Tag Archives: high iq basic income

Basic Income Alternatives

It’s not that Medium.com writers are dumb or uneducated, but rather that many of them have no idea (like the post about Charles Darwin a few days ago) what they are talking about. The large web 2.0 font and portrait avatars lend a pretense of credibility, when the content itself is often poorly conceived and arguments unsubstantiated. MBAs just out of college who write on Medium are full of idealism but lacking in common sense or are unable to do even the most basic of research to try to substantiate their arguments or to anticipate obvious counterarguments.

Universal Basic Income Will Accelerate Innovation by Reducing Our Fear of Failure

After a huge rambling preamble about risk taking, evolution, and the decline of entrepreneurship, here is the crux of the author’s argument:

But the effects of basic income don’t stop with a reduction of risk. Basic income is also basic capital. It enables more people to actually afford to create a new product or service instead of just think about it, and even better, it enables people to be the consumers who purchase those new products and services, and in so doing decide what succeeds and what fails through an even more widely distributed and further decentralized free market system.

Such market effects have even been observed in universal basic income experiments in Namibia and India where local markets flourished thanks to a tripling of entrepreneurs and the enabling of everyone to be a consumer with a minimum amount of buying power.

There are obvious problems:

1. Although a basic income may create an incentive for entrepreneurship, it may also create an incentive for people to not work or to work less, thus negating any gains from the former.

2. The resulting inflation from the basic income will erode its purchasing power and cause all sorts of economic problems. A $10,000 annual basic income for 200 million Americans will cost $2 trillion, which is about the same as the total cost of the Iraq War, except imagine the $2 trillion compressed to just a single year, repeated indefinitely, instead of spread out over 14 years.

3. If the goal is to increase entrepreneurship, a basic income is the wrong solution, mainly because a $10,000 income is hardly sufficient to cover the costs of starting a business, unless, I suppose, your business is coding a simple app or something very minimalist. Just the advertising budget alone would be insufficient. It’s obvious the author didn’t think this through.

Here are some examples of how expensive it can be to start a business:

The author mentions Namibia and India as success stories, but a few thousand dollars goes much further in those countries than in America, that’s for sure.

Unlike free market purists, I am not totally opposed to intervention, but it should not be done out of altruism or indiscriminately, but to maximize economic value, an example being the funding of Tesla, as I describe here. Just as corporate welfare is better than regular welfare, a high-IQ basic income is better than a basic income for everyone. Rather than haphazardly giving everyone money, which is what proponents of a UBI advocate, let’s allocate it only to those who have the greatest biological potential to generate a positive ROI from it. Here are some ideas:

1. A high-IQ basic income (a government-funded equivalent of ‘Mensa’ that pays its members)

2. Profit sharing loans for high-IQ businesses and founders (these loans would not be fiscally profitable, but the economic value produced by the created businesses would make it worthwhile in the long-run)

3. A federal version of the MacArthur Fellows Program , which is a lump sum that pays more the the high-IQ basic income, for truly exceptional individuals and would have more recipients than the current MacArthur Fellows Program.

4. Student loan forgiveness for STEM majors, or income sharing loans (where the payment is deducted from future wages above a certain after-tax income threshold)

5. Generous government incentives for high-IQ couples to marry and procreate, creating a eugenic effect, versus the dysgenic system we have now that gives incentives for the less intelligent to have children and creating a feedback loop of welfare dependence. Also, financial incentives for the less intelligent to not have children, with possible mandatory birth control for low-scorers.

The odds this stuff will happen are about zero, which are the same odds of a basic income ever happening in America, but assuming deficits don’t matter and we want to maximize potential ROI (and we’re only talking hypotheticals here), this is how it should be done.

The Purdue Plan

No more student loans? Purdue University proposes selling shares of students’ future income

Purdue University wants to offer a very different way for students to pay for school: private investors will fund their education, and get paid back as a portion of the students’ future income. It’s called an Income Share Agreement (ISA)—if students earn more than expected after university, they pay back more; if they earn less, they pay less.

I would put my money on the students with the highest IQ/SAT scores and or STEM majors…pretty obvious to me and probably everyone else, too, which is why I would be surprised if the program isn’t terminated, should it prove successful, due to political pressure by the left. Let’s see …a Computer Science major with a near-perfect SAT vs. a Feminist Studies major with a mediocre SAT score, who would I rather fund? Even if you eliminate majors, I and any other rational investor would invest by IQ/SAT scores, since IQ and lifetime income highly correlated.

And that brings me to a second idea I have, which is related to the high-IQ basic income, and that is allowing private equity to invest in high-IQ kids in much the same way they invest in companies and other asset classes.

It would work like this: IQ scores for children are collected, and those who score really high (>140) would be listed anonymously on a special government database that is only accessible by firms who will pay the entry fee to see it. So it would not be visible to the general public unless you pay the fee. An entry for the IQ database could look like this:

# 5342 | Gender: M | Age: 5 | Verbal IQ: 140 | Spatial IQ: 160 | Tot. IQ: 150 | complete: 45% | Click Here to Sponsor

Upon sponsoring, the money would go into a trust fund that isn’t accessible to the beneficiary until later, presumably college. Like the Purdue plan, the investor would be entitled to a certain percentage of future earnings, and this would be determined by records held by the IRS, but unlike the Purdue plan the payouts would not come from the beneficiary’s salary but instead the government, similar to the high-IQ basic income proposal, but it could cost less due to external funding.

There would be a funding cap on each entry, as detonated by the ‘% complete’ column, which upon hitting 100% the child would be removed from the database. I imagine males with high spatial IQs would get funding the quickest, with women the slowest. Removing gender would make it more fair, but would make investors more hesitant to invest.

The program could be made more profitable by raising the payout threshold, so that instead of getting a certain percentage of any income, only a certain percentage of income above, say, a million dollars. If the threshold is high enough, some investors will lose money, making it a gamble like a high yield bond. Or by including lower-IQs into the database; however, rational investors would avoid them if higher IQs are available. There could be some combination of payout and IQ threshold based on income actuarial data, the risk preference of investors, and how much of a short-term loss the government is willing run in exchange for potential long-term economic value. If after 15 years the program has a net loss of, say, $5 billion, but the equivalent of five Googles, Amazons, Apples, or Facebooks are created, that’s a good deal, since those companies will pay taxes, making the program a net-positive indirectly. And these companies also create jobs, both directly and indirectly, and boost the overall US economy.

Related: Stanford’s Free Tuition

No Love For The High-IQ Basic Income

Yesterday I wrote an article defending MGTOW, which I later re-wrote because the original didn’t meet my quality standards.

It’s funny but not too surprising how some people get worked-up about the idea of a high-IQ basic income (and the topic of IQ in general), so much so that facts and logic go out the window, making it easy to counter the doubters because there is hardly any actual argument to counter – just emotion and popular leftist misconceptions about IQ that are easily refuted.

IQ is more important than many people want to believe/accept. In our increasingly competitive and technological economy and society, more than ever whether you succeed of fail/life outcomes seem to be influenced by IQ, with smarter people tending to rise to the top. The reality that some people by virtue of IQ are perhaps ‘better’ than others and therefore more likely to succeed is liable to provoke anger as this goes against the egalitarianism that teachers, culture and parents have brainwashed all too many into believing, and rather than accept these uncomfortable truths some people prefer to lash out at the messenger.

For those who don’t know, a summary of the high-IQ basic income and why I support it:

The high-IQ basic income is like a government Mensa that pays its members. It would cost less and have a higher ROI than a universal basic income (UBI). Depending on the requirements, only around 5% of the country would be eligible, so it would cost much less than a UBI. The advantage is that the money would have a higher ROI than a UBI because high-IQ people tend to be more productive and creative and therefore would put the money to use in ways that could boost the economy and improve society, such as starting businesses, coding, tinkering, producing art, and writing – activities that otherwise may not be possible if these smart people are too busy trying to make ends meet than thinking, thinking, and creating.

Some counter arguments I encountered:

Poor people tend to have lower IQs because they have less access to high-quality education, live in areas with higher pollution, the compounding effects of poverty, etc. Solving these problems with UBI and some other programs/policies would have a much higher ROI, no?

Not quite so, given the evidence that IQ is heredible, stable throughout life, and unmalleable. From Wikipedia:

Various studies have found the heritability of IQ to be between 0.7 and 0.8 in adults and 0.45 in childhood in the United States.[6][9][19] It may seem reasonable to expect that genetic influences on traits like IQ should become less important as one gains experiences with age. However, that the opposite occurs is well documented. Heritability measures in infancy are as low as 0.2, around 0.4 in middle childhood, and as high as 0.8 in adulthood.[10][20] One proposed explanation is that people with different genes tend to seek out different environments that reinforce the effects of those genes.[9]

A 1994 review in Behavior Genetics based on identical/fraternal twin studies found that heritability is as high as 0.80 in general cognitive ability but it also varies based on the trait, with .60 for verbal tests, .50 for spatial and speed-of-processing tests, and only .40 for memory tests.[6]

In 2006, The New York Times Magazine listed about three quarters as a figure held by the majority of studies,[21] while a 2004 meta-analysis of reports in Current Directions in Psychological Science gave an overall estimate of around .85 for 18-year-olds and older.[10]

And from Arthur Jensen’s infamous paper How Much Can We Boost IQ and Scholastic Achievement?, summarized by Wikipedia:

.[6] IQ tests are reliable measurements of a real human ability — what people generally describe as “intelligence” — that is important to many parts of contemporary life. Intelligence, as measured by IQ tests, is about 80 percent heritable. Intelligent parents are much more likely to have intelligent children than other parents. Remedial educational programs have failed to raise the measured intelligence of individuals or groups. Indeed, one of the most inflammatory sentences is the opener: “Compensatory education has been tried and apparently has failed.” The article generated extensive discussion and controversy both in the popular press[7] and in the academic literature

From Jensen’s paper, here are two passages that show how efforts to boost IQ through environment have failed:

The left keeps getting the cause and effect wrong. It’s like arguing that if doctors do enough circumcisions babies will eventually be born without foreskin.

Someone else counters:

you realize that one of the main reasons most people want basic income is specifically to provide for ‘other’ 95%… so that we don’t have to basically cull the population?
I am someone who is reasonably sure that I will be able to find gainful employment as long as such exists, but I have no illusions that my neighbors will just quietly starve to death with their families without causing me any undue inconvenience when I remain the only one on my block still able to afford food.
When such a scenario occurs, I can see only 3 general outcomes -
1) my neighbours burn my nice house down on my head, kill me and take my stuff
2) my private, just a bit less-starving or possibly automated, army kills them all
3) we all find a way to get them fed too even though the bother of proving them with the necessities of life is always going to be a net loss for me.
Of those 3 general outcomes, the third one seems less shit.
Tl,DR – Not arguing for UBI here, but any solution that provides for a mere 5% of humans is not a solution, it’s just epic fail. Our current system is already likely to provide for more than that.

A distinction must be made between a UBI, which is universal and without preconditions, and a ‘basic income’, which could have preconditions. A UBI has a much higher likelihood of failing than with preconditions, as I argue here. Inflation-adjusted entitlement spending keeps growing, and a UBI without preconditions would simply compound the existing spending problem.

I think most Americans, who will not qualify for the high-IQ basic income, will see the merits of the program rather than revolt. Most people accept that professional athletes, for example, make more money because they have a scarce skill that society finds valuable; having a high-IQ is also valuable and a scarce resource, and while there are more high-IQ people than professional athletes, the income allotted to each individual who qualifies under the high-IQ basic income would be much less than the paycheck that, say, Alex Rodriguez earns.

Others liken the high-IQ basic income to Nazism, but in all my reading I don’t recall the NSDAP having such a program. The Nazis were more concerned about racial purity than intelligence; second, the Nazis wanted purity – meaning expunging from society those who didn’t meet their strict standards. Our approach is much more humane – to create optimal socioeconomic environments for the cognitively exceptional – not to forcibly remove the less intelligent from society.

The Flynn Effect also came up as a rebuttal, as evidence for how environment can boost IQ scores. Not so fast. There is no actual consensus among the psychometrician community that the alleged rise in IQ scores is attributable to better test-taking ability or true gains in intelligence. It could be that people are getting better at taking the test due to better nutrition, but this does not prove their cognitive capacity (IQ) has increased. Kids who aren’t hungry will score better, which could explain why scores for the lower-end of the IQ distribution and in third world countries have risen, but this is not proof kids are smarter. They could just be operating at their full’ cognitive potential, instead of maybe 75%, thanks to a better environment.

There is evidence that the Flynn Effect has tapered-off in 1st-world countries, suggesting that a good environment will allow an individual to live to his or her full cognitive potential, but not exceed it:

The end of the Flynn effect? A study of secular trends in mean intelligence test scoresof Norwegian conscripts during half a century

The present paper reports secular trends in the mean scores of a language, mathematics, and a Raven-like test
together with a combined general ability (GA) score among Norwegian (male) conscripts tested from the mid
1950s to 2002 (birth cohorts c1935–1984). Secular gains in standing height (indicating improved nutrition and
health care) were also investigated. Substantial gains in GA were apparent from the mid 1950s (test years) to the
end 1960s–early 1970s, followed by a decreasing gain rate and a complete stop from the mid 1990s. The gains
seemed to be mainly caused by decreasing prevalence of low scorers.

There is some evidence IQ scores are actually declining:

British teenagers have lower IQs than their counterparts did 30 years ago

Tests carried out in 1980 and again in 2008 show that the IQ score of an average 14-year-old dropped by more than two points over the period.

Among those in the upper half of the intelligence scale, a group that is typically dominated by children from middle class families, performance was even worse, with an average IQ score six points below what it was 28 years ago.

The trend marks an abrupt reversal of the so-called “Flynn effect” which has seen IQ scores rise year on year, among all age groups, in most industrialised countries throughout the past century.

Flynn effect could also be endogenous, meaning that while IQs may be higher, IQ scores don’t rise throughout the persons’s life to suggest exogenous factors. This means Jensen’s argument about the futility of trying to boost IQ scores through intervention still holds. National IQ scores could be boosted through assortative mating, but environment-based programs for ‘first world’ countries are of limited effectiveness at boosting cognitive capacity and is the wrong approach. Environment will help an individual reach their full cognitive potential, but not exceed it, which is what the whole idea behind the high-IQ basic income is about. We already have the resources to challenge the cognitively average, but the cognitively exceptional are often underserved by society, especially in the public schools, where only a tiny percentage of the federal education budget is allotted to gifted programs.

The squandering of America’s most important resource, cognitive capital:

Screenshot taken from: Victims of Public Education By Donald Kordosky

Related:

The Great Debate: Automation, Jobs, Wealth Inequality, Basic Income, Post Scarcity