Minds blown: are we getting dumber?

0:10Hello and welcome to The Intelligence from The Economist. I'm your host, Rosie Bloor. Every weekday, we provide a fresh perspective on the event shaping your world.

0:24The demise of the Russian economy has long been foretold, but as the war drags on and interest rates rise sky-high, is it now finally reaching a tipping point?

0:39And Shalom Nagar was the Israeli prison officer who guarded Adolf Eichmann One of the chief architects of the Holocaust Later he was picked by lottery to execute Eichmann Our obituaries editor remembers him

1:01First up though

1:08Are You Smarter Than a Fifth Grader? is an American quiz show that pits grown-ups against kids. Listen carefully. The$1 ,000 question is... This is a classroom club question. How many faces are there on a cube? Occasionally, the answers given by contestants can be surprising. My intuition is telling me that there are eight. That seems right. There are, in fact, six sides to a cube. Quiz shows, though, are special places. Bright lights and cameras can make people say all kinds of things. Perhaps more disturbing than one embarrassing TV moment is that many adults really might not be smarter than a 10-year-old.

1:56This week, a group of rich countries released a once-in-a-decade survey on adult skills and the results were less than encouraging. Mark Johnson is our education correspondent. Roughly a fifth of people aged 16 to 65 perform no better in tests of maths and reading than you might expect from a 10-year-old child. Mark, I have to say these sorts of studies always seem a bit bogus to me. How has anyone worked this out? So this is administered by the OECD. That's a club of mostly rich countries. It's an intergovernmental think tank, basically. they've asked 160 ,000 adults in 31 countries to sit short tests in numeracy literacy and problem solving so these are not just questions of mental arithmetic or you know spelling they're actually challenges designed to see if you have the kind of skills that you need to keep a job participate in civic life so they're basic tests that find out how well people can say make sense of the warnings on the back of an aspirin packet or work out how much wallpaper is needed to cover a room.

2:59But, you know, at more advanced levels, they're also exploring how well you can draw kind of sound conclusions from analysis and charts that you might find in, say, your favourite current affairs magazine. And are we all equally stupid or do some countries perform better than others? No, so there's good news here for some places. People in Finland are going to be pleased with these results. It comes top of the rankings or at least it gets the highest average score in all three fields. The Netherlands, Norway and Japan are also countries where adults perform better than average on these tests. And there's good news for England, it's risen up the table mostly because young adults, those aged 16 to 24, are getting much better performance, much better scores than they used to.

3:39There's bad news for some other countries, America's results are heading south. This is only the latest index that show declines in sort of cognitive ability in America. And other countries include Chile, Italy, Poland and Portugal all scoring some way below the norm. And some of the variations between the scores of these countries are very interesting. So in the highest scoring countries in places like Sweden and in Finland, people who have only graduated high school are scoring better than university graduates in places like Spain and Italy. And forgive the sceptic in me, but are these tests really testing how clever we actually are or just very particular skills that perhaps 10-year-olds do a lot more of than adults?

4:21Well, clever is a big word. These are testing information processing skills, your ability to take in information, to filter it, to play around with it in your head and then to use it in ways that are useful in your daily life. And the big picture is one of stagnating and worsening basic skills among adults. So for almost every country that has seen a sort of increase in numeracy scores. There is another in this index that has seen its score go down over the last 10 years. And for literacy, it's a bit worse. So countries with falling scores actually outnumber those that have made meaningful progress.

4:57This is the case even though more people are completing secondary school and many more people are getting degrees. And the declines have been concentrated among the least proficient people. They seem to be scoring even lower than they did last time around. So the result of that is in many countries, the gap between the most and the least skilled people is actually widening. So why is this happening? Well, there are demographic changes in these countries. The population that is foreign-born in these places is increasing. When you're being tested in a language that is not your first one, you sometimes don't do as well.

5:28There's also ageing changes. So rich countries are ageing in general. And the data suggests that once you pass the age of 30, your numeracy and your literacy skills start to decline, alas. But you can adjust for these things. And even after adjusting for those changes, you find that in literacy especially, there is still more countries that are going backwards than going forwards. And there's a variety of ideas of why this might be the case. Some people would argue that Netflix and TikTok and technology in general is sort of reducing our ability to concentrate on long and complex texts. I think it's just as likely that education systems, both for children and for adults are somewhat misfiring.

6:12So Mark, I'm still not entirely convinced that this really affects how we actually deal with the world. Surely AIs are going to be doing a lot of this stuff soon anyway. Does it really matter? So this stuff very much does seem to matter. The OECD put out surveys alongside these tests. So people who took these tests also answered questions about their lives. People who perform best in these tests earning at the median 75 % more than the people who score at the worst. But the returns to good skills, good numeracy, good literacy, good information processing are higher than just financial. So high scorers reported that they were happier and in better health.

6:51Low scorers seem to be more suspicious of others. They also report feeling more alienated from politics. They say that they believe their voices are not heard. I think that kind of trend is a big worry for the years ahead. Mark, thank you so much for talking to me. Thank you.

7:21War can sometimes be good for an economy. The state spends a lot on big ticket items and military recruitment soaks up loose manpower. And it looked like that was what was going on in Russia until recently.

7:37Last month, the governor of Russia's central bank, Elvira Nabolina, said that monetary policy had reached a tipping point.

7:48Interest rates have soared to 21%. Russia's economy has really confounded analysts and economists ever since the country invaded Ukraine. Duncan Weldon is an economics correspondent It's been subject to one of the toughest and most comprehensive sanctions packages in modern economic history But it just continues to grow Last year it grew 3.6%, you know, perfectly decent, reasonably fast clip This year it's expected to grow at about the same pace How has it done that? Well, maybe this shouldn't be too much of a surprise It's been known for a long time that in the short term at least, fighting a war can provide a boost to economic activity.

8:31You know, producing all of those shells and conscripting all of those soldiers might not add to social welfare, but it does boost economic output. And it's just increased interest rates to 21%, which is astonishingly high. I mean, 21 % is very, very high. It's a two-decade high for Russia. And we should say it's quite unusual. Usually when a country's at war, the last thing a central bank wants to be doing is suppressing economic activity. But that's what high interest rates are supposed to do. Inflation in Russia is very high. The central bank has had to push interest rates all the way up to 21%.

9:06And financial markets expect further increases in the weeks ahead. We shouldn't, though, think of this as a demonstration of economic strength, that the Russian economy is so strong that it can survive with interest rates at 21%. Rather, this is a sign of trouble to come down the road. I feel like we keep saying there's trouble coming down the road for Russia. So what's going on, Duncan? Well, hear me out on this. If we look at what's happening in the Russian economy, at the latest budget in September, the government announced it was going to increase spending on defence and security, which includes things like intelligence services, by another 25%.

9:45That's up to about US$170 billion. US dollars. Actually, it's slightly more than that because the rubles lost some value recently. But that's about 8 % of Russia's GDP, 8 % of national income going on defense. Now, on one level, that's not that unusual. If you go back to the 1960s during the Vietnam War, America was spending 8-10 % a year of GDP on defense. If you go back to the Second World War, now that's a big war. The Great Powers were spending 40-60 % of their economic output on war fighting. But it's still a lot. And that government spending is getting harder and harder for Russia to cover.

10:25But if, as you say, historically, the US did it, boomed ahead, the UK did it, why is Russia now going to falter? Well, I think the difference can be found in what's happening with interest rates, what's happening with monetary policy. If you go back to the 1940s, Britain is spending an awful lot of its national output on war. But British policymakers endeavoured and mostly succeeded in fighting what they rather politely dubbed a 3 % war. Interest rates were going to be kept low. Both Britain and America in the Second World War fought those wars with very low interest rates. Now that meant it kept the cost of government borrowing low, which made the war more affordable.

11:05The reason they could do this was neither Britain nor America in the war had to be particularly worried about the external value of their currency. The dollar was a safe haven in a world at war, and Britain was benefiting from what was called lend-lease. America provided a lot of military equipment, oil, food, about two-thirds of Britain's imports, and it provided them essentially for free. Now, had Britain lacked an ally with the deep pockets and industrial capacity of America, then the fall in the value of the pound might have become a problem. Russia, though, doesn't have such an ally. But Russia's not without allies.

11:45It's not. It's got China, and China has become Russia's most important trading partner. It's about a third of all imports now are coming from China, including more than 90 % of the microelectronics, which are a crucial component in lots of military material like drones, missiles, tanks. But this support isn't being provided for free. So Russian officials have to worry about the value of the ruble, particularly against China's currency, because if that loses value, then the price it's paying for these inputs go up and it starts to become a potential military problem. Now, the ruble has lost more than 5 % of its value against the yuan over the last few months.

12:26So when Russia's raising interest rates, it's not just worried about inflation, it's worried about propping up the value of its currency. And that's the bind that Russia's in. It's having to put up interest rates to protect the value of its currency so it can afford imports. But putting up interest rates has a big impact on the domestic economy. And are there other signs of strain within Russia's economy? Well, the government's done quite a good job over the last two years of really protecting the domestic economy from the impact of these high interest rates. So there have been subsidised schemes letting companies and households borrow for much less than the cost of these official interest rates.

13:07But they've all become very expensive and those schemes are all being unwound. So Russian business is now saying actually we're having to crimp investment plans because we can't afford to anymore. Russian households are suddenly being hit with higher bills. The IMF expects growth to slow sharply next year to just 1.3 % down from more than three and a half. Even VEB, which is a state-run development bank, who we might expect to be optimistic, think the economy is only going to grow by around 2%. So slowly but surely, these costs are mounting. Putin is probably now hoping that Donald Trump does end the war quickly.

13:46I think the big lesson is that fighting a 3 % war is one thing, fighting a 21 % war is quite another. Fantastic. Really interesting. Thank you so much, Duncan. Thank you for having me.

14:16At midnight on May the 31st, 1962, Shalom Nagar stood a metre away from his prisoner and looked him in the eye. Anne Rowe is The Economist's obituaries editor. He'd often stood that close to him in Ramla prison. And his prisoner was Adolf Eichmann. Eichmann had just requested a glass of white wine and he'd smoked a cigarette. He could smell them both on his breath. But he was now bound by his ankles and his knees and his hands were bound behind him. because he was standing on a trapdoor and he was about to be hanged, and Shalom Nagar was the man who was going to hang him.

15:12He had often stood this close to Eichmann. Eichmann had a tiny little cell in the middle of a suite of rooms in the Ramla prison in central Israel. It was the whole suite on the second floor, and there were 22 men guarding him, each guarding the next lot of guards. He watched him get up and make his bed in the mornings, get dressed. And then he had to escort him to the bathroom, come back, make sure everything was tidy. But Eichmann was always compulsively tidy. It was one of the odd things about him, how often he would wash his hands, for example. Nagar also had the job of tasting Eichmann's food in case anyone tried to poison him, because he was being held after all in a jail in Israel.

16:09He was the most important prisoner that Israel had, because Eichmann was the man who had masterminded the Holocaust. He had been the one who made sure that the Jews were rounded up, that they were deported, and they were put on railway trains to go to the death camps.

16:43Shalemnagar did not want to hang Eichmann, but he was chosen as the ideal man to do it because he was not Ashkenazi. He had not been one of those families in Eastern Europe who had lost people in the camps or who had been survivors of camps themselves. He didn't have that number tattooed on him. Because Nagar was Sephardi, born in Yemen, he was fine and he was, also thought, ideal to hang Eichmann. he had been shown a documentary about the atrocities of the nazis and he had decided in his mind that although he'd always had a rather civil relationship with eichmann eichmann for example had always said thank you when he took him to the lavatory he was still dealing with a man who was evil incarnate who had done things that didn't deserve any mercy

17:49and so at midnight precisely he pulled the lever and Eichmann fell down down three floors to the basement and was hanged the much harder job for Nagar was to go down to the basement and remove the body from the gallows he hadn't expected that Eichmann's face would look chalk white, that his tongue would be hanging out and his eyes bulging, that the rope that was round his neck would have so chafed it that there was blood on his chest, and when Nagar went to lift him down, Eichmann's blood went over his face. The worst of it was that as he lifted Eichmann down, the air that had been trapped inside him burst out in a great cry, which sounded to Nagar like the angel of death.

18:49His superior said to him, you are looking too shaky, we're going to take you home. But for a year after that hanging, he was traumatized. He could not go up the stairs to the second floor.

19:05he tried once to go up alone singing a Yemeni song to try to give himself courage but his own reflection was suddenly reflected off a glass door and he thought it was Eichmann the angel of death again and he was so afraid that he tumbled down the stairs he served a good many more years in the police but he was still utterly haunted by what he had done he only managed to come to terms with it when he actually recovered the faith that he had had as a child and the comfort that his faith gave him was that he began to study the notion of mitzvot or deeds good deeds and he became convinced that he had by hanging Eichmann performed a very great mitzvah.

20:00He had actually obliterated the evil that had been threatening Israel. He had obliterated Amalek, which was the enemy nation of Israel.

20:18And therefore he, in a way, had saved his people. In this way he managed to lay the ghost of Eichmann and even perhaps dispel his fear of going up to the second floor of Ramla prison.

20:41Anne Rowe on Shalom Nagar, who has died aged 88.

21:19Thank you. with extra production help this week from Emily Elias. This week on The Weekend Intelligence, The Economist's US digital editor Stephanie Studer looks at America's many good Samaritan laws and explores what the cost is of being good. We'll all see you back here for that tomorrow.