IQ AND MONEY

__ _______THE WEEK (2007) May 13, 22

ARNST (2007) May 7, 92

In a meritocracy, one of the assumptions is that the smartest move to the top. Thus, very smart people get to the top because of effort, yes, but because of brains. That assumption is now being questioned again. David Letterman has an IQ of 103. That is just above average. So how come he has done so well?

First, as Harvard University professor Howard Gardner noted a quarter of a century ago, their are multiple talents. Roughly there are 5 and they are not mutually exclusive. The traditional IQ was to sort out those that would do well in school. However, it does not take into account the other

multiple intelligence. They are: 1) the disciplined mind 2)the synthesizing mind 3) the creative mind 4)the respectful mind 5) the ethical mind. By his categorization, one can see that each has a contribution,  but do not necessarily translate into money. For some of those talents, money is much less important to the point that they take a vow of poverty.

Lets compare Letterman who is very talented and very rich and discuss his skills. He is funny, he can recover very well from a bad joke that he just gave, his timing is excellent, he will  be able to read an audience, and he had the good sense to stop drinking when it got out of control. Letterman went to college and graduated with a C (2.2) he is tall and handsome and dresses to compliment his physique. He hit the comedy clubs, got some lucky breaks , did quiz shoes, cameoed in

a few movies, and then had a very late, late postmodern talk show where he three pumpkins off buildings.Finally, he and Leno fight it out every night for top ratings on their premier

late shows.

John Doe was the top of his class at a good midwestern university and quickly earned his degree in History. The PhD did not open many doors though as there is a great surplus of such people. He did some publishing and finally landed a job at a small college in the south. That's it. He wanted to go up the ladder, but positions were filled and his first job set him on the wrong trajectory to make money. Although his interest in early revolutionary American history was good, he did not go commercial. He was offered a book contract to discuss all the extramarital partners of all the presidents of the United States and speculate on whom may be gay. He turned it down.

In academia, that would seal his fate as a flawed historian. So he did look into conspiracy theories and how to debunk them, but so many books by lesser lights had already did that. Finally, he started doing book reviews for top history journals. No money came from that, so he did publish a book on a unique portion of history in his state. It sold 200 copies. His salary is $48,000 and his wife who is a librarian makes $31,000. Together, they are comfortable and had 2 children that attended good undergrad schools. His IQ is just about 145. There are very few people above him in intelligence and no one knows the history of the south in the 30's like this fellow.

Letterman has an IQ of 103 and Dr. John Doe ranks at 145. Who is the winner? Letterman.

Sociologists discuss how talent is also harmed or buttressed by physical appearance, color, social class, ability to communicate, an adaptable personality,health, sex, and countless other variables like neighborhood and family.They are called Life Chances.

In an analysis of random sample of 7,500 people found that a person with 130 was making  $12,000 more a year than an individual with an average IQ of 100. However, on balance, those with higher IQ's buy more. So, yearly salary is the only measure that appears to hold up .Relative to wage, each increase in IQ increases salary by $200 to $ 600.

Those CEO's with top salaries are likely to have slightly above average intelligence. See the Business Week archive for that one.