The growth model of intelligence; i.e. intelligence is the product of genetics plus environment (I.Q.=G+E), is discussed and questioned. If the growth model is discarded, formulating the problem of the development of intelligence in different ways and thinking of different possible technologies for changing intelligence can begin. The child constructs his own environment. He interprets the environment, and it is the environment as interpreted that makes up the psychological environment of that child. Development is not a unidimensional, monotonic process of growth. The growth model takes no account of cultural diversity. The model presented here for psychological development is based on the phenomenon of differentiation. Development is directional rather than incremental. This model illumines the problems of compensatory education. (Author/LEB)