The rise of the smartocracy

Key Insights:

- IQ is a strong indicator of eventual earnings - both internationally and in New Zealand

- Studies show an average increase of 0.3 points of IQ every year

- Some contend that modern media is increasing our cognitive skills

- Increasing cognition challenges marketers to find more sophisticated measures

It's funny how things turn out. When British sociologist Michael Young coined the term 'meritocracy' half a century ago, he was describing a fictional dystopian society. The meritocracy, like the aristocracy it was succeeding, saw wealth and power concentrated in the hands of a few. The difference was this new elite hadn't inherited their right to be there, they had earned it—in their eyes, legitimising the greater inequality.

Today, the term meritocracy has lost its pejorative connotations.

Politicians, executives and social observers see advancement by individual merit—instead of circumstances such as gender, ethnicity and socioeconomic background—as the ultimate form of democratic justice. US commentator John Derbyshire almost gushes that the meritocracy of his country is "

we've ever seen".

Well, maybe. There are all kinds of merit: creativity, honesty, charm, mental discipline, self-control, the ability to collaborate and the ability to lead. By far the most common merit—or at least the most measurable—is intelligence. And the meritocracy is hard at work creating a new stratification of society based on brainpower. This is the smartocracy.

Derbyshire frames his definition this way: "If you pluck a hundred rich men from their castles and put them in a room together ... you will notice a high level of general intelligence. Contrariwise, a hundred poor men taken from their gates will, if put all in one place, convey a general impression of slow dullness."

More and more, the bigger earners are generally the more intelligent and the income rewards for those with high intelligence are becoming more pronounced by the year (even if, as Derbyshire points out, we're often loath to admit it because intelligence seems so undemocratic—like an aristocratic title, intelligence is largely inherited from our parents).

In a study spanning 15 years, Charles Murray, co-author of 1994's controversial book The Bell Curve, examined the financial fates of 12,686 adults in their late twenties and early thirties and weighed it against their IQs. To make his data intelligible, he broke the participants into five cognitive classes.

There were the people classified as having a normal IQ, ranging from 90-109. This stratum accounts for 50 percent of the US population. To the right of the so-called Normals on the bell curve are the Brights.

They have IQs ranging from 110 to 119. This IQ range, says Murray, includes many of the "most successful Americans".

Further to the right are the Very Brights whose IQs are 120 and above. Murray is quick to point out that an IQ in this bracket is "not necessary to become a physician, attorney or business executive" but excellence in the skills that can be calculated by IQ tests gives these people a professional edge.

To the left of the Normals are the Dulls, as Murray calls them. They have IQs from 80 to 89. Beyond the Dulls are the Very Dulls, with IQs from 70 to 79.

In the early years of the survey, the different strata are largely on an even footing. Indeed, in the low-skill labour market occupied by unqualified workers such as school leavers and university students, the income of the Dulls and Normals is higher than that of the Brights or Very Brights. However, as the Brights, the Very Brights and some of the Normals come out of higher education and hang up their waiters' aprons, a very different picture begins to emerge.

By the end of the 15 years, the different strata are clearly separated. The Very Dulls are earning 73 percent less than the Dulls, who are in turn earning 62 percent less than the Normals. The Normals are earning 29 percent less than the Brights and the Brights are earning 33 percent less than the Very Brights.

Debate has raged over these data ever since they were first presented. It rails against our belief that opportunity is essentially equal. It's difficult to accept that our economic fate is largely preordained at birth. Not to mention that IQ tests assess just one kind of intelligence—they cannot measure social intelligence, for example, which is critical to success in most professions. They test the verbal and visuospatial capacities of the participant; in other words, their mental quickness.

The most common competing explanation for the correlation between income and IQ is socioeconomic background. But even between siblings with identical upbringings but different IQs, the income gap is apparent. At the conclusion of the study, a subject with normal IQ was annually earning US$11,500 less than his or her Very Bright sibling. And this is at a young age, well before income peaks.

In New Zealand, a study by the University of Auckland released in September 2008 by the Ministry of Education showed the average (equivalised) income gap between families with parents with no educational qualifications and those with secondary education doubled to over $10,000 between 1981 and 2006.

But trends are trends, not absolutes. Murray and his partner, the late Richard Herrnstein, explained that by "mathematical necessity", a large majority of smart people throughout history have been occupied in mundane tasks. It could be that an English peasant was every part Stephen Hawking's scholastic equal but due to extreme social and economic class systems he wouldn't have had the opportunity to demonstrate or be rewarded for his abilities.

"So it has been from the beginning of history into [the 20th] century," they say. "Then, comparatively rapidly, a new class structure emerged in which it became much more consistently and universally advantageous to be smart."

Today, there are many careers that also defy the pattern. Professors, for example, typically draw their ranks from the top ten percent of IQs, but rarely earn as much as a middle management type. Sports stars, on the other hand, come from all IQ echelons. Michael Phelps, the US Olympic swimming sensation, was expected to collect average $50 million in endorsements each year for the four years following his record medal haul (before a stupid encounter with a bong pipe). This would require him to have an astronomical IQ if income was based on intelligence alone.

And Paris and Nicole make a case for socioeconomic background, reminding us on reality show The Simple Life that intelligence is not always a prerequisite for fame and wealth.

But on the whole, we've been watching the smartocracy unfold for some time. For decades the conventional wisdom has been that pop culture is slowly dumbing down the masses—that what we want from our entertainment is simple pleasures that contrast with the rapidity and complexity of our professional and social lives, and that mass media have been more than happy to oblige by pandering to our baser instincts.

Enter Steven Johnson. In his 2005 book seductively entitled Everything Bad is Good for You, Johnson argues that, on the contrary, pop culture is making increasingly greater demands of our cognitive skills.

Among numerous examples, Johnson uses side-by-side comparisons of old and new prime time television dramas to illustrate his point.

The 1970s drama Starsky and Hutch follows the adventures of the two lead characters. In a typical episode, they're presented with a crime (and an opportunity for Hutch to execute his trademark slide across Starsky's car bonnet) that's resolved within 60 minutes. The only narrative deviation is a comic subplot introduced in the first few minutes and only referred to, or resolved, in the last few minutes.

Since then, narrative complexity has been increasing dramatically. The Sopranos, for example, followed the subplots of 20 different characters. Each subplot is important in understanding the episode, the season, the series or the character as they develop, and many scenes connect different plot threads together at the same time. It's called multithreading, and keeping track of all these divergent plots and characters is only one of the intellectual demands made of us. There's also narrative ambiguity, which requires us to fill in information that is obscure or deliberately withheld.

And it's not just taking place on shows like The Sopranos. Consider the cartoon Family Guy, which the programme guide warmly warns viewers is "politically incorrect and slightly twisted". Each 30-minute show contains only two narratives that are largely self-contained and episodic, but much of the humour routinely requires viewers to be well versed in pop culture. "It'll make you smell like Elizabeth Taylor," says young character Chris of a perfume. "I guess that means you'll smell like bourbon and Vicodin."

As Johnson says, there's a subtle but important "difference between intelligent shows, and shows that force you to be intelligent".

The proof is in the cognitive pudding. Johnson says our habitual use of intellectually demanding media like video game Grand Theft Auto is one of the accelerants behind what's called the Flynn Effect. Named after University of Otago professor James Flynn, it describes how IQs around the world have beenincrementally increasing. The reason 100 has remained the average for over a century is that IQ tests are frequently mediated to keep the average score the same.

"We don't have good New Zealand data," says Flynn. "But it seems to be close to US trends, which show a gain of 0.3 IQ points per year. So if today you took a test normalised in 1999, deduct three points from your score."

In other words, a person who scored 100 on an IQ test in 1969 would score 88 today were he or she to be transplanted without the intermediate consumption of intellectual stimuli beamed from the idiot box every night. The average citizen of Victorian England would not today be considered mentally fit (and by the start of the next century, it could be speculated, neither would we).

It should be noted that Flynn's latest research has uncovered an anomaly, indicating that the IQ of 14-year-olds in the UK has been decreasing by 0.07 points per year. Interestingly, the IQ of kids aged five to ten is increasing by more than usual, at 0.5 IQ points per year. For the rest of us, nothing has changed.

What's interesting is what happens between the segments of the TV shows: advertising's 30-second spot. By and large, it has existed outside of Johnson's theory: today's dynamic entertainment has evolved from its humble linear origins, but branding hasn't come far from telling Virginia Slims buyers they've come a long way, baby.

The result is a growing subset of consumers that marketers call Brand Sluts. The quasi-satirical term was coined by savvy trendspotters such as Marian Salzman to describe an increasing number of equally savvy consumers who are no longer wooedby branding's tired gimmicks. Instead, these consumers flit from one brand to the next, depending on which is making the best proposition at the time.

There are several other compelling factors catalysing the Brand Sluts trend. One, as Salzman put it this year, is that any startup can begin looking and behaving as a brand. All they need is a little daring, some templates found on the Internet and a jazzy name.

The consequence is brand inflation: as the volume of brands goes up, the value of branding decreases. Brands acted as stamps of authenticity and reliability, but as increasing numbers of advertisements compete for the consumer's dollar by promising more but delivering much the same, the impression is cheapened. Brands become little more than juggling buskers competing for our attention on the main street of the global village.

Furthermore, advertising is almost an anathema to narrative complexity. When the viewer's attention is frequently broken by a quick succession of 30-second spots, it's difficult to maintain the concentration required to better understand intricate material. Deadwood ran for three acclaimed seasons on the US's subscription-based, ad-free HBO network, but failed to survive beyond one season on ad-funded Kiwi channel Prime.

Brand Sluts are in many ways the children of the smartocracy. They're where the fabric that meshes marketing and culture frays as we become more smartocratic. In short, they're intellectually outgrowing TV commercials and rely less on their pointed emotional cues to help them make choices in an era where better information is so widely available elsewhere.

It doesn't mean advertising is going the way of the dodo. It means that where and how marketers reach increasingly intelligent and elusive consumers is changing. This is borne out by the numbers: by the end of this year, for example, online ad spend will surpass that spent on traditional TV advertising.

It would be premature to pronounce the full evolution of the former -cracies into the new smartocracy but it would also be foolish to ignore it. The emergent smartocracy asks that we begin rethinking our interactions. It asks businesses to appeal to the higher faculties of intelligent, aspirational consumers and audiences without being exclusionary, arcane or abstract.

It's a challenge, certainly, but restyling a challenge as an opportunity is what smart people do.

Jamie Cullinane is a trendspotter currently based in New Zealand. He works for advertising agencies both locally and in the US to keep them abreast of key cultural shifts