Cognitive ability, economic power, politics and policy

Some research indicates that American politics and policy are more heavily influenced by special interests and people with high income than public opinion. In short, wealth appears to be more important than either public opinion, or social or environmental needs.

A 2023 research paper looks to see if there is a link between cognitive ability and high income based on data from a military test of men in Sweden: 

The plateauing of cognitive ability among top earners

Are the best-paying jobs with the highest prestige done by individuals of great intelligence? Past studies find job success to increase with cognitive ability, but do not examine how, conversely, ability varies with job success. Stratification theories suggest that social background and cumulative advantage dominate cognitive ability as determinants of high occupational success. This leads us to hypothesize that among the relatively successful, average ability is concave in income and prestige. We draw on Swedish register data containing measures of cognitive ability and labor-market success for 59,000 men who took a compulsory military conscription test. Strikingly, we find that the relationship between ability and wage is strong overall, yet above €60,000 per year ability plateaus at a modest level of +1 standard deviation [individuals in the top 16% of cognitive ability*]. The top 1 per cent even score slightly worse on cognitive ability than those in the income strata right below them. We observe a similar but less pronounced plateauing of ability at high occupational prestige. 

* The intervals within one standard deviation above and below the mean account for 34.1% of the population. Therefore, approximately 68% of the population is located within one standard deviation above or below the mean.

Do the highest earners and those with the most prestigious jobs indeed have the greatest minds? Elite jobs are of special interest, for two reasons. First, income distributions have strong right skew. In all Western countries, top income shares have been steadily rising since the 1980s, with the 1 per cent highest earners receiving 9 per cent of national income in Sweden and even 20 per cent in the United States— excluding capital gains (Piketty, 2014; Alvaredo et al., 2017; Statistics Sweden, 2020). This extremity of top incomes as well as their public salience render it crucial that they be earned by very capable individuals. Second, those with the most prestigious jobs wield the greatest economic and political power, and the intelligence of their decisions is consequential.

The present paper departs from prior work by swapping the axes, focusing on the relative intelligence of those with better jobs. .... In other words, we hypothesize that there are starker ability differences between adjacent ranks at moderate levels of income and prestige than at the highest levels. Our argument draws on the role of two key non-meritorious determinants of occupational success: Family resources and luck. The class- and network-advantages of those with elite family backgrounds are assumed instrumental for gaining access to the most privileged and best-paying jobs (Bourdieu, 1984; Lamont, 1994; Rivera, 2015; Friedman and Laurison, 2020). Second, rich-get-richer processes are assumed to allow inequalities in job success to grow between those who got a lucky break early in the career and those who did not (Merton, 1968; DiPrete and Eirich, 2006; Salganik, Dodds and Watts, 2006; Bol, de Vaan and van de Rijt, 2018). Our argument relies on these two determinants of occupational success, family resources and luck, having distributions in which extremely high values are common (Denrell and Liu, 2011; Frank, 2016). Because extreme ability is rare, extreme occupational success is more likely driven by family resources or luck than by ability. Hence, at higher levels of occupational success additional degrees of success will be less and less associated with greater ability.

While ‘cognitive ability’ lacks a generally agreed upon definition, it is broadly used to indicate the capacity of the brain to perform a variety of cognitive tasks, including verbal understanding, technical comprehension, spatial ability, and logic (Borghans et al., 2016). Such skills are thought to be partly learned, partly genetically determined, and partly acquired through interaction between genes and social environments.

Achievement tests such as the Armed Forces Qualifications Test (AFQT) have been found to correlate more strongly with wages than tests of general intelligence (IQ) as the former capture closely related personality characteristics also relevant for job-market success (Fischer et al., 1996; Borghans et al., 2016).

To the best of our knowledge, there are no empirical studies that systematically probe cognitive ability at different levels of occupational success. Several studies have looked at traits of highly successful people. Wai (2013) uses elite US college attendance as a proxy for extraordinary intelligence based on the logic of very high SAT score requirements for elite college entry. He finds that roughly 40 per cent of Fortune 500 CEOs, federal judges, billionaires, and Senators have elite college degrees. However, high school grades and achievement tests have been found to be significantly impacted by other factors besides cognitive ability such as family background and personality traits (e.g. Borghans et al., 2016). Several studies find that top jobs in the private sector are not characterized by excessive cognitive ability.

That data and analysis suggests that cognitive ability does correlate with high income and prestigious jobs, but also that luck and family status are often important. A recent USA Today article comments about the role of being born rich:

You don’t have to be born rich to be rich but it sure helps.

For the first time since 2009, none of Forbes World’s Youngest Billionaires under 30 are self-made this year. The billionaires under 30 all inherited their wealth, which Forbes reported is due to the self-made ones aging into their 30s and the start of the “great wealth transfer.”

The annual list named a few people who built their own wealth, but they top the age of 30. They include Snap co-founder and CEO Evan Spiegel (33), Gymshark co-founder and CEO Ben Francis (31) and Oculus VR founder Palmer Luckey (31).

 Clearly, luck sometimes plays a role in economic success and accumulation of wealth. That seems to be unrelated to cognitive ability. But in America’s pay-to-play political system, it is the money that counts, but the cognitive ability of the person who buys politicians and policies. Those policies are usually favorable to the person (or interests) who pays for them. That usually happens with little or no concern for adverse impacts on the public interest (including the environment) or even democracy and the rule of law. Money alone is truly a powerful political force with limited to nil moral concerns, regardless of the cognitive ability of the people and interests buying what they want.