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Genoeconomics: An Ideal Societal Genetic Recipe for Economic Prosperity?

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In an interesting academic scuffle, a pair of economists claim to find a societal genetic recipe for economic prosperity. Brown University's Oded Galor and Quamrul Ashraf of Williams College, writing in American Economic Review, argue that the ideal conditions for wealth include striking a balance between high and low genetic diversity.

A report by the journal Nature summarizes:

The paper argues that there are strong links between estimates of genetic diversity for 145 countries and per-capita incomes, even after accounting for myriad factors such as economic-based migration. High genetic diversity in a country's population is linked with greater innovation, the paper says, because diverse populations have a greater range of cognitive abilities and styles. By contrast, low genetic diversity tends to produce societies with greater interpersonal trust, because there are fewer differences between populations. Countries with intermediate levels of diversity, such as the United States, balance these factors and have the most productive economies as a result, the economists conclude.
Other scholars hit back and warn that thinking this way is not only ill-founded but dangerous, potentially "misused with frightening consequences to justify indefensible practices such as ethnic cleansing or genocide." This indeed sounds like a sensible warning except one of the scholars doing the warning about science determining public policy is Harvard's Daniel Lieberman, famous for supporting NYC's jumbo-soda ban on the grounds that "We have evolved to need coercion." Note to self: Send Lieberman a free review copy of The Magician's Twin: C. S. Lewis on Science, Scientism, and Society.

Yes, the whole subject of so-called genoeconomics is fascinating but it doesn't just cut in one direction. Three words seem to refute the claim that genetic diversity in a country leads to greater innovation: Japan, South Korea, and Israel.

Having the right intelligent people in the right place in a society with economic freedom and rule of law is plausibly linked to prosperity. However, since economists can't even seem to agree on obvious matters (such as the problems with price fixing) the idea that somebody is going to find the genetic recipe for wealth creation appears less dangerous than simply preposterous. Again, two words refute it: South Korea, North Korea.

Image credit: "Tel Aviv: view from our balcony," Alexandra Zubritskaya/Flickr.