A friend of mine recently selected a daycare for her son. She used the algorithmic mind quite effectively: she weighed various factors, e.g., the financial cost, the seeming warmth of the caretakers, whether the facilities were clean and inviting. But her goal in putting these factors together was short-sighted. She heavily weighted the daycare’s proximity to her house. It was obvious to me (and her other friends) that the philosophy of child-rearing at this daycare did not match hers. After several months of complaining about what the caregivers did and said, she started looking for another daycare.
An intelligence test measures the algorithmic mind, that is, how efficiently my friend weighs the factors. But to make effective decisions and adapt to your environment sensibly, you need to do more. You need to see your environment for what it is, you need to set realistic goals, and you need to select actions that move you towards those goals. That is the job of the reflective mind, and these features are not measured by standard intelligence tests. That’s why smart people do dumb things like send their child to a daycare that will not work out, or try to beat the stock market.