Why the US has done so well despite mediocre ‘national IQ’

I noticed this going viral: Emil O.W. Kirkegaard has published the November 17 update of his national IQ database with the latest scores.

As the tweet and related ones went viral, in the comments many were surprised that the US–coming in at 26th place with an IQ of only 97.73–has outperformed the smartest countries on the list. Despite a lower national IQ than, say, South Korea (103.84) or Singapore (108.70), the US continues to pull way ahead of the rest of the world, especially since Covid in terms of dollar-adjusted GDP gains, stock market gains, and innovation (e.g. LLMs and AI). Korea has no AI equivalents, unlike the US, which has at least five of the leading models.

This isn’t that surprising. National IQ gives an incomplete picture. For one, the US is vastly bigger and thus has a greater quantity of high-IQ people compared to those other countries. Second, the average is weighed down by large low-IQ populations. It’s similar to when pundits complain about the US ranking mediocre on academic proficiency surveys: America also has among the best-performing students in the world, too. Both extremes are represented, compared to the relative homogeneity of those tiny countries.

For example, if Silicon Valley or Manhattan were its own country, the mean IQ would be higher than the national average. Depending where one draws the lines, the mean IQ in America can be very high. But it’s not just IQ: America has all the other necessary ingredients for success. In spite of all the hate heaped against Trump and doom and gloom about tariffs, still, the US economy and stock market (S&P 500, Nasdaq, and DJIA) has outperformed everywhere else.

So why has the US pulled so far ahead? To expound on the points made in my 2024 post Why America is So Successful (and Wealthy) Compared to the Rest of the World:

Ownership society and the clear delineation of private property. Even in spite of the BLM rioting/looting, other countries do not enforce private property rights as well as the US does. The concept of private property is well enshrined in the American ethos, whereas elsewhere it’s more nebulous or not as well enforced.

Conditions conducive to growth, like low taxes and low regulation compared to elsewhere. Because American entrepreneurs have a lot of autonomy; they don’t have to worry about having their assets forfeited or businesses shut-down by autocratic overzealous governments, like in Singapore or China.

Cognitive capital. The US sucks up cognitive capital from the rest of the world and converts it into trillion-dollar tech companies and billion-dollar start-ups.

Less risk average, or so-called ‘animal spirits’. Americans are widely seen as more willing to take risks, especially compared to more risk-averse cultures like Korea and Japan. This means a fat right-tail in terms of start-ups and wealth creation that isn’t seen elsewhere, when combined with high IQ, leads to trillion-dollar companies, NVDA, and the best-performing stock index in the world, QQQ. You just don’t see this anywhere else to the extent as seen in America. China has risk taking, but even then, government controls are too onerous.

Low taxes and high wages. In the US, top bracket is around 37% for anything above $578k. But someone at that threshold would only pay 29% due to the progressive structure of the tax system. Many people are taken aback by just how little taxes high-income Americans pay compared to elsewhere. Due to higher wages, lower taxes, and employer-sponsored healthcare, Americans have more disposable income compared to other developed countries that have higher taxes but ‘national healthcare’, which isn’t such a great deal when offset by higher taxes, long waits, or elective procedures not covered.

Consumer spending and purchasing power. A population of 350+ million potential consumers, with high living standards and disposable income relative to other developed countries, means a lot of purchasing power. And of course, Americans love to consume, whereas the Japanese stockpile money.

Responsive federal government and central bank during crisis. During crisis, like Covid or 2008, all the stops are pulled to rescue the economy and infuse liquidity, helping to keep recessions brief and shallow.

Dollar hegemony. This helps attenuate inflation, and makes it easy for the federal government to stimulate the economy during crisis. The rest of the world has to play by America’s rules. The dollar is also the implicit ‘global unit of wealth’, such as for commodities. Contracts, like oil or natural gas, are settled in dollars. When an oil-producing country sells its oil, it’s paid in dollars, which means more demand for dollars and helps keep the dollar strong. This could fail if the US somehow collapses or disintegrates, or a global super-pac that somehow is able to bypass the dollar. These are so improbable as to not merit further consideration.

Rule of law. It helps that Americans, by in large, are law-abiding, viral footage of the occasional Apple store looting notwithstanding. Yes, there was unrest in 2020 in the aftermath of George Floyd’s death/overdose and in 2021 during the 6th Capitol protests, but these tend to be short lived, years apart, and contained. The BLM/Floyd riots were five years ago even if images of buildings burning have been etched in our minds. Meanwhile, elsewhere in the world, including ‘Westernized’ countries like Ireland or France, the protests are worse and more frequent. Some may be surprised to learn that many of these high-IQ countries like Hong Kong and South Korea have had many protests.

A literate and receptive population. This is good for economic growth and stability for two reasons: by respecting property rights; and second, by being receptive to calls to action, like “Buy now!” Reading a sales pitch requires some modicum of literacy. Multiply this by hundreds of millions of people and you’re talking a lot of consumption, as mentioned above.

Moreover, every problem that the US has is worse elsewhere, such as rioting/unrest (worse protests in Ireland and France), inflation (gas shortages in Germany and 11% inflation in the U.K. compared to 5% here), wokeness (people getting arrested in the U.K. and Germany for criticizing Islam), or housing shortages (homes are way less affordable relative to income in Western and Northern Europe compared to even the most expensive parts of the US).

So combine all of these, and it’s little wonder the US has done so well when its national IQ is otherwise in the middle.