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greyenlightenment  investments: META/FBL, TSLA, TQQQ, TECL, MSFT ...  1yr ago (greyenlightenment.com)   Edited 1yr ago   3024 thread views

Nassim Taleb is likely wrong about IQ and talent

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Good article. Taleb went from a wannabe-contrarian to a conformist. IQ matters and the evidence is overwhelming.

As an aside, I feel like you could have done a separate article exposing Taleb as grossly exaggerating his wealth, especially his claims to have traded his way to a fortune. Lots of charlatans out there and he always struck me as a potential one, and your article re-confirms my suspicions.

I feel like you could have done a separate article exposing Taleb as grossly exaggerating his wealth, especially his claims to have traded his way to a fortune.

I suspect this is true. Will look into it . I cannot find anyone to corroborate his claim as a trading expert as he purports to be.

One cause of the IQ-denier (and extending beyond that, denial of racial differences in IQ distribution) fallacy / fantasy is assortative socializing.

Lots of top-tier VCs don't subjectively think IQ is a strong selector because -- by the time a founder gets to Series B, they've been pre-selected for high IQ (1).

Lots of CEOs don't subjectively think IQ is a strong selector because -- by the time they interview someone for an executive position, that person has already been successful and thus has been pre-selected for high IQ.

You don't even have to be that high up. If you're an engineer at Google, your friend group and work group are probably all people who are fairly high performing individuals. So you might notice that there are fewer black people in that group, but the black people that you do interact with probably feel about as smart as everyone else (2)

Conversely, in my experience, if one talks to ER doctors, cops, public school teachers, or other people who are exposed to relatively large and relatively random slice of society, and one is really careful not to use the words IQ and wait until they've had a couple drinks, each of them will readily attest that some people are just plain smart and some people are just plain dumb.

1 - Or at least high enough to come off as quite smart in a superficial conversation not in one's domain.

2 - Not really true when I talk to non-woke people, but for the woke, at least smart enough that it's easy for them to dismiss any differences as those of education or environment, etc.

It's very obvious that Taleb is wrong about IQ. One can immediately see that those with very low IQ, with mental disabilities like Downs Syndrome and similar, are not capable of earning high income. I've met people who are very capable in verbal and mathematical domains, it's pretty obvious that their intelligence is general, that it extends out to everything. They're earning high incomes too.

One can immediately see that Taleb's own chosen chart comparing income to intelligence shows that they are positively correlated. And there's a gigantic confounder in that 'income' from Zalorsky 2007 includes welfare payments, artificially propping up the incomes of the poor/low-IQ. Even so, the paper still concludes that IQ is positively associated with higher income. Taleb just brushes off that conclusion saying that there was suspicious data selection and that he'll do his own study later.

https://medium.com/incerto/iq-is-largely-a-pseudoscientific-swindle-f131c101ba39

Note that he's writing on medium, not an academically rigorous outlet. I read an article there claiming that Musk's twitter profile pic of a fork in the road meant that the Bitcoin he bought was actually BSV, a fork of bitcoin.

https://miro.medium.com/max/828/1*Txc8Deu_EEM7pH7ZL0k4cg.webp

Taleb's claim is that IQ is meaningful for lower than average but not higher than average values

Taleb is right in probably a strict sense — there is diminishing marginal returns to intelligence if the standard of success is wealth.

For any given task, I would expect ability = f(IQ) to be a logistic function, because everything is a logistic function.

Income is a result of supply and demand.

IQ is by definition a normal distribution, which defines what the supply is.

But, what's the demand? If there just aren't many tasks (relative to supply of smart people) where the linear region is at or above say IQ=150, then increasing IQ above 150 shouldn't increase income.

if you want to want to be a billionaire before 35, it seems like a preq. having an iq above 150. Look at the founders of Google, Facebook, etc. It was like this in the late 90s too except put the cutoff at $100 million and instead of apps it was websites, IT. If you want to completely master a new and complicated technology at an early age, i don't see how there is an IQ ceiling.

I've not seen a study that doesn't top out too low to confirm or refute that.

Why do you think that?

Probably because very high levels of intelligence correlate with interests that aren’t super compensated in a pecuniary sense (eg pure math). Being 130 IQ with a great work ethic and not super interested in technical skills might play better than 145 IQ.

which would be true in a society that does not have division of labor or social stratification, which excludes every modern society. Even in antiquity smarter people were valued or had higher status, such as politicians, priests, generals, etc.. A comatose person has an IQ of zero. Yes, when taken to its extreme Taleb's argument is correct. To say that high IQ only measures test-taking ability ignores that such skills correlate in almost all aspects of life in which technical ability is an asset. People who score below 20 on the wonderlic, corresponding to an IQ of < 100, will almost always do worse at g-loaded activities than those who score above 30 (IQ above 125). It sucks that it is this way it is. It would unlock a lot of economic growth and productivity if IQ 100 people can be trained, at no added cost ,to do what 130 IQ people can do, but this does not seem to be the case.

And there's a gigantic confounder in that 'income' from Zalorsky 2007 includes welfare payments, artificially propping up the incomes of the poor/low-IQ. Even so, the paper still concludes that IQ is positively associated with higher income. Taleb just brushes off that conclusion saying that there was suspicious data selection and that he'll do his own study later.

Good point.

Taleb doesn’t have any skin in the game when it comes to IQ so we can safely discard his opinions

Who does have skin in the game and disagrees with his claim?

[ I agree he’s mostly wrong, but afaik, your heuristic for why isn’t very useful ]

I’m just being tongue in cheek because Taleb always harps about ignoring experts who don’t have “skin in the game” (something to lose if they are wrong)

Registering a bit of funny before finishing the article "Got rich writing mediocre books"; said the author of a blog that after much striving has reached sub-par.

I assume that dishing out requires taking, re. sneering.

Taleb himself is wholly incapable of taking it, though: he's got the thinnest skin on Twitter and embarrassingly rationalizes his preemptive ego defense as "alpha moves".

You don't have to be Shakespeare to have a valid opinion on whether a piece of writing is good or not, any more than you have to be Gordon Ramsay to have an opinion on food, or be Roger Ebert to say a movie is bad.

This is someone who calls everyone who he disagrees with an idiot or imbecile, even after blocking the person. So it's sneering but only in reciprocation of his own sneering. The books were alright, hence mediocre. Mediocre does not mean bad. The concept of second-order effects of harm long predates those books, yet he's trying to act like he invented the idea.

Working link here: Nassim Taleb keeps being wrong about IQ

I am going to link to this post as well because it's related and expounds on the above [Refuting common arguments against IQ and talent

](https://greyenlightenment.com/2022/07/13/refuting-common-arguments-against-iq-and-talent/)

Arguments alleging the unimportance of IQ or low correlations between innate factors and outcomes, have two flaws, those being such arguments ignore individual preferences and conditional probabilities. If you want to be good at something, you are going to be competing against other people who also aspire to be good at that very thing, not just people plucked at random. "Goodness" also means relative ability, not only absolute ability/improvement. If you go to gym and lift weights, it's reasonable to assume you will get stronger or stronger compared to someone who has never lifted, but eventually you'll want to know how good you are relative to others, too. If you want to be better relative to other people, this means having to compete against people who may have more aptitude for that very thing you are trying to get better at. In the case of weightlifting, this means people with a more favorable bone structure, favorable muscle insertions, or more fast-twitch muscles. Running? That would be lactic acid threshold, VO2 max, etc.

Correlations do not mean as much as people think they do and are misleading. When you analyze large groups of people, you tend to get low correlations. Short people can succeed at basketball, even in the NBA, but they face much more insurmountable odds compared to tall people. Most tall people do not play in the NBA (the correlation between being over 6 ft 6 and playing professional basketball is indeed small) but if one aspires to play in the NBA, being tall is pretty much a prerequisite despite this low correlation. Same for the correlation between wealth/income vs. IQ, which is low, but it's not like all high-IQ people aspire to high-paying professions. Some are writers, performance artists, painters, or don't want to move up the corporate ladder.

Of course there are benefits of doing things even if one does not aspire to being competitive. The health benefits of exercise may make it worthwhile in and of itself, even if you never get that good at it.

Successful, high-status people are not just good at things: they are good relative to other people too, which matters more. It's like great, I can do math at a 6th grade level; yes, this a major improvement over a 1st grade level, but this is not good enough to get hired at NASA. A 160 on the LSAT is an improvement over 140. Will that get you into a top law school ? likely not (unless everyone else also scores as poorly or worse). Just getting better at something is not good enough. If I sold a course promising a 20-point improvement on the LSAT, a lot of people would be interested, only to feel let down when they learn that this 20 point improvement is compared to guessing.

Second, the alleged low correlation between job performance and IQ is conditional on getting the job. Being hired typically involves two screening stages: sending the resume/inquiring about the job, and if successful, an interview. For good-paying jobs, the screening process means that people with low or average IQs are often weeded out. Likely there is a major cliff in competence between someone with an IQ of 95-100 vs 115-120. So employers want to ensure they are choosing from a pool of applicants who have credentials that correlate with at least + 1-sigma of IQ. But the 130-140 IQ guy may not be much better than the 120 guy, but the 120 guy is waaay better than the 95 guy.

My contra-argument to this would be that more strength has no value in the modern society. You need some strength to do most activities but as we have different power-tools, average worker is as much productive as the Olympic level athlete. And even if it would matter, the strongest man is only marginally better than an average male (in good physical health and training status). The group work is more important than individual strength since immemorial times. Even in stone age hunting mammoths required teamwork more than brute force.

Intelligence however is very different from physical strength. Maybe it has more value in the modern society. Again, some geniuses may make important discoveries that can benefit us all. But that may be very unpredictable and hard to measure anyway.

Taleb doesn't say that IQ doesn't matter at all. Definitely some people are smarter and therefore more successful. But the correlation of IQ with success probably maxes at certain limit.

Intelligence however is very different from physical strength. Maybe it has more value in the modern society. Again, some geniuses may make important discoveries that can benefit us all. But that may be very unpredictable and hard to measure anyway.

It's possible, although imho very unlikely, advances in AI will render human intelligence redundant.

Taleb doesn't say that IQ doesn't matter at all. Definitely some people are smarter and therefore more successful. But the correlation of IQ with success probably maxes at certain limit.

It does not matter much if you don't control for individual preferences or job screening. But people tend to compete against each other, such as for job openings or credentials (like grad school or law school). If I want to be a top physicist or mathematician or whatever, I am going to have to compete against the 130+ IQ guy, not the 90 IQ guy. It maxes out at a low threshold if one preference's are aligned in such a way that a high IQ is not an asset, such as a 120+ IQ person at working at fast food and refusing all promotions and never changing jobs.

Just an interesting observation from my pharmacist class in the UK. The biggest earners now are those who did average or even were on the verge of failing. It is just my anecdote. Obviously you need to be smart enough to pass the exam to get a licence. But once you pass this bar, in real life to be on top of academic knowledge is less important than perseverance and drive to succeed and social skills. IQ tests do not measure these things.

I have reason to doubt that the studies showing IQ correlation with success are true. It is very difficult to get clean data and eliminate bias. Just see how hard it was to prove that masks are/are not effective in containing covid. Scott deeply delved into this issue but got it wrong – final Chinese experience shows that masks are useless for all practical purposes (outside some very strictly controlled environments, like hospitals) and we were fooling ourselves with mask mandates (still current in some places in Europe). Probably studies with IQ are similarly unreliable. My trust in them is very low.

I’m very against masks (always thought evidence was insufficient to move past priors and believed there were huge downsides). Can you share the Chinese studies though? Would be interested in reading those.

There is no Chinese study I would trust. I based it on observation of great number of infected. It appears that the current Chinese wave is due to lifting lockdown restrictions but from the data Zvi has provided, it seems the opposite. The number of infected was rising and the government realized that it makes them look stupid and they decided to lift lockdown to shift the blame.

Going back to more reliable data – I remember that article on marginalrevolution.com where they showed that good data doesn't need complicated statistics to show that vaccines work. The graph of infected without vaccine was clearly so different from the one for recently vaccinated. It seemed so convincing. And yet, now we know that this conclusion was wrong. The vaccine protection from infection didn't last long, only 3-4 months on average. It might be protecting from severe disease and death (by about 90%) but that wasn't what this graph was trying to prove. It turns out you need a good and thorough statistics and study design even for things that seem obvious.

As a pharmacist I was trained to back up all my assertions by evidence. If you give a recommendation to the patient or a doctor to use a specific drug, they might always ask – what is the evidence? I should be able to answer this questions without delay. But when the masks started to be recommended, the best evidence I had seen was Scott's article. When I tried to ask doctors and others if they have more evidence about effectiveness about masks, they said that you don't need evidence for parachutes. The many reversals in this pandemic showed that many things that initially seemed like parachutes were not like them, therefore the question about evidence remained.

In the UK we usually rely on NICE guidelines. Not all evidence is of equal strength but NICE as the organization put a lot of effort to evaluate and list all available studies for given intervention. I am in favour of regulatory barriers for all new medicines. The only problem is that the regulatory process is too slow and might fail us during pandemics when quick decisions are required. I know that Scott is very critical of regulatory institutions but I cannot share his criticism because pharma companies try to push too many costly medicines with only a marginal benefit (especially for cancer). Sometimes even regulators make mistakes and approve doubtful medicines (like aducanumab) but they err on the opposite side – not approving useful drugs – only in very rare cases. I can only agree that the regulatory process is too slow, cumbersome and inflexible in some cases but the main service they provide is very important.

During covid pandemic nothing of this seemed to matter. Regulators were disregarded, politicians introduced measures without any proof of effectiveness. They even introduced vaccine mandates that we were previously taught to be a bad policy. My native country bought too many vaccines and now they are donating them to poor countries – again we were taught this to be a bad policy. Those countries most likely simply destroyed the donated vaccines. Usually it works much better to donate money so that they can buy what they need and not the excess stock. Other countries are unable to accept donations of medicines because they usually are not in the form their doctors are trained, they might not have labels in their local languages, they might not use the particular brands or strengths and supply chains might not be appropriate. For example, Pfizer had mRNA vaccines to be stored in -70°C. Then they made another variant that could be stored in -20°C, and then again another one to be stored in fridge (2°–8°C). The options in poor countries are more limited and if they have settled for one specific cold chain, all other vaccines that need a different conditions will never make to final recipients. This distribution is hard. We learned this when lockdowns disrupted our supply chains in the west. In poor countries supply chains are even more fragile and simply donating medicines have very little benefit if we don't consider how they will fit in their supply chains. But that didn't matter for politicians, they only needed to save their faces and pretend being good humanitarians.

But the correlation of IQ with success probably maxes at certain limit

Doesn't the graph /u/greyenlightenment embeds in his post suggest otherwise? Unless the limit is above 99.9%?

I agree with that. I should have replied to the OP. It had no text and it made me confused where to put an answer and I pressed the wrong reply. Sorry for that.

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