<div dir="ltr"><br clear="all">
<h1 class="gmail-post_title">The economics of language<div class="gmail-fb-quote gmail-fb_iframe_widget" style="left: -200px; top: 23px;"><span style="vertical-align:bottom;width:169px;height:47px"></span></div></h1><ul class="gmail-post_details gmail-clearfix"><li class="gmail-detail gmail-author"> <a href="http://www.dhakatribune.com/author/tim-worstall/">Tim Worstall</a></li><li class="gmail-detail gmail-date">Published at 12:07 AM March 06, 2018</li></ul><div><a class="gmail-post_image gmail-page_margin_top gmail-prettyPhoto" href="http://www.dhakatribune.com/assets/uploads/2018/03/Capture-8.jpg" title="The economics of language"><img src="http://www.dhakatribune.com/assets/uploads/2018/03/Capture-8-690x450.jpg" class="gmail-attachment-small-slider-thumb gmail-size-small-slider-thumb gmail-wp-post-image" alt="The economics of language" title="" style="display: block;" width="690" height="450"></a></div><div class="gmail-sentence">
<span class="gmail-text">“Network effects” refers to the benefits of having a large number of users</span><span class="gmail-author"><b>BIGSTOCK</b></span></div><div class="gmail-post_content gmail-page_margin_top_section gmail-wit_img gmail-clearfix"><div class="gmail-content_box gmail-full_width"><h2 class="excerpt gmail-FBIA">What makes one language more popular than others? </h2><div class="gmail-text"><div class="essb_links essb_counters essb_counter_modern_top_mini essb_displayed_postfloat essb_share essb_template_round-retina essb_template_modern-light-retina essb_1298452788 essb_sharebtn_counter_hidden gmail-print-no essb_postfloat_fixed essb_postfloat_breakscroll" id="essb_displayed_postfloat_1298452788">
<ul class="essb_links_list essb_force_hide_name essb_force_hide">
<li class="essb_item essb_link_facebook gmail-nolightbox"> <span class="essb_counter">18</span><a href="https://www.facebook.com/sharer/sharer.php?u=http://www.dhakatribune.com/business/2018/03/06/the-economics-of-language/&t=The+economics+of+language&redirect_uri=http://www.dhakatribune.com?sharing-thankyou=yes" title="" target="_blank" rel="nofollow"><span class="essb_icon essb_icon_facebook"></span></a></li>
<li class="essb_item essb_link_messenger gmail-nolightbox"> <a href="https://www.facebook.com/dialog/send?app_id=&link=http://www.dhakatribune.com/business/2018/03/06/the-economics-of-language/&redirect_uri=https://facebook.com" title="" target="_blank" rel="nofollow"><span class="essb_icon essb_icon_messenger"></span></a></li>
<li class="essb_item essb_link_twitter gmail-nolightbox"> <a href="http://www.dhakatribune.com/business/2018/03/06/the-economics-of-language/#" title="" target="_blank" rel="nofollow"><span class="essb_icon essb_icon_twitter"></span></a></li>
<li class="essb_item essb_link_whatsapp gmail-nolightbox"> <a title="" target="_self" rel="nofollow"><span class="essb_icon essb_icon_whatsapp"></span></a></li>
<li class="essb_item essb_link_viber gmail-nolightbox"> <a title="" target="_blank" rel="nofollow"><span class="essb_icon essb_icon_viber"></span></a></li>
<li class="essb_item essb_link_sharebtn gmail-nolightbox"> <a href="http://www.dhakatribune.com/business/2018/03/06/the-economics-of-language/#" title="" target="_blank" rel="nofollow"><span class="essb_icon essb_icon_share"></span></a><span class="essb_counter_hidden"></span></li>
<li class="essb_item essb_totalcount_item"><span class="essb_totalcount essb_t_r_big essb_total_icon essb_icon_share-tiny" title=""><span class="essb_t_nb">18<span class="essb_t_nb_after">shares</span></span></span></li>
</ul>
</div>
<p>A recent article on the Dhaka Tribune reported that Bangladesh as a
country, as an idea, is rather closely linked with the idea of Bangla as
a language. Languages having much to do with something economists find
fascinating, network effects.</p>
<p>Indeed, we can explain what happens with languages, with Facebook and
with currencies all using these same effects. We end up, as we so often
do in economics, with the answer: “It depends.”</p>
<p>Let us leave aside those cultural and political issues, the
difference between an official language and a mother tongue and mother
language. Instead, consider those as networks. Why is it that Facebook
has conquered every other form of social media? For the same reason that
one fax machine is an expensive paperweight, two allows information to
flow, and millions means those millions can communicate with each other.</p>
<p>So it is with anything subject to strong network effects.</p>
<p>We all go on Facebook because everyone else is there, that everyone
else is there means more people join it. The standards fax machines use
to talk to each other are just the one set of standards precisely so
that they can all communicate.</p>
<blockquote><p>A great truth of political economy is that concentrated interests always beat dispersed ones</p></blockquote>
<p>We might think that the same should be true of language. We could all
communicate with each other much more easily if there was just the one
language used to do so. Often there is a lingua franca which allows this
— say, Latin in the past and English now.</p>
<p>But that’s not really how we humans work. Even Bangla is not the same
in each and every area of the country, just as English isn’t even in
England. There are local dialects which are not mutually intelligible;
we use a simplified or standardized version to speak with people from
other areas — this is where the “BBC accent” comes from.</p>
<p>The same is true of German for example, people from different areas
cannot understand each other using their local variations so they use a
standardized German which no one really speaks at home.</p>
<p>One story — a true one — has it that when John F Kennedy said “Ich
bin ein Berliner” in a speech at the Berlin Wall he actually said in the
local dialect that he was a jam doughnut. Common German and local are
not the same thing at all.</p>
<p>The reason for this is that the language varies from household to
household. Every family does have its own little private inside jokes;
anyone who has ever met the in-laws knows this.</p>
<p>So too do neighbourhoods, villages and so on. A national language is like a patch-work quilt of these local variations.</p>
<p>To put this into economic terms of our networks, yes, we have that
efficiency argument that we should all be using the same
inter-changeable language, but that’s just not what we do. There’s a
strong force, just us being people, breaking that language up into local
variants, as happened with Latin and then Portuguese, Spanish, French,
and Italian over the centuries.</p>
<p>Much the same happens with currencies. Yes, there’s that network
effect of being able to use the same currency everywhere and so being
able to trade over larger distances. This does make us richer.</p>
<p>But there’s also the fact that the same currency must have the same
monetary policy over the same geography. And as we get economic
variations across those local areas the larger the currency area the
more likely it is that the monetary policy will be wrong for one or more
of those localities.</p>
<p>This is as good an explanation as we are going to get for what went
wrong in Ireland and Spain. Euro interest rates were set low for Germany
which was having problems. Too low for those other two economies which
then had massive property booms — booms that collapsed as they
eventually do.</p>
<p>Which is how we get to a general agreement in theory that there’s
something called an “optimal” currency area. Yes, those network effects
are just great, that all use one currency to trade. But there are other
factors pulling in the other direction, insisting that different
currencies should be used in areas with different economic conditions.
Or at least that monetary policy should differ, something only possible
with different currencies.</p>
<p>Another way to put much the same point is that there are economies of
scale. Yes, a larger organization, a larger currency, company or
language should be more efficient. But there are also diseconomies of
scale.</p>
<p>In a company perhaps that the central bureaucracy becomes too rigid,
meaning that change is near impossible. With languages, that there is
this natural variation just between households and this is only going to
get greater the larger the number of families using that language. With
currencies, the limitation is the aptness of the monetary policy over
the different constituent economies.</p>
<p>With Facebook, it appears that the natural efficient size is everyone, worldwide.</p>
<p>In fact, that’s also a useful definition of what we mean by “network
effects.” It’s a subset of the play-off between those economies and
diseconomies of scale. There’s a natural useful size, or efficient size,
to everything.</p>
<p>Economists don’t have much to do with, nor knowledge of, what’s the
effective size for a language like Bangla. But we do end up thinking
about many of the same things in other ways. And the answer is, as it so
often is: It depends.</p>
<p>When we have information on the exact circumstances surrounding the
exact and specific thing we’re talking about, only then can we even
attempt to provide a useful answer.</p>
<p>Which language we all decide to use is, of course, a private choice.
But this does become very important when we decide about currencies and
other economic questions. We just don’t know what the right answer is
until we’ve defined exactly what the real question is.</p></div></div></div>
<br>-- <br><div class="gmail_signature" data-smartmail="gmail_signature">=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+<br><br> Harold F. Schiffman<br><br>Professor Emeritus of <br> Dravidian Linguistics and Culture <br>Dept. of South Asia Studies <br>University of Pennsylvania<br>Philadelphia, PA 19104-6305<br><br>Phone: (215) 898-7475<br>Fax: (215) 573-2138 <br><br>Email: <a href="mailto:haroldfs@gmail.com" target="_blank">haroldfs@gmail.com</a><br><a href="http://ccat.sas.upenn.edu/~haroldfs/" target="_blank">http://ccat.sas.upenn.edu/~haroldfs/</a> <br><br>-------------------------------------------------</div>
</div>