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A blog about economics in the South Caucasus.

Language and Economics

In the 1930s, the American linguist Benjamin Lee Whorf put forward the hypothesis that people of different mother tongues perceive the world differently. According to linguistic relativity or Whorfianism, both the grammatical structure and the vocabulary of a language influence the way how people think. Proponents of political correctness, aiming to ban the usage of certain words that are considered to be derogatory or discriminatory, ultimately base their ideas on Whorfianism. Saying “little person” instead of “midget” may have an impact on how one thinks about people who have the medical condition of dwarfism.

These ideas were picked up by other groups as well. The Khmer Rouge in Cambodia prohibited the usage of the personal pronoun “I”. In this way, they wanted to force people to see themselves as part of a collective rather than as individuals. There are also instances of Whorfianism in fictional literature. In his famous novel "1984", George Orwell imagined a society in which the government banned subversive words, making the associated thoughts unthinkable.

Assuming that Whorf had a point, would it not to be expected that language also influences the economic behavior of people?


INTERTEMPORAL CHOICES

Modern economic theory is very much concerned with the role of information in economic systems. In this vein, the famous Israeli game theorist Ariel Rubinstein wrote a whole book on economics and language. Also empirical economics is catching up. In a recent study, Yale economist Keith Chen claims that the language used by a nation has an impact on saving behavior and health precautions (“The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets”, American Economic Review, 103 (2013): 690-731).

Chen argues that the way in which present and future tenses are formed in a language influences a speaker’s intertemporal choices.  Some languages force their speakers to indicate that they are explicitly talking about something that will happen in the future, while other languages allow people to talk about the future essentially in the same way as about present events. According to Chen, languages that grammatically equate future and present (i.e. the formation of present and future tenses does not differ much) foster future-oriented behavior. Apparently, people who speak such languages save more, retire wealthier, smoke less frequently, and are less often obese.

“If language nudges you to speak about the present and the future in the same way, is it possible that you feel about the present and the future in the same way?” asks Chen.

The article divides languages into two broad categories: weak and strong future-time reference (FTR) languages. For instance, English is a strong FTR language, requiring to talk about the present and the future differently. We can say "it is cold today", but if we are referring to tomorrow's weather, we have to say "it will be cold tomorrow." Not all languages make this distinction. For example, in the Finnish language one would say "today be cold" and "tomorrow be cold", and one can also say "be cold" without specifying whether one is talking about the present or the future. Therefore, Finnish is categorized to be a weak FTR language. Mandarin has no tenses at all – a sentence in Mandarin usually does not convey information on whether the speaker refers to the present or the future. This does not mean that Mandarin speakers are not able to understand time difference; however, they are not forced to select a tense each and every time they make a statement. So, also Mandarin is a weak FTR language.

For measuring the degree of future-orientation of different nations, Chen looks at their spending habits, their retirement savings, and their health precautions. Then he relates these values to the FTR type of the language according to the Typology of Languages in Europe (EUROTYP) classification. His analysis includes 76 developed and developing nations (including Georgia) on five continents. Based on an econometric regression, Chen provides support for the hypothesis that speakers of weak FTR languages are more future-oriented, both in monetary and non-monetary matters. Compared to people who speak strong FTR languages, those whose mother tongue is weak FTR on average have saved 39% more capital by the time they retire, and the probability to have saved a positive amount in a given year goes up by 31%. If one is a weak FTR speaker, the probability to be a smoker goes down by 24%, to be obese by 13%, and the probability to be physically active increases by 29%.

Chen claims that this partly explains why the Unites States, Greece, Israel, the United Kingdom, Poland, Turkey, Italy, and other strong FTR language countries on average save less compared to Norway, Switzerland, Japan, Netherlands, Finland, Austria, Belgium, and other weak FTR language countries.


THE GEORGIAN LANGUAGE

According to the study, Georgian is a strong FTR language. Does this explain the abysmal saving rate of Georgians and the alleged lack of “safety thinking” that was discussed on the ISET Economist blog two years ago?

Georgian is a very special language. The Kartvelian language family has a grammatical structure that differs significantly from those of the Indo-European, Semitic, and Asian languages. The distinct features of the Georgian language might be reflected in the national character of Georgians. As this topic has not been picked up yet by psycholinguists and behavioral economists, let us engage in some free speculations.

Georgians distinguish between elder and younger persons by addressing them “შენ” (you) and  “თქვენ”(you). Perhaps, this formal expression of respect (or juvenility) creates subconscious borders. Intuitively, it induces a hierarchy among people that would not be there without the language. Whether that makes cooperation easier or more difficult is unclear though. In some teams and organizations with a flat hierarchy structure, the Georgian language may create artificial obstacles reducing the effectiveness of the group. In other settings, however, hierarchy may be useful. Languages like Japanese and Korean (the latter has 18 different forms for addressing different people) may enable their speakers to more easily integrate into given structures and execute tasks more reliably.

In another blog post, published about half a year ago by Norberto Pignatti and myself, we analyze the gender pay gap in Georgia. Some of those who commented on the article started a fierce discussion on whether our analysis was right or not, and some claimed that the gender pay gap was not related to discrimination in any way. In support of this viewpoint, they did not refer to the Georgian language, which they could have done, because Georgian may indeed be less “sexist” than other languages.

Georgian does not have a grammatical gender and not even 3rd person pronouns. Georgian personal and demonstrative pronouns yield only deictic (contextual) and number information, yet they do not indicate the gender of the person referred to. Intuition suggests that this should reduce the discriminatory potential of the Georgian language. In their language, Georgians remove any difference between men and women, they are all the same.

Other languages, like German, attribute a gender to each and every object. A table is male, while a curtain is female. The floor is male and the wall is female. The psychologist Thomas Jacobsen has found that these grammatical genders have an influence on how Germans perceive different objects (“Effects of Grammatical Gender on Picture and Word Naming: Evidence from German”, Journal of Psycholinguistic Research, 28 (1999): 499-514). Lacking grammatical gender, there can be no such thing in Georgian.

Moreover, in German the word “man” often has the meaning of “somebody” (even if that person is female). To avoid this sexism, politically correct people in Germany do not say “man” anymore, but replace it by “human”. The Georgian language does not have this problem: even the staunchest Georgian sexist has no choice but to use politically correct language.

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Guest - Adam on Monday, 02 December 2013 15:38

Very interesting piece. I find it fascinating that, if I wanted to say I own a car, I would use "მყავს," which is the possessive form normally reserved for people or pets, rather than "მაქვს," which is the possessive form used for objects. This personalization of a car may not auger well for Tbilisi traffic patterns in the next few years (well, now as well!).

Very interesting piece. I find it fascinating that, if I wanted to say I own a car, I would use "მყავს," which is the possessive form normally reserved for people or pets, rather than "მაქვს," which is the possessive form used for objects. This personalization of a car may not auger well for Tbilisi traffic patterns in the next few years (well, now as well!).
Guest - RT on Monday, 02 December 2013 19:20

That norm seems to be changing. I heard once a student of mine claiming to never (!) have heard "მანქანა მყავს"

That norm seems to be changing. I heard once a student of mine claiming to never (!) have heard "მანქანა მყავს"
Guest - Sandro Ma on Monday, 02 December 2013 20:44

“მანქანა მყავს” (I own a car) - that's how Georgians speak. It can be explained why is that so. A car being a susbtitution to a horse, which is animate, is represented (in certain kind of sentences) as well as an animate entity rather than inanimate.

“მანქანა მყავს” (I own a car) - that's how Georgians speak. It can be explained why is that so. A car being a susbtitution to a horse, which is animate, is represented (in certain kind of sentences) as well as an animate entity rather than inanimate.
Guest - RT on Monday, 02 December 2013 21:51

I speak that way too. Nevertheless, if you Google "მანქანა მყავს", you will see that some people argue differently.

I speak that way too. Nevertheless, if you Google "მანქანა მყავს", you will see that some people argue differently.
Guest - Simon Appleby on Monday, 02 December 2013 16:41

A very interesting and thought-provoking article.

A brief summary of the paper can be seen here

https://www.ldc.upenn.edu/sites/www.ldc.upenn.edu/files/chen.pdf

The ranking of languages in the chart makes for interesting reading. There are many exceptions to the rule that weak FTR status is associated with tendency to plan for future contingencies.

Changes in language by a community over time may or may not be reflected in their economic behaviour. For example, the Jewish people have switched from Hebrew, to Aramaic, then following the Diaspora into Yiddish, Ladino, Spanish, Ottoman Turkish, Arabic and English, and to an extent back into Hebrew with the establishment of the State of Israel, but Jewish traditions and the behaviour of the surrounding Gentile community arguably have superseded the lingua franca of the diaspora populations in determining economic behaviour.

It is important to match like with like. Savings rates in Mainland China amongst middle income people are higher than that of Hong Kong or Taiwan people of similar status, as Mainlanders still are distrustful of state-controlled insurance companies and tend to self-insure through liquid investments. Yet both groups are speaking Chinese languages.

In southeast Asia, communities speaking strong FTR languages like Tamil, Punjabi, Gujarati or Hindi tend to have higher savings rates than the indigenous Malayo-Polynesian people they live amongst, who speak weak FTR languages. The classical migrant characteristics of ambition, industry and thrift arguably play a more important role than the language spoken at home.

I would argue that being a migrant has a much greater effect on economic behaviour than the language class spoken at home. Georgian migrants in Russia, UK and USA tend to be more financially prosperous and have more liquid assets to cover contingencies than their indigenous neighbours on average, despite speaking Georgian at home and being surrounded by speakers of weaker FTR languages like English and Russian.

A very interesting and thought-provoking article. A brief summary of the paper can be seen here https://www.ldc.upenn.edu/sites/www.ldc.upenn.edu/files/chen.pdf The ranking of languages in the chart makes for interesting reading. There are many exceptions to the rule that weak FTR status is associated with tendency to plan for future contingencies. Changes in language by a community over time may or may not be reflected in their economic behaviour. For example, the Jewish people have switched from Hebrew, to Aramaic, then following the Diaspora into Yiddish, Ladino, Spanish, Ottoman Turkish, Arabic and English, and to an extent back into Hebrew with the establishment of the State of Israel, but Jewish traditions and the behaviour of the surrounding Gentile community arguably have superseded the lingua franca of the diaspora populations in determining economic behaviour. It is important to match like with like. Savings rates in Mainland China amongst middle income people are higher than that of Hong Kong or Taiwan people of similar status, as Mainlanders still are distrustful of state-controlled insurance companies and tend to self-insure through liquid investments. Yet both groups are speaking Chinese languages. In southeast Asia, communities speaking strong FTR languages like Tamil, Punjabi, Gujarati or Hindi tend to have higher savings rates than the indigenous Malayo-Polynesian people they live amongst, who speak weak FTR languages. The classical migrant characteristics of ambition, industry and thrift arguably play a more important role than the language spoken at home. I would argue that being a migrant has a much greater effect on economic behaviour than the language class spoken at home. Georgian migrants in Russia, UK and USA tend to be more financially prosperous and have more liquid assets to cover contingencies than their indigenous neighbours on average, despite speaking Georgian at home and being surrounded by speakers of weaker FTR languages like English and Russian.
Guest - Eric Livny on Tuesday, 03 December 2013 00:49

Simon, even assuming that language and behavior have been "determined" simultaneously through some sort of evolutionary process, the two may diverge over time. Behavior can change through migration, foreign conquest, protracted economic crisis, etc. And of course, people can adapt a new language, just like the Jewish people in your example. In other words, while finding counter-examples is quite easy, the general rule may still hold.

Simon, even assuming that language and behavior have been "determined" simultaneously through some sort of evolutionary process, the two may diverge over time. Behavior can change through migration, foreign conquest, protracted economic crisis, etc. And of course, people can adapt a new language, just like the Jewish people in your example. In other words, while finding counter-examples is quite easy, the general rule may still hold.
Guest - nia on Monday, 02 December 2013 21:40

since this interesting article links languge and economics,I thought the article would have benefited from mentioning the fact that ,, the third world countries" are now called ,,developing countries" or ,,aspiring economics" .
while the fact that the knowlege of langugages does affect the person's brain and thus, decisionmaking is no news for linguists, the importance of the future tense is new and interesting.

since this interesting article links languge and economics,I thought the article would have benefited from mentioning the fact that ,, the third world countries" are now called ,,developing countries" or ,,aspiring economics" . while the fact that the knowlege of langugages does affect the person's brain and thus, decisionmaking is no news for linguists, the importance of the future tense is new and interesting.
Guest - Robert Morger on Monday, 02 December 2013 23:20

this article reminded me of an excellent book I read in german. Israeli linguist Guy Deutscher:Through the Language Glass. How Words Colour Your World. 2010 He investigates the impact of language on thought and shows how linguistic conventions influence certain aspects of behavior. He also Shows that there is no proof of mothertongue limiting intellectual horizon or ability to understand ideas and differentiations used in other languages. Frequent use of mothertonguely mode of expresson only slightly influeces perception (such as orientation, sensibility of colourdifference, assoziations). So ethics and valuesystem may influence economic behavior much more. Worfs uncomprehensiv contradictionary theories were one of the reasons I gave up my studysubject thirty years ago. Enjoy reading ISET article, give me lot of information about my country of one's choice.

this article reminded me of an excellent book I read in german. Israeli linguist Guy Deutscher:Through the Language Glass. How Words Colour Your World. 2010 He investigates the impact of language on thought and shows how linguistic conventions influence certain aspects of behavior. He also Shows that there is no proof of mothertongue limiting intellectual horizon or ability to understand ideas and differentiations used in other languages. Frequent use of mothertonguely mode of expresson only slightly influeces perception (such as orientation, sensibility of colourdifference, assoziations). So ethics and valuesystem may influence economic behavior much more. Worfs uncomprehensiv contradictionary theories were one of the reasons I gave up my studysubject thirty years ago. Enjoy reading ISET article, give me lot of information about my country of one's choice.
Guest - David Lee on Tuesday, 03 December 2013 19:25

"მე მიყვარ ხარ" is the expression that best expresses the uniqueness of the Georgian language for me. I also find the use of the present perfect, as in მე არ გამიკეთებია relevant to the Georgian character.

"მე მიყვარ ხარ" is the expression that best expresses the uniqueness of the Georgian language for me. I also find the use of the present perfect, as in მე არ გამიკეთებია relevant to the Georgian character.
Guest - blintu on Thursday, 05 December 2013 06:23

this is really thought provoking post. I totally agree with it.
But I don't really agree with the last paragraph. Georgian is really mostly gender-free language but we still have words like "კაცი/კაციშვილი" which describe humans in general but are formed from male word forms. "ადამიანი" is also coming from Adam (and not Eve) and means human in general.

this is really thought provoking post. I totally agree with it. But I don't really agree with the last paragraph. Georgian is really mostly gender-free language but we still have words like "კაცი/კაციშვილი" which describe humans in general but are formed from male word forms. "ადამიანი" is also coming from Adam (and not Eve) and means human in general.
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