Written by: Stephen Hsu
Primary Source: Information Processing
I came across this nice discussion at LessWrong which is similar to my old post Success vs Ability. The illustration below shows why even a strong predictor of outcome is seldom able to pick out the very top performer: e.g., taller people are on average better at basketball, but the best player in the world is not the tallest; smarter people are on average better at making money, but the richest person in the world is not the smartest, etc.
This seems like a trivial point (as are most things, when explained clearly), however, it still eludes the vast majority. For example, in the Atlantic article I linked to in the earlier post Creative Minds, the neuroscientist professor who studies creative genius misunderstands the implications of the Terman study. She repeats the common claim that Terman’s study fails to support the importance of high cognitive ability to “genius”-level achievement: none of the Termites won a Nobel prize, whereas Shockley and Alvarez, who narrowly missed the (verbally loaded) Stanford-Binet cut for the study, each won for work in experimental physics. But luck, drive, creativity, and other factors, all at least somewhat independent of intelligence, influence success in science. Combine this with the fact that there are exponentially more people a bit below the Terman cut than above it, and Terman’s results do little more than confirm that cognitive ability is positively but not perfectly correlated with creative output.
In the SMPY study probability of having published a literary work or earned a patent was increasing with ability even within the top 1%. The “IQ over 120 doesn’t matter” meme falls apart if one measures individual likelihood of success, as opposed to the total number of individuals at, e.g., IQ 120 vs IQ 145 who have achieved some milestone. The base population of the former is 100 times that of the latter!
This topic came up last night in Hong Kong, at dinner with two hedge funders (Caltech/MIT guys with PhDs) who have had long careers in finance. Both observed that 20 years ago it was nearly impossible to predict which of their colleagues and peers would go on to make vast fortunes, as opposed to becoming merely rich.