This post addresses comments by Sineruse, David Versace, and others on earlier threads here, here and here.
I've been pretty busy during my visit to BGI so I kind of lost track of the conversation. But here are my thoughts.
I think it is possible that Asian "strength of application" overpredicts later career success*. There could be many reasons for this. For example, it could be that Asian hard work boosts test taking results and grades more than it does real world achievement. It could also be that tests and grades are fair, whereas Asians face a certain amount of race-related disadvantage later in their careers -- e.g., unconscious bias, lack of "ethnic affinity" networks, etc. (If you talk to highly trained Chinese scientists and businesspeople returning to China from the US, most will describe an uphill struggle for Asians in the US; this contrasts with glib statements from white Americans about how little anti-Asian bias there is in elite careers.) Finally, Asians may have lower rates of sociopathy, which reduces their chances of making it to the top (close inspection suggests it is mostly sociopaths at the top ;-)
I don't think the evidence is overwhelming on this question. But if, say, Asians have a .5 SD advantage in g and 1 SD advantage in conscientiousness or work ethic, that might lead to a "fair" Ivy population representation which is less than 20% if by "fair" we mean: apportion slots based on future success odds. (An additional factor which is usually mistakenly ignored in numbers like +.5/+1 is the large offshore "reservoir" of Asians and the fact that some A-As are drawn from a very elite subgroup in their ancestral countries.) Note though, as emphasized by RKU, the current Ivy standards for what constitutes "success" may not be aligned with the real interests of the Nation. That is, the connection between money and power and actual value creation in our current system seems to have become quite weak of late. What is good for Harvard may not necessarily be what is good for the USA.
Having said all this, I think you are missing a key point -- perhaps because you think mainly in terms of (white) ethnic interests. Even if elite universities are acting in their narrow self-interest in assessing an outright Asian penalty to compensate for inflation of application strength, their methodology may violate the law. While some Asian application profiles overestimate later career prospects, universities should not be allowed to make generalizations based solely on race. This may not be a principle that you believe in, but it's an important one to me. If universities have some other way to correct for false signals in admissions profiles ("this kid scored high, but we know he's just a grind"), then fine. However, I suspect what is going on now is crudely (if perhaps subconsciously) race-based**.
* Something to keep in mind is that Harvard et al. would like to have influence abroad as well as at home, and Chinese ethnicity alumni are well placed to influence what will soon be the largest economy on the planet. Underperformance vs predictor in the US may be compensated by overperformance in the new reality of the coming century. Ask yourself why BGI was more willing to work with me than, say, the Sanger or Broad institutes might have been.
** An astute commenter asks why we should oppose race-based decision making, if there is real correlational information to be had from ethnicity. I offer two reasons: 1. this country has a bad record on race, and striving towards a race-blind society is worth some small sacrifices, 2. the evidence for genetic group differences is not conclusive and should be treated with great caution.
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