No, Lewontin's fallacy is the belief that if this is true for every trait, the populations are indistinguishable.

Physics Prof Steve Hsu explains the Lewtontin fallacy here:

Further technical comment: you may have read the misleading statistic, spread by the intellectually dishonest Lewontin, that 85% percent of all human genetic variation occurs within groups and only 15% between groups. The statistic is true, but what is often falsely claimed is that this breakup of variances (larger within group than between group) prevents any meaningful genetic classification of populations. This false conclusion neglects the correlations in the genetic data that are revealed in a cluster analysis. See here for a simple example which shows that there can be dramatic group differences in phenotypes even if every version of every gene is found in two groups -- as long as the frequency or probability distributions are distinct. Sadly, understanding this point requires just enough mathematical ability that it has eluded all but a small number of experts.) Update: see here for an explanation in pictures of Lewontin's fallacy. I also edited the paragraph above for clarity.

On the other hand, for most phenotypes (examples: height or IQ, which are both fairly heritable, except in cases of extreme environmental deprivation), there is significant overlap between different population distributions. That is, Swedes might be taller than Vietnamese on average, but the range of heights within each group is larger than the difference in the averages. Nevertheless, at the tails of the distribution one would find very large discrepancies: for example the percentage of the Swedish population that is over 2 meters tall (6"7) might be 5 or 10 times as large as the percentage of the Vietnamese population. If two groups differed by, say, 10 points in average IQ (2/3 of a standard deviation), the respective distributions would overlap quite a bit (more in-group than between-group variation), but the fraction of people with IQ above some threshold (e.g., >140) would be radically different. It has been claimed that 20% of all Americans with IQ > 140 are Jewish, even though Jews comprise only 3% of the total population.

...The imbalance continues to increase for still higher IQ’s. New York City’s public-school system used to administer a pencil-and-paper IQ test to its entire school population. In 1954, a psychologist used those test results to identify all 28 children in the New York public-school system with measured IQ’s of 170 or higher. Of those 28, 24 were Jews.

There is no strong evidence yet for specific gene variants (alleles) that lead to group differences (differences between clusters) in behavior or intelligence, but progress on the genomic side of this question will be rapid in coming years, as the price to sequence a genome is dropping at an exponential rate.

What seems to be true (from preliminary studies) is that the gene variants that were under strong selection (reached fixation) over the last 10k years are different in different clusters. That is, the way that modern people in each cluster differ, due to natural selection, from their own ancestors 10k years ago is not the same in each cluster -- we have been, at least at the genetic level, experiencing divergent evolution.

In fact, recent research suggests that 7% or more of all our genes are mutant versions that replaced earlier variants through natural selection over the last tens of thousands of years. There was little gene flow between continental clusters ("races") during that period, so there is circumstantial evidence for group differences beyond the already established ones (superficial appearance, disease resistance).

http://infoproc.blogspot.com/2008/01/no-scientific-basis-for...