The rival theory is Magic dirt:
Magic dirt is a derogatory term for the theory that where a person lives determines the person's psychological characteristics. It is a variant of the "blank slate" theory.Steve Sailer gives an example of this, in an Atlantic magazine article on Cicero Illinois. Thirty years ago it was a properous city of Italians and others. They kept Blacks out, until the governor called out the National Guard. Now the city is mostly Latinos, and has greatly declined. Or so the article says.
Such views are often applied to migrants, both between countries and within countries, with an assumption being that migrants (or their descendants) from poorly functioning areas/populations will assume the characteristics of well-functioning areas/populations by migrating.
A similar theory is that moving students from poorly functioning schools to well-functioning schools will cause the students to become well-functioning.
Civic nationalists often explicitly or implicitly support the theory.
This story supports human capital theory. The previous prosperity was based on its people, not the dirt. But the Atlantic and most Leftists are tied to magic dirt theory, so they wonder what went wrong with the dirt.