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Patrick says

But most wealth is inherited, not earned. And since IQ is only somewhat heritable, you end up with the situation of not-as-smart people with very smart or aggressive ancestors ending up with most of the wealth.

That is somewhat self-correcting. There are a lot of golden-era moneyed families whose descendants now have to work for a living (e.g., Vanderbilts, Skakels). All it takes is one generation of dumbasses to squander the wealth.

I dunno...looking at those graphs tells me you are using fuzzy logic...

Patrick says

High IQ does make you better able to earn a high income.

But most wealth is inherited, not earned. And since IQ is only somewhat heritable, you end up with the situation of not-as-smart people with very smart or aggressive ancestors ending up with most of the wealth.

High IQ does make you better able to earn a high income. true
IQ is only somewhat heritable true
you end up with the situation of not-as-smart people with very smart or aggressive ancestors ending up with most of the wealth true

most wealth is inherited probably true However, a lot of new wealth is siphoned off, rather than earned, by sneaky and aggressive, but not necessarily smart, people. For example, Donald Trump. He lost more than enough wealth to offset his inheritance yet still is rich, despite being bankrupted multiple times, because he swindled so many people. Does that constitute intelligence? Maybe some specific kind of intelligence, but not Steven Hawkins intelligence.

They each obscure the best tax policy, which is Georgism: a tax on unearned wealth. true

Additionally, Georgism taxes use of public resources. We really need a Georgist society. Only parasites object to Georgism.

In America, you can earn a six figure income if you are very intelligent and work very hard. The problem with our economic system and laws is that in order to obtain a seven figure income you have to stop being productive and spend all your time exploiting others and stealing from others in ways that are legal. This is why almost everyone in the top 0.1% are scumbags who should be considered criminals but aren't because they bribed politicians to make certain crimes under certain conditions legal for certain people. The exception to this rule are entertainers and the very rare inventor.

Patrick says

High IQ does make you better able to earn a high income.

But most wealth is inherited, not earned. And since IQ is only somewhat heritable, you end up with the situation of not-as-smart people with very smart or aggressive ancestors owning most of the wealth.

Very interesting. I wonder what the relation between IQ/wealth/income is for other countries. My guess the rich in other countries are more dependent on inheriting their wealth.

Patrick says

They each obscure the best tax policy, which is Georgism: a tax on unearned wealth.

Georgism is too focused on taxes as a cornerstone of economics. If smart people are allowed to earn and innovate without the constraints of regulation, they would quickly overrun the inherited class, who would soon find themselves penniless. Government regulation only exists to stifle competition, and until that is corrected, there will continue to be a divergence between those who should be wealthy, and those who are.

Great post Patrick, thanks for sharing.

Even the correlation with incomes is surprisingly weak: in particular the number of smart people with what appears to be fairly low income.

In many countries wealth is being accumulated through criminal activities and corruption.

Heraclitusstudent says

smart people with what appears to be fairly low income.

My experience in the business world tells me that high sociopathic tendencies are what get you really paid, not high IQ. Sociopaths probably tend toward higher IQ, but there is a divergence in social skills (evil manipulation) that is not measured by IQ. High IQ types with Asperger's or a PhD in 17th Century Cartography are a burden to their own livelihood.

Having a higher IQ, makes one more likely to be able to think for themselves, and outside the box. Many of us learn at a young age, that there's better things to do in this life, than toiling away for more money than one needs.

If you value your time, your family, your hobbies, or even God forbid, your happiness, then you might find these desires in conflict with wealth/income accretion/accumulation.

errc says

If you value your time, your family, your hobbies, or even God forbid, your happiness, then you might find these desires in conflict with wealth/income accretion/accumulation.

I'm fairly certain the vast majority of "smart" American people fail to notice any such conflict.