatives of the low skilled among. , 

[00:06:14] Dwarkesh Patel: can we just apply this line of reasoning to low skilled immigration as well?

Then that maybe the average goes down, the average IQ of your country goes down if the, if you just let in, you know, millions of low skilled immigration immigrants, and maybe there's some cultural effects to that too. But, you know, you're also going to the, that the elite IQ will still be preserved and more elites will come in through the borders, along with the low scale migrants.

So then, you know, since we're caring about the devi deviation anyways, uh, more immigration might increase the deviation. Uh, and then, you know, the, we just, uh, that's a good 

[00:06:46] Garett Jones: thing. So notice what you did there is you, you did something that didn't just, uh, increase the variance. You simultaneously increase the variance and lowered the mean Yeah.

Yeah. And median, right? And so I think that, uh, hurting the mean and median is actually a big cost, especially in democracies. And so that is very likely to swamp, uh, the benefits of, um, the small, the small probability of getting. Hire elite folks in as part of a low-skilled immigration policy. Mm-hmm. , so pulling down the mean or the median is that that's a, that's that swamps that swamps the benefits of increasing variants there.

Yeah. Yes. 

[00:07:26] Dwarkesh Patel: But if you get rid of their migrant's ability to vote, and I guess you can't do that, but let assume you could do that. Yeah. What exactly is, like, what is the exec mechanism by which the, the, the cultural values or the lower median is impacting the elite's ability to produce these valuable externalities?

You know, like there's a standard compared to advantage story that, you know, they'll, they'll do the housework and the cooking for the elites and they can do the more productive 

[00:07:52] Garett Jones: Yeah. Taking all the institutions as given, which is what a lot of open borders optimists do. They take institutions as given they take cultural norms as given.

Um, all that micro stuff works out just fine. I'm totally, I'm totally on board with all that sort of Adam Smith division of labor. Blah, blah, blah. Um, but, institutions are downstream of culture and, uh, cultural norms will be changing partly because of what I call spaghetti theory, right?

We meet in the middle when new folks come to a country. There's some kind of convergence, some part where people meet in the middle, um, between the, the values, uh, that were previously existing and the values that have shown up, uh, that migrants have brought with them. So, you know, like I I call it spaghetti theory because, um, when Italians moved to America, that got Americans eating more spaghetti, right?

And if you just did a simple assimilation analysis, you'd say, wow, everybody in America eats the same now, like the burgers and spaghetti. So look, the Italians assimilated, but migrants assimilate us. Um, uh, native Americans certainly changed in response to the movement of Europeans. Um, English Americans certainly changed in response to the migration of German and Irish Americans.

So this meeting in the middle is something that happens all the time, and not just through Democratic channels, just through the sort of soft contact of cultural norms that sociologists and social psychologists would understand. 

[00:09:15] Impact of Immigrants on Markets & Corruption

[00:09:15] Garett Jones: Um, no, I'm sure you saw the book that was released, I think in 2020 titled, uh, retro Refuse, uh, where they showed, uh, slight positive relationship between, uh, immigration and, you know, pro-market, uh, laws.

[00:09:27] Dwarkesh Patel: And I guess the idea behind that is there's selection effects in terms of who would come to a country like America in 

[00:09:32] Garett Jones: the first place. Well, they never ran the statistical analysis that would be most useful. I think they said that. Uh, so this is Powell and Na Roth Day. Yeah. They ran a statistical analysis that said, and they said, in all of the statistical analysis we've ever run, we've never found negative relationship between low-skilled migration, any measure of it, and changes in economic freedom.

And, um, I actually borrowed another one of Powell's data sets, and I thought, well, how would I check this theory out? The idea that changes in migration have an effect on economic freedom? And I just used the normal economist tool. I thought about how do economists check to see if changes in money, changes in the money supply, change the price level.

That's what we call the quantity theory, right? Mm-hmm. , the way you do that is on the x-axis. You, you show the change in the money supply On the y axis, you show the change in prices, right? This Milton Friedman's idea. Money's always everywhere. Yeah. Inflation's always neverwhere Montessori phenomenon. So that's what I did.

Uh, I did this with a, with a, um, a student. Uh, we co-authored a paper doing this. And the very first statistical analysis we ran, we looked at migrants who came from countries that were substantially more, uh, corrupt than the country's average. And we looked at the, the different, the relationship between cha, an increase in migrants from corrupt countries, and subsequent changes in economic freedom.

Every single statistical analysis we found had a negative relationship. , we ran the simplest estimate you could run. Right? Change on change. Change in one thing, predicts change in another. They somehow never got around to running that very simple statistical analysis. CH one change predicts another change.

Hmm. We found negative relationships every time. Sometimes statistically significant, sometimes not always negative. Somehow they never found that. I just don't know how . But 

[00:11:21] Dwarkesh Patel: what about the anecdotal evidence that in the US for example, the, in the periods of the greatest expansion of the welfare state or of governed power during the New Deal or great society, the levels of foreign-born people were at like historical lows.

Uh, is that just a coincidence or what, what do you think of? I'm 

[00:11:38] Garett Jones: not really interested in, uh, migration per se. Right. My story is never that, like migration per se, does this bad thing. Migrants are bad. That's never my story, right? Mm-hmm. , as you know, right? Yeah. Yeah. So my story is that migrants bring, uh, cultural values from their old country to their new country.

And sometimes those cultural norms are better than what you've got, and sometimes they're worse than what you've got. And sometimes it's just up for debate. 

[00:12:02] 50% Open Borders?

[00:12:02] Dwarkesh Patel: So if you had to guess what percentage of the world has cultural values that are equivalent to or better than the average of Americas? 

[00:12:11] Garett Jones: Uh oh.

Equivalent to or better then? Yeah. Uh, I mean, just off the top of my head, maybe 20%. I dunno, 30%. I'll just throw something out there like that. Yeah. So I mean, like for country averages, right? Yeah, yeah, yeah, yeah, yeah. Um, 

[00:12:25] Dwarkesh Patel: currently we probably don't have, uh, it would probably be hard for like 20% of the rest of the world to get into the us.

Um, w w would you support some, uh, PO policy that would make it easy for people from those countries specifically to get to the us? Just, uh, have radical immigration liberalization from those places? 

[00:12:44] Garett Jones: Um, that's really not my comparative advantage to have opinions about that, but like, substantial increases of people who pass multiple tests, like, let's take the low hanging fruit and then move down from there.

Right? So people from, uh, countries, uh, that ha um, on average have say higher savings rates, um, higher, uh, education levels. Higher s what I call s a t, deep root scores and, um, countries that are, say half a standard deviation above the US level on all three, 

[00:13:18] Dwarkesh Patel: right? Why do they have to be higher? Why not just equivalent, like, uh, you get all the gains from trade and plus it can't be, you know, equivalent.

So it's, there's no 

[00:13:27] Garett Jones: trade. Part of the reason is because the entire world depends on US innovation. So we should make America as good as possible, not just slightly better than it is. So very few firms would find that their optimal hiring policy would be hire anyone who's better than your current stock of employees.

Would you agree with that? 

[00:13:42] Dwarkesh Patel: Yeah. But you, uh, have to pay them a salary. If you're just, uh, if it's just somebody just comes to the us, you don't have to like pay them a salary, right? So if somebody is better, that, if somebody's producing more value for a firm than the salary would pay them, I think 

[00:13:52] Garett Jones: like is is a firm's job to maximize its profits or to just make a little bit more than it's making right?

Maximize profits. But yeah, there you go. So you pack, you find the best people you can, you know, sports teams that are hiring don't just say, we wanna hire people who are better than what we got. They say, let's get the best people we can get. Why not get the best? That was Jim Jimmy Carter's, that was Jimmy Carter's, uh, biography.

Why not the best. But you, 

[00:14:16] Dwarkesh Patel: you can do that along with getting people who are, you know, unexpected, uh, terms as good as the existing Americans. Why 

gives 

[00:14:24] Garett Jones: y'all like, I don't care what you, why you want this? This seems like crazy, right? What are you talking about? But 

[00:14:29] Dwarkesh Patel: I, I'm not sure why not the best what the trade out there, huh?

No, I'm not saying you don't get the best, but I, I'm saying once you've gotten the best, what is the harm in getting the people who have equivalent s a t scores and, and the rest of the things you 

[00:14:41] Garett Jones: mentioned. I think part of the reason would be you'd wanna find out, I mean, if you really wanna do something super hardcore, you'd have to find out what's best for the planet as a whole.

What's the trade off between, um, Having the very best, uh, most innovative, talented, frugal people in America doing innovating that has benefits for the whole world, versus having an America that's like 40% better, but we're the median's a little bit, the median of skills a little bit lower. Right. Uh, because the median's shaping the productivity of the whole team.

Right? Yeah. This is what you, you know what it means when you believe in externalities, right? 

[00:15:14] Dwarkesh Patel: But if you have somebody who's equivalent by definition, they're not moving the median down. 

[00:15:19] Garett Jones: That's, you're, you're totally right about that. Yeah. But like, why wouldn't I want the best thing possible? Right. Okay.

I'm still trying to figure out why you wouldn't want the best thing possible. You're trying to go, why? I don't want the best thing possible. I'm like, why not? 

[00:15:31] Dwarkesh Patel: I'm not disagreeing with you. I'm just, I'm a little bit confused about why that that precludes you from also getting the second best thing possible.

At the same time you're, because you're not limited to just the best. 

[00:15:42] Garett Jones: Right. Well, uh, because the second best is going to have a negative externality on the first best. Everything's externalities. This is my worldview, right? Everything's externalities. You bring in the second best, you're like, you're not, that person's gonna make things on average a little worse for the first best person.

[00:16:00] Dwarkesh Patel: But it seems like you were explaining earlier that the negative externalities are coming from people from countries with, uh, low s a t scores. And by the way, s a t you can explain what that means just for the audience who's not familiar with how you're using that term. 

[00:16:11] Garett Jones: Oh yeah. So, um, there, there are three prominent, uh, measures in what's known as the deep roots literature and, uh, that are widely used.

Uh, two are s n a, that state history and agricultural history. That's how many thousands of years your ancestors have had experience living under organized states or living unsettled agriculture. And then the T-score is the tech history score. I used the measure from 1500. It's basically what fraction of the world's technology were your ancestors using in 1500 before, uh, Columbus and his expansive conquest ended up upending the entire world.

Uh, the world map. So s a and T are all predictors of modern prosperity, but especially when you adjust for migration. 

[00:16:54] Chinese are Unstoppable Capitalists 

[00:16:54] Garett Jones: Gotcha. 

[00:16:55] Dwarkesh Patel: We can come back to this later, but one of the interesting things I think from the book was you have this chapter on China and the Chinese people as a sort of unstoppable force for free market capitalism.

Mm-hmm. . Um, and it's interesting, as you mentioned in the book, that China is a poorest majority Chinese country. Um, what do you think explains why China is a poorest, uh, majority Chinese country? Maybe are there like non-linear dynamics here where, uh, if you go from 90 40 to 90% Chinese, there's positive effects, but if you go from 90 to 95% Chinese, there's too much?

[00:17:26] Garett Jones: No, I think it's just, I think just communism is dumb and it has terrible, like sometimes decades long effects on institutional quality. I don't really quite understand. So I'd say North Korea, if we had good data on North Korea, North Korea would be even a bigger sort of deep roots outlier than China is.

Right? It's like, don't, don't have a communist dictatorship in your country. Seems to be pretty, a robust lesson for a national prosperity. China's still stuck with a sort of crummy version of that mistakes still. North Korea, of course, is stuck with an even worse version. So I think that's, I, my hunch is that that's, you know, the overwhelming issue there.

Um, it's, it's something that, it's, it's sort of a China's stuck in an ins. Currently China's stuck in an institutional cul-de-sac and they just don't quite know how to get out of it. And it's, uh, bad for a lot of, for the people who live there. On average, if the other side had won the Chinese Civil War, things would probably be a lot, lot better off in China today.

Yeah. 

[00:18:22] Dwarkesh Patel: Um, but what, what is that suggestion about the deep roots literature? If the three biggest countries in the world, China, India, and America, Um, it, it, it under predicts their performance, or sorry, in the case of China and India, it, uh, it, it over predicts their performance. And in the case of America, it under predicts maybe the, how, how reliable is this if like the three biggest countries in the world are not, uh, adequately accounted for?

[00:18:45] Garett Jones: Uh, well, you know, communism's a really big mistake. I, I think that's totally accounted for right there. Um, I think India's underperformance isn't that huge. Um, the US is a miracle along many ways. Um, it's, we should draw our lessons from the typical country, and I think, uh, population weighted estimates, I don't think that basically one third of the knowledge about the wealth of nations comes from the current GDP per capita of China, India, and the us, right?

I think much less than one third of the story of the wealth of nations comes from those three. And, uh, again, in, in all three cases though, if you look at the economic trajectories of all three of those people, oh, all three of those countries, uh, they're all, uh, China and India growing faster than you'd expect.

And also, I wanna point out. This is the most important point actually. Um, when we look at, uh, when Kaplan made this claim, right? Brian Kaplan has made this claim, right? Yeah. That the SATs, that the ancestry scores, the deep root scores don't predict, um, the prosperity of, uh, the, the low performance of Indian China.

He only checked the S and the A and the s a T scores. Okay. Which letter did he not predict? Which letter did he never test out? He never tested the T. What do you think happens when he tests the T? Does it predict, uh, China 

[00:20:02] Dwarkesh Patel: and India and America, 

[00:20:03] Garett Jones: Hey, start, they t goes back to being statistically significant again, Uhhuh

So with T, which we've always known is the best of the deep root scores, somehow Kaplan never managed to measure that one. Just as Powell Naste never managed to run the simplest test change in, uh, migrant corruption versus change in economic institutions somehow, like the simplest test just never get run.

[00:20:26] Dwarkesh Patel: Okay. And then what is the impact if you include t. If you, 

[00:20:29] Garett Jones: if you, if you look at tea, then, um, then, uh, contrary to what Kaplan says, uh, the deep roots, that deep roots measure is sig statistically significant. 

[00:20:38] Dwarkesh Patel: Okay. Um, yeah, I, 

[00:20:40] Garett Jones: interesting. The puzzle goes away, 

[00:20:42] Dwarkesh Patel: interesting. 

[00:20:43] Garett Jones: Um, yeah. So somehow these guys just never seem to run like the simple things, the transparent things.

I don't know 

[00:20:49] Dwarkesh Patel: why the, um, the weird, huh? The, the, the one you mentioned from, what was it Nassa, the name of the guy who wrote the Richard at re refuse 

[00:20:57] Garett Jones: the Yeah, yeah. Powell Naste. 

[00:20:59] Dwarkesh Patel: Yeah. Yeah. That you said you did the regression on institutional corruption, uh, and from the countries to come from. Is that, was that right?

I, 

[00:21:06] Garett Jones: and so yeah. The, the measure they use, I just took, I took Powell's dataset from another study, and it was the percent. Of it was basically, um, the percentage of your nation's population, the percentage increase in your nation's population from relatively poor or corrupt countries. They had multiple measures, Uhhuh

So, and what is on the y axis there? Y axis is change in economic freedom. That's my preferred one. Gotcha. There's also a change in corruption one, which is a noisier indicator. Um, you get much clearer results with change in economic freedom, so. Gotcha, 

[00:21:38] Dwarkesh Patel: gotcha. 

[00:21:39] Innovation & Immigrants 

[00:21:39] Dwarkesh Patel: Um, now does the ideas getting harder to find stuff and great stagnation, does that imply we should be less worried about impinging on the innovation engine in these, uh, countries that people might wanna migrate to?

Because worse comes to worst. It's not like there are a whole bunch of great new theories that were gonna come out anyways. 

[00:21:58] Garett Jones: Uh, no. I think that, I think that it's always good to have great things, um, and new ideas. Yes, new ideas are getting harder to find, but, um, that, but that the awesome ideas that we're still getting are still worth so much.

Right. If we're still increasing lifespan a month, a year, uh, for every year of research we're doing, like, that just seems great. Right? A decade that adds a year to life, so, mm-hmm. , just to use a rough, uh, ballpark measure there. But, so we 

[00:22:25] Dwarkesh Patel: have a lot of these countries where a lot of innovation is happening.

So let's say we kept, uh, one or two of them as, you know, immigrate, uh, havens from any potential, uh, downsides, from radical changes. You know, we already had this in the case of Japan or South Korea, there's not that much of migration there. Mm-hmm. . What is, what is a harm in then using the other ones to decrease global poverty by immigration or something like 

[00:22:48] Garett Jones: that?

Well, um, it's obviously better to create a couple of innovation powerhouses, um, rather than none. Right? So obviously that's, that's nice. But instead, 

I would prefer to have, um, open borders for Iceland if the Open borders advocates are right and open borders. , we'll have no noticeable effect on institutional quality, then it's great to move, , to have our open borders experiment run in a country that's lightly populated, has a lot of open land, and, um, has good institutional quality.

And Iceland fits the bill perfectly for that. So we could preserve the institutional innovation skill, uh, the institutional quality of the, the what I call the I seven. Uh, that's, you know, China, Japan, South Korea, the us, Germany, uk, France, and choose any country out of the a hundred, out of the couple of dozen countries that have good institutional quality.

Just pick one of the others that aren't one of those seven, pick one that's not an innovation powerhouse and turn that into your open borders, uh, country. Um, you could, uh, if you wanted to get basically Singapore levels of population density in Iceland, that'd be about 300 million people, I think. I think I, that's about what the numbers end up looking like.

Something like that. But 

[00:24:00] Dwarkesh Patel: the, so you can put entire, but, but the value of open borders comes from the fact that you're coming to a country with high conglomerations of talent and capital and other things, which is, uh, not true of Iceland. Right. So isn't the entire 

[00:24:13] Garett Jones: No, no. I thought the whole point of open borders, that there's institutional quality and there's some exogenous institutions that make that place more productive than other places.

Mm-hmm. . And so by move, I, I, that's my version of what I've been exposed to as open borders, the, is that institutions exogenously exist. There's some places have, uh, moderately laissez, fairer institutions in their country and moving a lot more people there will not reduce the productivity of the people who are currently there, and they'll become much more productive.

And so, like the institu, you know, the institutional quality's crucial. So, I mean, if you're a real geography guy, you'd be excited about the fact that Iceland is so far, so close to the north. because latitude is a predictor of prosperity. 

[00:24:53] Open Borders for Migrants Equivalent to Americans?

[00:24:53] Dwarkesh Patel: Um, I want to go back to the thing about, well, should we have open border for that 20% of the Popula global world's population that comes from Yeah.

Um, equivalent, s a t and other sort of cultural traits as America. Mm-hmm. , because I feel like this is important enough to dwell on it. You know, it seems similar to saying that once picked up a hundred dollars bill on the floor, you wouldn't pick up a $20 bill on the floor cuz you only won the best bill.

Uh, the $20 bills is right there. Why not pick it up? Um, 

[00:25:18] Garett Jones: so what if you have, yeah. What if the $20 bill makes your, turns, your, uh, a hundred dollars bill into like an $80 bill and turns all of your 80 a hundred dollars bills and $80 bills. 

[00:25:27] Dwarkesh Patel: But is it, aren't your controlling for that by saying that they have equivalent scores along all those cultural tests that you're.

[00:25:34] Garett Jones: No, because, um, the median, so, so take the simple version of my story, which is the median of the population ends up shaping the productivity of everybody in the country. Right? Or the mean, right? The mean skill level ends up shaping the productivity of the entire population. Right? So that means we end up, I mean, I, I try not to math this up.

I don't wanna math this up for the, you know, in a popular book, but it means we face a trade off between being small, a small country with super awesome, uh, positive externalities for all the workers by just selecting the best people. And every time we lower the average skill level in the country, we're lowering the average productivity of everyone else we're creating.

We didn't, 

[00:26:11] Dwarkesh Patel: what? We didn't lower it. So you have to have skills that are lower compared to, than the median of a median American. You, 

[00:26:18] Garett Jones: so this is, this is a c Paraba story, right? Like if you could suppose the US is at 80 now on a zero to a hundred scale, right? Just, just saying it's 80. Yeah. Yeah. And you have a choice between being hundred and being 99.

if you're at 99, the 99 is making, all compared to the world of average of a hundred, the world of an average 99 is making, reducing the productivity of all those hundreds. Okay. So if we chose 90, we're reducing the productivity of all those hundreds. 

[00:26:48] Dwarkesh Patel: Yes. Okay. So let's say we admit all the smartest people in the world, and that gets us from 80 to 85.

That's a new, that's a new media in America. Yeah. At that point. And, but this is because we've admitted a whole bunch of like 90 nines that have just increased our average. Yeah, yeah. Um, at that point, open borders for everybody who's ever been 85, 

[00:27:08] Garett Jones: like I, this is, this is, ends up being a math problem. It's a little hard to solve on a podcast, right?

Because it's the, it's the question of do I want a smaller country with super high average productivity? Or a bigger country with lower average productivity. And by average productivity, I don't just mean, uh, uh, a compositional effect. I mean negative external, I mean relatively fewer positive externalities.

So I'll use the term relatively fewer positive externalities rather than negative externalities, right? So like, I don't exactly know where this is. Trade off's gonna pan out, but, um, there is a case for a sort of Manhattan when people talk about a Manhattan project, right? They're talking about putting all like a small number of the smartest people in a room.

And part of the reason you don't want like the 20th, smartest person in the room. Cause, cuz that person's gonna ruin the ruin stuff for our, for the other smart people. I, it's amazing how your worldview changes when you see everybody as an external. I, 

[00:28:02] Dwarkesh Patel: I'm kind of confused about this because just having, at some point you're gonna run outta the smartest people, the remainder of the smartest people in the world.

If you've admitted all the brilliant people. Yeah. And given how big the US population is to begin with, you're not gonna change the median that much by doing that. Right. So it's, it's almost a global end to just having more births from the average American. Like if, if the average American just had more kids, the population would still grow.

Mm-hmm. and the relative effect of the brightest people might dilute a little bit. Um, but I I, 

[00:28:33] Garett Jones: and that maybe that's a huge tragedy. We don't know without a bunch of extra math and a bunch of weird assumptions. We don't know. So like I'm, there's a point at which I have to say like, I don't know. Right. Okay.

Yeah. Uh, yeah. Is diluting the power of the smartest person in America, like keeping us from having wondrous miracles all around us all the time? I mean, probably not, but. I don't know, 

[00:28:53] Dwarkesh Patel: but, 

[00:28:54] Let's Ignore Side Effects?

[00:28:54] Dwarkesh Patel: but I guess the sort of the meta question you can ask about this entire debate is, listen, there's so much literature here and it's hard to tell what exactly will happen.

You know, it's possible that culture will become worse. It's possible, it'll become better. It's possible to stay the same, given the fact that there's this ambiguity. Why not just do the thing that on the first order of effect seems good? And, you know, just like moving somebody who's like in a poor country to a rich country, first order effect seems good.

I don't know how the third and fourth order effect shapes out. Let's just, you know, let's just do the simple obvious thing. 

[00:29:22] Garett Jones: I, I thought that the, one of the great ideas of economics is that we have to worry about secondary and tertiary consequences. Right? 

[00:29:28] Dwarkesh Patel: But if, if we, if we can't even figure out what they are exactly, why not just do the thing that at the first order seems, uh, good.

[00:29:35] Garett Jones: Um, because if you have a compelling reason to think that the, uh, direction of strength of the second and third and fourth order things are negative and the variances are really wide, then you're just adding a lot more uncertainty to your outcomes. So, And adding uncertainty or outcomes that has sizable negative tail, especially for the whole planet.

Isn't that great? Go ahead and run your experiments in Iceland. Let's run that for 50 years and see what happens. It's weird how everybody's obsessed with it running the experiment in America, right? Why not running in Iceland first? Because America's 

[00:30:05] Dwarkesh Patel: got a great, a lot of great institutions right there.

We can check and see what 

[00:30:08] Garett Jones: Iceland Iceland's a great place too. Um, and I use Iceland as a metaphor, right? Like it's, people are obsessed with running it in America. Like there's some kind of need. I don't know why. So let's try in France. Um, let's try, let's try Northern Ireland. , 

[00:30:24] Dwarkesh Patel: uh, are,

[00:30:25] Are Poor Countries Stuck?

[00:30:25] Dwarkesh Patel: are places with low s a t scores and again, s a t we're not talking about the, uh, in case you're skipping to the timestamp, we're not talking about the college test.

Um, the deep roots. 

[00:30:35] Garett Jones: S a t Exactly. Uh, state history, agricultural history, tech history. 

[00:30:38] Dwarkesh Patel: Right. Exactly. Are, are those places with, uh, low scores on, um, on that test? Are they stuck there forever? Or, uh, is there something that can be done if you are a country that has had a short or not significant history of, um, technology or agriculture?

[00:30:56] Garett Jones: Well, the, I start off the book with this, which I really think that, uh, one thing they could do is, uh, create a welcoming environment for large numbers of Chinese migrants to move there persistently. I don't think that's of course the only thing that could ever work, but I think it's something that's within the range of policy for at least some poor countries.

I don't know which ones, but, uh, some poor countries could follow the. Approach that many countries in Southeast Asia followed, which has created an environment that's welcoming, welcoming enough to Chinese migrants. Um, it's the one country in the world with large numbers of high s a t score, uh, with alar, with a high s a T score culture, large population.

It's enough of an economic failure, so for at least a little longer that, uh, folks can, might be able to be interested in moving to a poor country with lower s a t scores. In a better world, you can do this with North Korea too, but the population of North Korea isn't big enough to make a big dent in the world, right?

Mm-hmm. , uh, China's population is big enough. Yeah. 

[00:31:54] Dwarkesh Patel: Another thing you're worried have to worry about in those cases though though, is the risk that if you do become successful in that country, there's just gonna be a huge backlash and your resources will. AppD, like what happened famously. 

[00:32:05] Garett Jones: So in, in Indonesia, right?

Yeah. There have been many Oh, yeah, yeah. Times across Southeast Asia where anti-Chinese pogroms have been, um, uh, unfortunately a fact of life. So, yeah. Yeah. 

[00:32:15] Dwarkesh Patel: Or Indians in Uganda under, uh, IDI. I, I mean, yeah. Yep. Um, yeah. Yeah. Uh, okay. So actually I, I'm curious how you would think about this given the impact of National iq.

[00:32:26] How Can Effective Altruists Increase National IQ

[00:32:26] Dwarkesh Patel: Um, if you're an effective altruist, what, uh, are you just, uh, handing out iodine tablets, uh, across, across the world? What, what are you doing to increase national 

[00:32:34] Garett Jones: iq? Yeah. This is places, this is something that I, yes. Uh, finding ways I, this is what I call a, a Flynn cycle. Like I wish, I'm hoping for a world where there are enough public health interventions and probably K through six education interventions.

to boost test scores in the world's poorest countries. And I think that ha ends up having, um, uh, a virtuous cycle to it, right? As people get more productive, then they can afford more public health, which makes them more productive, which means they can afford more public health. I think brain health is an important and neglected part of child development.

Um, fortunately we've done a fair amount to reduce the amount of environmental lead, um, in a lot of poor countries. That's probably having a good effect right now as we speak in a lot of the world's poorest countries. You're right. Um, iodine, basic childhood nutrition, uh, reliable healthcare, uh, to, you know, prevent the worst kinds of just mild childhood infections that are probably, uh, creating what the, what they, what economists sometimes call health.

Things that end up just hurting you in a way that causes, uh, an ill-defined long-term cost. A lot of that's gonna have to show up in the, in the brain. Um, I'm a big fan of the, of the view that part of the Flynn Effect is, uh, basically nutrition and health. Mm-hmm. , uh, Flynn wasn't a huge believer in that, but I think that's, um, certainly important in the poorest countries.

Yeah. 

[00:33:57] Dwarkesh Patel: Um, I, I think Brian showed an open voters that if you look at , the, um, IQ of adoptees from poor countries, um, who go, uh, Sweden is the only country that collects data, but if you get adopted by a parent in, um, uh, Sweden, uh, the, the half the gap between the averages of two countries, half gap, yeah, yeah, yeah, yeah.

Goes away. So, I mean, is one of the ways we can increase global IQ just by moving kids to, uh, countries with good health outcomes that, uh, will nourish their 

[00:34:27] Garett Jones: intelligence. Well, that's a classic short run versus long run effect, right? So, uh, libertarians and open borders advocates tend to be focused on the short run, static effects.

So, um, and so you're right, moving kids from poor countries to richer countries is probably gonna raise their test scores quite a lot. And, uh, then the question is, in over the longer run, are those, uh, lower skilled folks, the folks with lower test scores, uh, going to degrade the institutional quality? of the places they move to, right?

So if you close half the gap between the poor country and the rich country, half the gap is still there. Right? And if I'm right, , that IQ has big externalities then, , moving people from a, uh, lower scoring country to a richer scoring country and closing half the IQ gap still means on net you're creating a negative externality in the country the kids are moving to.

[00:35:17] Dwarkesh Patel: Um, yeah, yeah. Uh, we can come back to that, but yeah. Yeah. So 

[00:35:23] Garett Jones: it, it's, it's basically, you just look at the question, is this lowering the mean test scores in your country? And if it's lowering the mean test scores in the long run, it's on average gonna lower institutional quality productivity savings rates, those.

Um, it's hard to avoid that. It's hard to avoid that outcome. So, uh, I don't 

[00:35:38] Dwarkesh Patel: remember the exact figures, but didn't Brian address this in the book, um, in the Open Borders book as well, that you can, even if there's a, the, a national iq, uh, lowers on average, if you're just, uh, if you're still raising the global iq, that, that it's still nets out positive, or am I 

[00:35:54] Garett Jones: remembering that wrong?

Well, that, notice what he's, he, what he does is he attributes, uh, he says there's some productivity that's just in the land, that's just geographic factors. Yeah. So basically being close for, and so that, so basically moving people away from the equator boost productivity substantially. And again, that's, uh, a static result.

Um, the reason I, uh, I mentioned that ignores all the I seven stuff that I'm talking about where anything that lowers. Um, level of innovation in the world's most innovative countries has negative costs for the entire planet in the long run, but that's something you'd only see over the course of 20, 30, 50 years.

And libertarians and open border advocates are very rarely interested in that kind of 

[00:36:33] Dwarkesh Patel: timeframe. Is there any evidence about, uh, the impact of migration on innovation specifically? So not on the average institutional quality or on, you know, uh, the, the corruption or whatever, but like, just directly the amount of innovation that happens or maybe the Noble Prizes won or things 

[00:36:48] Garett Jones: like that?

Um, no. I mean, I would presume, I think a lot of us would presume that, uh, the European invasion of North America ended up having, uh, positive effects for global innovation. It's not an invasion that I'm in favor of, but if you wanna talk crudely about Yeah, yeah. Whether migrations had an effect on innovation, uh, you'd probably have to include that as any kind of analysis.

[00:37:07] Dwarkesh Patel: Yep. Yep. , do you think that the people who are currently Americans, but , their ancestry, traces back to countries with low s a t scores? I i, is it possible that US GDP per capita would be higher, without that contribution?

Or how do you think about that? 

[00:37:21] Garett Jones: I mean, that it follows from thinking through the fact that we are all externalities positive or negative, right? I don't know what in, in any particular, any one particular country could turn out to be some exciting exception to the rules, some interesting anomaly. Um, but on average, we should presume that the average skill level of voters, the average, uh, traits that we're bringing from, uh, the nations, that the nations of our, of our ancestors are as having an effect on our current productivity for gut ori.

So just following through the reasoning, I'd have to say on average, that's most likely. Uh, but it, there could always be exceptions to the rule. 

[00:37:56] Dwarkesh Patel: I guess we see large disparities in income between different ethnic groups across the world, not just in the United States. Yeah. Doesn't that suggest that some of the gains can be privatized from whatever the cultural or other traits there are? Cuz if these, if over decades and centuries these sorts of, uh, these sorts of gaps continue, 

[00:38:18] Garett Jones: I don't see why that would follow.

Right. Um, 

[00:38:21] Dwarkesh Patel: uh, if everything is being, if all the externalities are just being averaged out over time, what did you expect that these GA gaps would 

[00:38:29] Garett Jones: narrow? Well, I mean, I'm being a little rhetorical when I'm saying everything's literally an externality, right. I don't literally believe that's true. Um, for instance, people with higher education levels do actually earn more than people with lower education levels.

So that's literally not an externality. Right. So some of these other cultural traits that people are bringing with them from their, um, ancestors, nations of origin, um, could be one or one likely one source of these income differences. I mean, if you think about differences in frugality, uh, differences in personal responsibility, which show up in the surveys, uh, that are persistent across generations, those are likely to have an effect on long run productivity for you, yourself and your family.

So, mm-hmm. , let alone the hive mind stuff, where you find that there's a positive relationship between test scores and, and product. 

[00:39:13] Clone a million John von Neumann?

[00:39:13] Garett Jones: There was a 

[00:39:14] Dwarkesh Patel: blogger who took a look at your 2004 paper about the, um, impact of National IQ on, um, on G uh, G D P. Um, and they calculated, so they were just speculating. Let's say you cloned a million John Mond Nomans, and as assume that John Mond Noman had an IQ of 180, then you could, uh, let me just pull up the exact numbers.

You could, um, you could raise the average IQ of the United States by 0.21 points, um, and if it's true that one IQ point contributes 6% to, uh, G increasing G, then this proposal would increase U US GDP by, uh, 1.2, uh, six two 6%. Do you buy these kinds of extrapolations or 1.26%? Yeah. Yeah, because you're only cloning a million, 

[00:39:58] Garett Jones: Jon.

Oh, yeah. Yeah. Okay. So this is about 1 million Jon. Yeah. Yeah, that sounds. I mean, that's the kind of thing where I wouldn't expect it to happen overnight. Right. I tend to think of that, uh, the IQ externalities as being two, three generations. I, I lump it in with what economists call organizational capital.

That sounds about right. Yeah. Yeah, yeah. I mean, I, I can't remember where I saw this. I think I, I stumbled across it myself at some point too, so. 

[00:40:19] Dwarkesh Patel: Yeah. Yeah. Uh, by the way, his name is Avaro Dam Bernard, if you wanna 

[00:40:22] Garett Jones: find it. Oh, okay. Yes, yes. Okay. Yeah, it's, I mean, in, in, it's in that ballpark, right? It's just this idea that, and, and more importantly, um, a million John Bon Nomans would be a gift to the entire planet, right?

Yep. Yep, yep. So, yeah, if you had a, if you had a choice of which country to have the John Vno, the million John Von Nomans, uh, it's probably gonna be one of the I seven maybe there's, maybe there's a, maybe Switzerland would be a good alternative. 

[00:40:46] Dwarkesh Patel: What is the optimal allocation of intelligence across the country?

Because one answer, and I guess this is the default answer in our society, is you just send them where they can get paid the most, because that's a good enough proxy for how much they're contributing. Yeah. And so you have these high glomeration of talent and intelligence in places like Silicon Valley or New York.

Um, and, you know, because their contributions there can scale to the rest of the world. This is actually where they're producing the most value. Another is, you know, you actually, you should disperse them throughout the country so that they're helping out communities. They're, you know, teachers in their local community.

Um, I think there was, uh, A result. There was an interesting anecdotal evidence that during the Great Depression, the crime in New York went down a ton, and that was because the cops in New York were able to hire the, you know, they had like a hundred applications for every cop they hired. And so they were able to hire the best and the brightest, and there were just a whole bunch of new police tactics and every that were pioneered at the time anyways.

So, is the market allocation of intelligence correct? Or do you think there should be more distribution of intelligence across the country? How do you think about that? 

[00:41:50] Garett Jones: Yeah, I mean, the mar the, the market signals aren't terrible. Uh, but, uh, this is my, my Interpol Roamer kicks in and says, uh, innovation is all about externalities.

And there's market failures everywhere when it comes to, in the fields of innovation. Mm-hmm. . And so, you know, I, I personally, I mean, I, I like the idea of finding ways to allocate them to, to stem style, stem style technical fields, and. , we do a fair amount of that, and maybe we do the, maybe the US does a pretty good job of that.

I don't have any huge complaints at that, at the, at the crudes 50,000 foot level, um, for the, you know, the fact that people know that there's, uh, status games they can play within academia that are perhaps more satisfying or at least as satisfying as the sort of corporate hierarchy stuff. So, yeah. Yeah. I I You don't want 'em all just, I wouldn't encourage them to solely follow market signals.

Right. I'd, I'd encourage them to be more HandsOn and, uh, play a variety of status games because the academic, um, and intellectual status game is worth a lot, both personally and than it leads to positive spillovers for. 

[00:42:58] Dwarkesh Patel: But how about the geographic distribution? Do you think that it's fine that there's people leave, uh, smart people leave Kentucky and go to San Francisco or, yeah, 

[00:43:08] Garett Jones: I'm a big glomeration guy.

Yeah. I'm, I'm, yeah, I'm a big glomeration guy. Yeah. I mean, the internet makes it easier, but then like, still being close to people's, being in the room's important. Um, there, there's, there's something, uh, both HandsOn and Gerard in here about, like, we need to find role models to imitate, and that's probably important for productivity.

[00:43:30] Dwarkesh Patel: Um, are there increasing or decreasing returns to National iq?

No, 

[00:43:38] Garett Jones: I think, um, you know, my findings were that it was all basically log linear. And so log linear looks crudely, like increasing returns. . So yeah, it looks exponential, right? So yeah, there's increasing returns to National iq. Yeah. Are are you? But, but this is, this is a commonplace finding in a sense because so many, uh, like human, all the human capital relationships I'm familiar with end up having something like a log linear form, which is exponential.

So why is that? Um, yeah, there's something multiplicative that that's how, what I have, that's all I have to say is like it's something. Somehow this all taps into Adam Smith's pin factory, and we have multiplicative not additive effects when we are increasing brain power.

Um, I have, I suspect it does have something to do with, uh, a, a better organization of the division of labor between people, which ends up happening something close to e to, uh, exponential effects on productivity. 

[00:44:39] Genetic Selection for IQ

[00:44:39] Garett Jones: A are, uh, are you a fan of genetic selection for intelligence, uh, as a means of increasing national iq or do you think that's too much playing at the 

margins if it's voluntary?

I mean, people should be able to do what they want and, um, after a couple day decades of experimentation, I think people would end up finding a path to, uh, government subsidies or tax credits or something like that. I think people voluntarily deciding what kind of kids they want to have. is a, a, a good thing.

And so by genetic selection, I assume you're meaning at the most elementary level people testing their embryos the way they do now, right? Yeah. So I mean, we, we already do a lot of genetic selection for intelligence. Um, anybody, you know, who's, uh, in their mid thirties or beyond who's had amniocentesis, they've been doing a form of genetic selection for intelligence.

So it's a widespread practice already in our culture. Um, and, uh, welcoming that in a voluntary way is probably going to have good effects for our future. What 

[00:45:40] Dwarkesh Patel: do you make of the fact that G B T three, or I think it was Chad g p t, had, uh, measured IQ of 85? Yeah, 

[00:45:47] Garett Jones: I've seen a few different measures of this, right?

You might have seen multiple measures. Um, yeah, I think it's, I think it's a sign that basically, and, and when you see people using non IQ tests to sort of assess the outputs of G P T on, um, long essays, it does does seem to fit into that sort of, not quite a hundred, but not, not off by a lot. Yeah. I mean, I think it's, I think it's a sign that a lot of, uh, uh, mundane, even fairly complex, moderately complex human interactions can be simulated by a large, uh, language learning model.

Mm-hmm. . And I think that's, that's, uh, gonna be rough news for a lot of, uh, people whose life was in the realm of words and dispensing simple advice and solving simple problems. That's pretty bad news for their careers. I'm, I'm disappointed hearing that, so 

[00:46:36] Dwarkesh Patel: Yeah. Yeah. 

[00:46:37] Garett Jones: Um, at least for the transition. I dunno what the, I dunno what's gonna happen after the transition, but 

[00:46:41] Dwarkesh Patel: Yeah.

I'm hoping that's not true of programmers or economists. I like you. I mean, 

[00:46:46] Garett Jones: it might be right. I mean, it's, if that's the way it is, I mean, I, the, I mean, the car put a lot of, uh, people who took care of horses right out of outta work too, so. 

[00:46:55] Dwarkesh Patel: Yep. Um, even, okay, so let's talk about democracy that I thought this was also one of your really interesting books.

No, thanks. Yeah. 

[00:47:02] Democracy, Fed, FDA, & Presidential Power

[00:47:02] Dwarkesh Patel: even controlling for how much democratic oversight there is of institutions in the government. There seems to be a wide discrepancy of how well they work. Like the Fed seems to work reasonably well. I, I, I don't know enough about macroeconomics to know how the object level decisions they make, but mm-hmm.

you know, it seems to be a non-corrupt, like, uh, technocratic organization. Um, enough, but yeah. Yeah. Uh, if you look at something like the fda, it's also somewhat insulated from democratic processes. It seems to not work as well. Mm-hmm. , what determines controlling food democracy? What controls, what, what determines how well an institution in the government works?

[00:47:38] Garett Jones: Well, I, I think, um, in the case, the Fed, it really does matter that they, uh, the people who run it have guaranteed long terms and they print their own money to spend mm-hmm. . So that means that they're basically, Congress has to really. Make an effort to change anything of the Fed. So they really have the kind of independence that matters.

Right. You know, they have a room of their own. And, uh, the FDA has to come to Congress for money more or less every year. And the fda, uh, heads do not have any kind of security of appointment. Their appoint, they serve at the pleasure of the president. Mm-hmm. . So I do think that they don't have real independence.

Uh, I do think that they're basically, um, they're living in this slack, this area of slack to use this sort of mcno gas PolySci jargon. They're living in this realm of slack between the fact that the president doesn't wanna me, uh, muddle with them, uh, metal with them, excuse me. And the fact that Congress doesn't really wanna medal with them.

But on the other hand, , I really think that that the f d A and the C d C are doing what Congress more or less wanted them to do. They reflect, they reflect the muddled disarray that Congress was in over the period of say, COVID. Hmm. Uh, that I think that's a first order importance. I mean, I do think the fact, it's the fact that, uh, f d A and c d C don't ha, uh, seem to have that culture of, um, raw technocracy the way the Fed does that, I think that has to be important on its own.

But I think behind that, some of that is just like F D A C D C creatures of Congress much more than the Fed is. Should the 

[00:49:17] Dwarkesh Patel: power of the president be increased? 

[00:49:20] Garett Jones: Uh, no. No. Like the power of independent committees should be increased. Like more Congress should be like the Fed. If, uh, my plan for a Fed re for an FDA or CDC reorganization would be.

Making them more like the Fed, where they have appointed experts who have long terms and they have enough of a long term that they can basically feel like they can blow off Congress and build their own culture. 

[00:49:42] EU is a force for good?

[00:49:42] Dwarkesh Patel: Mm-hmm. , , so the European Union is an interesting example here because they also have these appointed technocrats, but they seem more interested in creating anno annoying popups on your websites than with dealing with econo, the, you know, the end of economic growth on the continent.

Is this a story where more democracy would've helped, or how do you think about the European Union in this context? 

[00:50:04] Garett Jones: No. And the eu, like, uh, the European, European voters just aren't that excited about democracy. I, excuse me, aren't that excited about markets overall. The EU is gonna reflect that, right? Um, what little evidence we have suggests that, uh, countries that are getting ready to join the eu, they improve their economic freedom scores, their sort of laissez fairness.

Hmm. Uh, on the path to getting ready for. , uh, join an eu. So, and then they may increase it a little bit afterwards once they join. But basically it's like, it's like, uh, when you're deciding to join the eu, it's like you decided you have your rocky training montage and get more laissez-faire. And so EU on net is a mess at polls in the direction of markets compared to where, uh, Europe would be otherwise.

I mean, just look at the nations that are in the EU now, right? A lot of them are, um, east of Germany, right? And so those are countries that don't have this great, you know, uh, history of being market friendly. And a lot of parties aren't that market friendly, and yet the EU sort of nags them into their version, like as much markets as they can handle.

So 

[00:51:05] Dwarkesh Patel: what do you think explains the fact that the Europe, uh, Europe as a whole and the voters in there are less market friendly than Americans? I mean, if you look at the sort of deep roots analysis of Europe, you would think that they should be the most. Uh, most in favor of, I don't know if the deep roots, uh, actually maybe they apply that, but Yeah, 

[00:51:23] Garett Jones: compared to the planet as a whole, they're pretty good.

Right? So, um, I, I'm, I never get that excited about like, the small little distinctions between the US and Europe, like these 30% GDP differences, which are very exciting to pundits and bloggers and whatever. I'm like 30% doesn't matter very much. That's not really my bailiwick. What I'm really interested in is the 3000% between the poorest countries and the richest countries.

So, like I can speculate about Europe, I, I don't really have a great answer. I mean, I, I think there's something to the, the naive view that, um, the Europeans with the most, uh, what my dad would call gumption are those who left and came to America. Some openness, some adventurousness. Uh, and maybe that's part of what trans, uh, made we, so basically there's a lot of selection working, uh, on the migration side to, uh, make America more open to laissez fair than Europe would be.

[00:52:14] Dwarkesh Patel: Does that overall make you more optimistic about migration to the US from anywhere? Like, you know, the same story 

[00:52:20] Garett Jones: of Yeah. Center is perab us like America, America gets people who are really great, right? I went with you there. Yeah. 

[00:52:26] Dwarkesh Patel: Does, um, elite technocratic control work best in only in high IQ countries?

Because otherwise you don't have these high IQ elites who can make good policies for you, but you also don't get the democratic protections against famine and war and things like that. 

[00:52:43] Garett Jones: Oh, I mean, I don't know. I think, I think the case for, for, uh, handing things over to elites is pretty strong in anything that's moderately democratic, right?

Um, I don't have to be. Anything that's substantially more democratic than the official measure of Singapore, for instance. I mean, that's why my book 10% Less Democracy, really is targeted at the rich, rich democracies. Once we get too far below, uh, the rich democracies, I figure once you put elites in charge, they really are just gonna be old-fashioned Gordon to rent seekers and steer everything Jordan themselves and not give a darn about the masses at all.

So that's, you know, uh, elite control in a democracy, a a lot of elite control in any kind of democracy, I think is gonna have good effect. If it's re you're really looking at something that is, uh, that meets a Mar Sen's definition of a democracy competitive market. Competitive party's free press. 

[00:53:38] Dwarkesh Patel: Mm-hmm.

does Singapore meet that criteria? 

[00:53:41] Garett Jones: No. Because their parties aren't really allowed to compete. I mean, that's pretty obvious. Yeah. The, the pa the People's Action Party really controls, uh, party competition there. 

[00:53:52] Dwarkesh Patel: So, but it, I guess Singapore is one of the great examples of technocratic, um, technocratic control, and 

[00:53:59] Garett Jones: they're just an exception of the rule.

Most countries that try to pull off that lower level democracy wind up much 

[00:54:03] Dwarkesh Patel: worse. So what is your, uh, what is your opinion of Neoreactionaries? I guess they're not in favor of 10% less democracy. They're more in favor of a hundred percent less democracy. 

[00:54:12] Garett Jones: But yeah, I think they're like kind of too much LARPing, too much romanticizing about the roheim, I guess.

I don't know. What is rheum? Yeah. The, these guys in the Lord of the Rings, you know? . , romanticizing Monarch is a mistake. Um, it's worth noting that, uh, as my colleague Gordon Tok pointed out, as along as many others, uh, in Equilibrium Kings are almost always king and council, right.

and so it's worth thinking through why King and Council is the equilibrium. Something more like a corporate board and less like, um, either the libertarian ideal of the entrepreneur who, who owns the firm, or the monarch who has the long-term interest in being a stationary bandit in real life. There's this sort of muddled thing in between that works out as the equilibrium, even in the successful so-called monarchies.

So it's worth thinking through why it is that the successful so-called monarchies aren't really monarchies, right? They're really oligarchies. 

[00:55:12] Dwarkesh Patel: Yep. Yep. Um, if you look at the median voter in terms of their preferences on academic policies, it seems like they're probably more, um, in favor of government involvement than the actual policies of the United States, for example.

Yeah. What explains this? Shouldn't the media voter theorem that we should be much less libertarian as a country than? Yeah, that's a great 

[00:55:35] Garett Jones: point from, um, Brian Kaplan's excellent. Bill Smith of the rational voter. Right? Yeah. I think part of it, I mean, I think his stories are right, which is that, uh, politicians facing reelection have this tradeoff between giving voters what the voters say they want and giving the voters the economic growth that will help the politicians get reelected, right?

Mm-hmm. Um, so it's, uh, it's a version of saying like, you know, I don't want you to pull off the bandaid, but I want my wound to all get better. So and so the politician has to, it's the politician's job to handle the contradictory demands of the voters, and by delegating authority to them. To the vote or to the elected politicians.

You get some of the benefits of elitism, um, even in a so-called democracy. 

[00:56:19] Is Ethnic Conflict a Short Run Problem?

[00:56:19] Dwarkesh Patel: Um, over the long run, should we expect any of the tensions or all of the tensions of ethnic diversity to fade away? Like nobody today worries about the different Parisian tribes in France butting heads at the workplace, right? So over time yourself 

[00:56:33] Garett Jones: and, and you're right like that, uh, the, uh, anti-German ethnic sentiment in the US totally gone, right?

So, 

[00:56:39] Dwarkesh Patel: right. Yeah. But over time, so then this, this is another one of those, the short run effects that you, uh, emphasize that your focus lesson on, right? 

[00:56:46] Garett Jones: Yeah, that's a good point. Um, it's poss you don't know which one. I mean, the problem is that ethnic conflict has been a hardy perennial. It's not the only conflict that people can ever have.

I don't, I don't know to what extent, uh, they'll, these things will fade away. As I emphasize in the culture transplant, the ethnic diversity channel is actually the least important of any of the channels I discuss. Um, and so I'm open to this thought that what you're saying will actually happen and maybe we'll just find something else to get mad at each other about like, um, uh, social media tribes or, uh, religious, religious groups.

Um, I mean, it hasn't happened yet in all the documented human history. We have. People seem to find some ethnic, uh, balance for conflict. It is worth pointing out that the one one, um, study that I report, uh, I think it's a waard coha piece. It's fine. That window, the real, uh, the source of ethnic conflict happens when private values are correlated with, um, ethnic groups, right?

So if, uh, cultural values are basically uncorrelated with ethnicity, then basically there's nothing to fight over. And that's really what's happened with a lot of old ethnic battles in the us mm-hmm. . And, um, so you're right. Some of these things will fade with time. The problem is that human beings are, one of our great evils is that we are always looking for a focal point.

and we can, people will use visible appearance as a horrifying focal point around which to, uh, peg their conflicts. It's an easy one because our brains are looking for visual patterns, and I don't like that, but it's something that will probably keep happening. 

[00:58:22] Dwarkesh Patel: One of the interesting points you made in the chapter was that the, uh, benefits of diversity are greatest when search costs are lower and the cost of vetting are lower. What do, how, how do we make sure that that is true of non-lead professions?

So if you're looking for a plumber or if you're looking for a carpenter, how, how do we make sure that you can vet them easily? 

[00:58:42] Garett Jones: I mean, I have to say that this has to be a case where like Yelp and Google and all these online ratings have given us tools for checking these things out. We know we have to be skeptical, of course, but uh, for people who know that they're good at something, the cost of entry into a new field has to be much lower than it was a few decades ago because, you know, 10 20 good Google reviews, um, and you can actually enter.

So yeah, lower, basically not, not banning, not banning disclosure of data. I'd say that's the most important thing we can do. Mm-hmm. ? Um, I think, um, you sometimes hear that medical doctors, I haven't checked up on this a long time, but apparently medical doctors often, uh, make a very risky to give bad reviews.

Sometimes you get lost, you get a lawsuit or something. Mm-hmm. . So making that a lot harder is worth it. You know, we know that some negative reviews are gonna be malicious and inaccurate, but the benefits of information flow seem really high. . 

[00:59:38] Bond Holder Democracy

[00:59:38] Dwarkesh Patel: Yeah. I thought one of the really interesting chapters in the, the 10% list democracy was the chapter on, you know, bond holder democracy.

Yeah. And I'm curious, so I mean, corporations are ex uh, obviously an example to use here where they do have bond holders who hold them accountable. Mm-hmm. , but the average lifespan of a corporation is 10 years, I believe. So do you think it'll be, it would, um, it would be even shorter if bond holders had a lesser sale on corporations or you, you know, what is the, what does the transients of the corporation tell us about their controls?

[01:00:11] Garett Jones: Oh, that's a good point. Um, well, we, we can suspect that the average person who's investing in a corporation makes money, right? Because, uh, otherwise people wouldn't be doing it right. On average people. Right? It must work. Um, so. This is what, Ryan, you actually have me stumped here. So can you rephrase the question again?

I'm trying to think through what the, what the question is there. Sure. Yeah. I, 

[01:00:32] Dwarkesh Patel: I, if bond holders do extend the longevity and the long term thinking of the organizations on, on who they hold bonds, why aren't corporations who give out bonds, why don't they tend to live longer than I think the average of 10 years?

Would it be even shorter without bond holders or, 

[01:00:50] Garett Jones: oh, I, I'd say I, a, I'd say it'd probably be shorter without bond holders or any kind of financial monitor, but second, most corporations just shouldn't live that long. Right? Most corporations, their ideas that you try out and then it, like you find out it, it doesn't work, or it should be bought up by somebody else, or the IP should be sold off.

And so having a lot of companies, uh, fade out is actually on net a good sign. I think this is really part of the John Halter wearing line of research that the sort of modern version of creative destruction research. Which finds that, you know, uh, low productivity firms exiting, you know, uh, just as naive laissez-faire predicts means that those workers and that capital can get reallocated over to a more productive firm.

So the alternative is, uh, you know, stereotypically Japanese zombie firms, right? They're kept limping along by banks that are perhaps under political pressure to lend. And so a lot of, a lot of cap human and physical capital gets tied up in low productivity projects. Yeah. So, yeah. Um, uh, a brutal bond market is, uh, a good way to send a market signal to move capital from low productivity to high productivity projects.

Um, why 

[01:01:56] Dwarkesh Patel: are yields on 30 year, uh, fixed, um, treasuries? Why are they so low? Because theoretically, investors should know that we have a lot of liabilities in the form of, you know, social security to baby boomers. Yeah. And that we've radically inflated the money supply very recently and may do so again. Uh, do you think the investors are being irrational with the, uh, low yields or what, what's going on?

[01:02:18] Garett Jones: No, no. I'm a fan of the view that the bond holders are gonna win in the long run and that, uh, inflation, any kind of super, like, super, super high inflation is not gonna be the path, uh, of the future. And what's gonna happen is that, at least think about the us Um, the way the bond holders are gonna win is that there's gonna be a mixture of tax hikes and slower spending growth, especially hurting the poor.

And that's how the US is gonna close its fiscal gap. I don't know particularly what paths other countries are gonna go through, but the US has this basically, um, this one tool, this one superpower sitting, um, sitting in the room that it hasn't used yet, and it's, oh, it's a vat, right? So the US could dramatically increase its tax revenue through either an overt or disguised value added tax, and that would raise a ton of money just like it raises in Europe.

And that would, that's the easy way to close the US fiscal gap. We probably won't even have to get to that, just making Medicaid worse. Slowly over the long run , um, maybe making Medicare worse over the long run. Right? Um, that, that by itself would close a lot of this fiscal gap. So basically, I think they'll balance the long run budget on the kind of the backs of the poor and the middle class.

That's probably the most likely outcome. So are you expecting, hence no, hence no hyperinflation. So are, are, 

[01:03:38] Dwarkesh Patel: but so you're expecting the welfare state to shrink either in quality or quantity over 

[01:03:42] Garett Jones: time in relative terms, uh, compared to the trend. I mean, if America's still getting say 1%, 1.5% richer each year, um, then that by itself, uh, means that, you know, you know, that adds a certain level of quality to healthcare over time.

And so basically if it, if it ends up staying the equivalent of say, 0%, um, that by itself, if you could get healthcare spending in, in real terms to be 0% over time, um, that, that would end up closing the gap when you compound it out long enough. Right? So, yep. Yep. Yeah. 

[01:04:16] Dwarkesh Patel: Um, is that kind of thinking. So, you know, when Liz Truss in the UK tried to implement, uh, tax reform, there was a bond holder revolt, and, you know, she was ousted.

Yeah. Uh, bondholders. There's one 

[01:04:28] Garett Jones: right there. Yeah. 

[01:04:29] Dwarkesh Patel: So do you, do you are, do we already live in the Bondholder utopia or ? 

[01:04:32] Garett Jones: Oh, yeah. I, I mean I think that that was a nice, uh, reminder that basically contrary to sort of the MMT view, um, and the sort of Pop m the pop kasian view, the debt is no barrier at all.

Um, I think that showed the bond holders, uh, are actually paying attention to long-term signals of fiscal policy credibility, and they'll take action. Yeah. Mm-hmm. . Yeah. 

[01:04:57] Mormonism

[01:04:57] Garett Jones: What, what are the deep roots of Mormonism? Why do they have such high trust and uh, uh, such tight-knit 

communities? I mean, I think part of it is that they are, they reflect a lot of this sort of, Uh, what for then was Western Pioneer culture, upstate New York, Pennsylvania, then Ohio.

Um, I think those communities tended to be, uh, high trust communities necessarily because of the difficult, uh, environment that they were living in. Um, and there was a lot of selection. There was a lot of selection over the first few decades of Mormon history where those who were willing to sort of trust the group stayed in and those who weren't willing to trust the group, um, ended up leaving.

And not just trust, but trustworthiness. I think a lot of people probably got weed out because they weren't contributing to the common good. So I think that basically by the time the Mormons got established in Utah, uh, they, they had already selected for a strong culture of, um, a kind of a, kind of in-group prosociality.

And I think that's, um, helped them, that helped them weather the storms of the 19th century. So the whole 19th century people were only joining. during this, this is during the era of polygamy in Utah. Right. Um, if they thought that they were willing to put up with this, right? And, you know, you're, you're signing up for some kind of deep sociality with a mixture of uncon, a lot of unconventional stuff.

And that foundation, uh, really helped. And the fact that Mormons since then have stayed as a religion that requires a medium, high level of, of commitment, also weeds out people who just aren't willing to make that kind of commitment. Mm-hmm. . So, I mean, I was, I was raised Mormon. Um, you know, I wasn't ultimately willing to make the commitment.

And maybe the part of the reason is cause I'm too much of a free rider, so the Mormons who are left are probably better than me. 

[01:06:46] Dwarkesh Patel: Um, the Mormon church has, I think, more than a hundred billion in assets. Uhhuh , what is it planning on doing with all this money? That's a, that's a tremendous, that's a tremendous sum.

[01:06:56] Garett Jones: I don't know. I mean, maybe they're planning to hand it to the savior when the second coming happens. Right. It's, uh, there's, there's gotta be a great argument for this option. Value of just having the wealth there. Right. It does, it must give them a kind of independence from the world when various storms come along.

Cultural, political storms. Mm-hmm. . Um, you know, I don't actually know what their plans are for what they would do with all the money, but I do know that like normal economics tells us that just peop being frugal is good for the economy overall. So Steven LANs has a great, uh, essay and praise of Scrooge.

It's especially appropriate for this time of year. And, um, being frugal means you're building up the capital stock and you're giving, uh, a sort of invisible gift to future generations. So Mormon frugality is basically helping build up the US capital stock and indirectly the world's capital stock, helping make us all more productive, which I think is something that fits in with Mormon values.

[01:07:52] Dwarkesh Patel: Yeah. Yeah. I think people have pointed out that people should be spending more money given the fact that they have so much left over by the time they die. Usually, 

[01:08:00] Garett Jones: yeah. As an individual level, if you care about your own wellbeing. That's true. Right? 

[01:08:03] Dwarkesh Patel: Yeah. . Yeah. But, okay, so if you, it is interesting, like leaving a large inheritance is, uh, is so, is socially valuable.

Yeah. 

[01:08:10] Garett Jones: Leaving a large inheritance means there's, uh, you're leaving, you're, you're, you're producing a lot, but you're not consuming very much. That means you're building up the capital 

[01:08:16] Dwarkesh Patel: stock. So. Yep. Yep. Um, and there's also, I think, um, a large amount of, uh, multi-level marketing schemes that proliferate in Utah.

Yeah. Is that one of the downsides of high social trust? 

[01:08:31] Garett Jones: Yeah. The, cuz people predate upon it, right? It strikes me as a total rent seeker sort of thing. I mean, I have to say the knives are really good. So I'm, uh, , uh, everybody I know who's ever had Cutco knives ends up using 'em for decades. So that's one of the popular multi-level marketing schemes that actually gets to, to men.

A lot of them are targeted at, at women through cosmetics, as you might know, so mm-hmm. , but at least the men's one works out. ,

[01:08:52] Garett Jones's Immigration System

[01:08:52] Dwarkesh Patel: if you had to implement an immigration system from scratch, would you actually, uh, would you actually consider these s a t scores and these other deep roots scores as part of somebody's admittance? Or would you just consider the individual level, um, your personal skill as an education and things like 

[01:09:07] Garett Jones: that?

Now, I'd wanna launch a 10 year, maybe 20 year research project of figuring how to turn the deep roots scores into something useful. So I, like, I, uh, I think right now with the deep roots literature, we're about where Milton Friedman's Monetarism was in the late sixties. You know, Friedman said, Hey, I figured out where inflation comes from, and we'd be a lot better off if we just grew the money supply 3% a year and.

N ultimately, nobody thought he was right about the 3% a year thing, but they did think that he had a, still had a lot of good advice. So Friedman ended up having a lot of good ideas, but they weren't policy ready. And I think that's about where we are with the deep roots literature right now, which is, um, I mean at most one would use it as a, like a small plus factor and a point system, but I don't even know which points I'd use.

But something along those lines is worth thinking about. I would never use a cutoff, I would never use any, uh, quotas or hard cutoffs. Uh, if you think about point space systems, 10, 20 years of. Further research, and maybe you'd find a way to put the deep roots into a point space system.

[01:10:12] Interviewing SBF

[01:10:12] Dwarkesh Patel: Yeah. Yeah. 

[01:10:12] Garett Jones: Um, how was the SPF F thing? What do you mean? So did he just say like, I'll fly you out? 

[01:10:20] Dwarkesh Patel: So I was there for the, um, EA Bahamas. Oh, okay. Okay. Yeah. Yeah. And then while I was there, I, I, um, I, I talked to somebody who knew him and I'm like, Hey, I would love to interview him.

Yeah, yeah. Some things I would ask him. Yeah, yeah. Yeah. It was, it was one of the ones where, actually I feel like I would really want to redo that one because I was aware of some things back then that were kind. Yeah, that would be worth asking about in retrospect. And of course, it's all in retrospect, but yeah.

Yeah. Um, I should have focused harder at that rather than asking these sort of philosophical questions about effective altruism. 

[01:10:51] Garett Jones: Yeah. Do you think, uh, I mean, is it as simple as like he was co-mingling funds? Uh, he, he lent a bunch of FTX money over to a hedge fund and then they lost it. 

[01:11:02] Dwarkesh Patel: Um, I, I, I, yeah. I'm guessing first 

[01:11:04] Garett Jones: approximation.

Yeah. Yeah, yeah. So it's like, it's old fashioned financial fraud, partly driven by, uh, not having a really good board over em or a good oversight. . 

[01:11:14] Dwarkesh Patel: You know what, I'm really curious to ask of you this, because you know what you're talking hive mind about the fact that higher IQ people on average, um, are more cooperative in prisoners dilemma type situations.

Yeah, yeah, yeah. And I just interviewed Bethany McClean on the podcast. It hasn't been released yet, but you know, she wrote the smartest guys in the room, which about Enron. Right. And then, so there is this thing where maybe they are less likely to commit fraud on average, but when they do, they're so much, they're really good at it.

Right, exactly. Right. So, yeah, I, I don't know, maybe, maybe one of the downsides of having a high IQ society is that what people do commit in fraud, they're super successful at it. Uh, you know, I don't know. Yeah. I mean, the, 

[01:11:52] Garett Jones: the evils of of super smart people are obviously a huge risk to all of humanity.

Right? Right. I don't have to worry about humanity being wiped out by a bunch of people with sticks and stones. Right? Yeah. I have to worry about humanity being wiped out by nuclear weapons, which could only be invented by 

[01:12:07] Dwarkesh Patel: smart people, right? Yeah, yeah, yeah, yeah. Um, are, are smart people more cooperative in a sort of very calculating sense that, you know, this game is gonna go on, so I wanna make sure I preserve my relationships.

Or even in the last turn of a iterated prisoner's dilemma game, even in the last turn, they would cooperate. 

[01:12:28] Garett Jones: Oh, in the last turn they walk away. Yeah. Yeah, yeah, yeah. I think it's, I think. There is no correlation between, uh, intelligence and say agreeableness, right? Mm-hmm. normal, psychological agreeableness.

And I think that's a broader principle or conscientiousness for that matter, right? Psychological conscientiousness. so Machiavelli intelligence, I think is what's driving the link between IQ and cooperation. So in repeated games, that Machiavelli intelligence, which a lot of intelligence researchers will talk about, turns into cosan intelligence where people find a way to grow the pie, but it's a very cynical, self-interested form of growing the pie.

Yeah. Yeah. And so I, I don't think that has any, um, I don't think it's driven by inherent prosociality. I think it's it's endogenous prosociality, not exogenous prosociality. And that's a reason to worry about it. 

[01:13:19] Dwarkesh Patel: What is, what happens to these high IQ people when if society goes into a sort of zero sum mode where there's not that much economic growth?

And so the only way you can increase your share of the pie is just by cutting out bigger and bigger slices for yourself. 

[01:13:32] Garett Jones: Yeah. Like then you gotta watch out, right? Yeah. It's like the Middle Ages right there, right? Yep. Exactly. Yeah, yeah, yeah. 

[01:13:38] Dwarkesh Patel: Um, yeah. Interesting. Um, awesome. Uh, Garrett, thanks so much for coming on the podcast. This was interesting. Thanks for having me. This has been fantastic. Yeah. Yep. Excellent. Thanks for reading my books. Appreciate it. Yeah, of course. 

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