Recent research suggests that economies perform best when their social diversity is in an intermediate range, not so high as to undermine social trust and cohesion, and not so low as to inhibit innovation and complementarity of skills.
Although this effect has been known for some time, a new confirmation of it has come from studies of genetic diversity within human populations and its relationship to economic development.
Recent quantitative studies in human population genetics have shown that human genetic evolution did not stop in prehistory, but has continued at a rapid pace throughout history. For instance, in a study published in the Proceedings of the National Academy of Sciences of the USA, John Hawkes of the University of Wisconsin and others concluded, based on the 3.9 million HapMap SNP dataset, that human adaptive evolution has not only continued, but has actually accelerated in the last 40,000 years.
Macrogenoeconomics is the study of the two way interaction between human evolution and the long run economic performance of human societies. In a recent NBER Working Paper, Quamrul Ashraf of Williams College and Oded Galor of Brown University, have surveyed the current state of research in this field.
Ashraf and Galor have studied the economic impact of the variation in the composition of human genetic traits as they have evolved during the exodus of Homo Sapiens from their ancestral home in East Africa and their dispersal to Asia and beyond. Greater migratory distances from the East African cradle result in lower genetic diversity within populations, and this has induced a persistent variation in development outcomes, that shows up as a hump shaped curve in the relation between development and diversity. An example is reproduced below from Ashraf and Galor’s 2013 paper in the American Economic Review, and it shows population density in 1500 CE plotted against genetic diversity.
Ashraf and Galor write that
this line of research suggests that migratory distances from the cradle of mankind in East Africa to indigenous settlements across the globe diminished their levels of diversity and, thereby, generated a persistent hump‐shaped influence on development outcomes, reflecting a fundamental trade‐off between beneficial and detrimental effects of diversity on productivity at the societal level. Although diversity may reduce interpersonal trust, cooperation, and social cohesiveness, and can thus adversely affect the productivity of society, complementarity across diverse productive traits may stimulate innovations and gains from specialization, and can thereby contribute to society’s economic performance.
Ashraf and Galor have also shown that the effect of genetic diversity on productivity holds even in contemporary societies. Diversity has a positive effect on innovative activity, as measured by the average annual per capita number of scientific articles from 1981–2000, and also a negative effect on the degree of social cohesion, as measured by survey data on interpersonal trust, collected over 1981–2008. High diversity can also cause civil and ethnic conflict, and may lead to autocratic governance that rises as a coping mechanism for such conflicts. On the benefit side, genetic diversity leads to productivity enhancing division of labor by widening the spectrum of skills and abilities.
The findings reported here are controversial. They have been challenged on the grounds of methodological bias, as well as data inaccuracies. But most of all, critics have worried that the scientific study of human genetic diversity can fuel dangerous policy ideas along the lines of eugenics and dysgenics. Unfortunately, the science can hardly be wished away, and crafting wiser policy ideas is likely to be a better course than banning genuine scientific research.