Here’s one possibility. There is an economic explanation for the Flynn effect, but not (just) the one Arnold suggests.
It’s that people are as clever as they need to be, and they respond to incentives.
A hundred years ago, there were no calculators and reference books were expensive. As a result, there was a big premium (in terms of both wages and status) on rote-learning and on being able to do long multiplication. People were therefore encouraged by schools to invest in such skills.
Today, though, the availability of calculators and reference sources mean there is no such premium on these skills. The incentive to acquire them has therefore diminished.
Instead, the premium today lies in the ability to interpret information, to tell stories and to see patterns.
The incentive to acquire these skills has therefore increased. And people have responded accordingly. The upshot is that the skills measured by IQ tests have risen, whilst the skills not measured – rote-learning and arithmetical trickery – have declined.
The Flynn effect is therefore (at least partly) the result of people reallocating their mental energies in response to changing incentives. It’s just substitution in response to relative prices.
But what evidence is there that intellectual abilities do respond to incentives? Here are three anecdotes.
First, in the film Lorenzo’s Oil, based on a true story, a man became a skilled pharmacologist in an effort to find a cure for his son’s rare illness for which there was no known cure. He found a useful therapy.
Second, a friend of mine has been threatened with a huge bill from Islington council for building works. In response, he’s become quite an expert on local government sub-contracting procedures and aspects of land law.
Third, a few years ago, I was watching TV news with the father of a friend, who was a test pilot for a civil airline. There was a report of an RAF plane crashing.
“No surprise there” said pop. “No-one in the RAF can fly properly.”
I raised an eyebrow.
“They’ve got ejector seats” he said. “No-one can fly properly with an ejector seat. Strap the fuckers in. They’ll learn to keep the plane in the air then.”
Maybe, then, intellectual energy does respond, at least partly, to incentives. Could it be that we over-estimate short-run responses to incentives (for example, to tax or exchange rate changes) but under-estimate long-run responses?