Wednesday, October 26, 2005

Some Economics of Language

“"The English language has become very much – throughout the world – the language of business. So the constant pressure will be there."
- Jean Charest, Premier of Quebec, quoted on the CBC web site.

English is rapidly becoming the world’s second language. The exact dimensions of its dominance are hard to pin down, but there is no doubt that it is growing. Wikipedia puts it at 380 million native speakers, trailing Chinese and Hindi in that category, while being the most widely studied language in the world. In his 1997 book English as a Global Language David Crystal estimates the number who can meaningfully communicate in English at between 1.2 and 1.5 billion.

Its rise is an interesting example of the economics of language. The world needs a common second language because it enables mutually beneficial exchange – of information in this case. That the world’s leading scientific research is published in English means that all the world’s scientists, and the people who use their research, need only learn one language in addition to their own in order to access and add to that knowledge. This dramatically increases scientific productivity and the value of scientific breakthroughs. A common language for science – and to a lesser extent for business, entertainment and the global media – means that more value can be created for more people. In that sense Premier Charest above is a fool for supposing that commercial interests dictate laws preserving the French language in Quebec. (Among other things, store signs must not display any language other than French unless it is smaller than the French.) The entry of a foreign language does not represent “pressure” but opportunity, the opportunity for Quebecois businessmen and consumers to access useful information and trading opportunities that would otherwise be beyond their reach.

English has become a standard in the same sense that the metric system is. That the widely used standard is English (rather than, as it once was, French or Latin) is partly coincidence, a function of first British and then American military and commercial power, and (not often appreciated) of the explosion of scientific research published in U.S. and British universities in the last century. This gives people an incentive on their own to master English. While people accurately and often scornfully note that Americans and the British tend to be monolingual to a much greater degree than other people, this is entirely predictable. The marginal benefit of learning a second language is smaller for people already fluent in the most globally influential one.

In addition to the economics of standards, the theory of money is also useful in understanding languages and why they spread (or don’t). Money is a medium of exchange for goods, and language is a medium of exchange for information. A common language, like a common currency, promotes a greater zone of exchange (although as the costs of exchanging one currency for another have fallen this analogy has become more strained). Columbia’s Robert Mundell won the Nobel Prize in economics for his idea of “optimal currency areas,” the ideal area over which a particular currency should be used. The greater the region of substantial trade, the larger the ideal area; the greater the variance across the region in economic disturbances, the smaller the ideal area. While the euro is a great idea according to the first criterion, the stark difference in economic conditions in booming Ireland and struggling Germany makes the euro zone a mistake according to the second.

And just as currencies can lose their value to convey economic information in conditions of high inflation, so too can linguistic inflation destroy the communicative value of language. Political correctness is the most obvious example; when the cultural stigma attached to calling things as they are is too high, we lose the informative content of language. Important topics become off-limits, and information is lost when we speak of "undocumented immigrants" (which calls to mind someone whose papers blew over the side of the boat on the way over) or "Happy Holidays."

Languages also succeed when the costs of change to accommodate new ideas are small. In this respect there are also several other aspects of English that make it a strong candidate for the global language even if another language, say Hindi or Chinese, becomes important in its own right as the medium through which a significant amount of commercial or scientific exchange is conducted. First, it is (like Britain, Canada and the U.S. themselves) relatively welcoming to immigrants. Both those native English speakers who study Germanic languages and those who study Romance languages immediately notice some common features with English. That is no coincidence; English is said to be a creation of Germanic tribes who came in after the Romans, and presumably the Roman legacy, along with the arrival of Christianity and the Normans provided Latin influences as well. Greek roots are also easily observed in a lot of English. The result is that English is a marriage of these bigger families. As the British empire grew, and as immigrants poured into English-speaking North America, linguistic trade grew too. We owe our “pajamas” (an Urdu/Persian word) to the British Empires adventures in the Indian subcontinent, our “tsunami” to the inadequacy of the older “tidal wave,” and our “ennui” to the French having described that condition in a way that simply cannot be improved upon. (The welcoming, absorbing nature of English is ironically if not knowingly invoked every time it is referred to as the ”world’s lingua franca,” with “lingua franca” of course being a Latin term.)

Another candidate for the office of global language, Chinese, suffers first of all from its many different dialects (although the Chinese government has for years with mixed success attempted to impose the Mandarin dialect on that vast linguistic sprawl), and also because of the fact that it relies on an essentially fixed character set. The ballpoint pen, thus, must be rendered as yuanzibi, which translates as “atomic pen,” with the first two characters that denote “atom” meaning (as best I can translate) “primary seed” or “primary source.” Cumbersome translations must therefore be used in which information is surely lost. All languages are afflicted by this problem, but a static ideographic system will have it worst. In that sense Japanese is somewhat more flexible because it does not rely strictly on Chinese ideographs but on phonetic characters as well. One of their two alphabets is used for foreign words, and so if the native-language base of Japanese were bigger it would have a better chance than Chinese of triumphing as a regional language. (Japanese is much more grammatically difficult than Chinese, but that is another matter.)

Ultimately purely phonetic languages will probably triumph over ideographic ones, and which phonetic languages succeed is a function of greater marginal benefits for mastering a language given the stock of information already rendered in it. By mastering English one gets access to much more information than by mastering any other language, both through accessing the world’s current English output in the media and science, and by getting access to past stocks of knowledge, much of which has been translated.

What makes this rational response to existing incentives troubling is that for those who have a lot invested in the output of other languages, the triumph of English represents a threat to their competitive position. Bengali, Brazilian and of course French intellectuals have all bemoaned the encroachment of English into their lenguages. But that is garden-variety anti-globalization cultural protectionism. The extent to which English will replace, rather than coexist with, other languages in light of economic theory, and who might have the most reason to be upset about that, are topics for another day.

Wednesday, October 19, 2005

Europe, an Island Under Siege

I have often been awfully hard on Old Europe (here, for example). It is a region with many difficulties – an aging population, an over-mortgaged welfare state, etc. But perhaps its greatest liability is that it lies in a neighborhood in much worse shape, one that appears to be collapsing around it. The greatest challenge to the European future may come not from within (imposing as those obstacles are), but from outside.

As an example, the BBC describes the permanent encampments around Ceuta, a tiny dot of Spanish territory on the Moroccan coast. They are populated by desperate migrants from all over West Africa. Even the photo of the modern enclave suggests Moses looking down on the Promised Land:

Below are some statistics (from the World Bank) for both per capita GDP (in constant 2000 dollars) and life expectancy for a variety of countries surrounding the European Utopia under construction:

Per capita GDP:


Note: First year is 1989 for Russia/Ukraine, 1983 for others.

Life expectancy:


On two sides in three of Samuel Huntington’s admittedly crudely defined civilizations – the former Soviet Union, the Arab world and sub-Saharan Africa – Europe faces civilizations that appear, at a minimum, to be in catastrophic short-term decline, with stagnant or falling standards of living and life expectancy. James G. Lacey makes a provocative case (free registration required) that Arab civilization is collapsing for reasons that have little to do with Islam:

Interestingly, on the Arab League's website there is a paper that details all of the contributions made by Arab civilization. It is a long and impressive list, which unfortunately marks 1406 as the last year a significant contribution was made. That makes next year the 600th anniversary of the beginning of a prolonged stagnation, which began a dive into the abyss with the end of the Ottoman Empire. Final collapse has been staved off only by the cash coming in from a sea of oil and because of a few bright spots of modernity that have resisted the general failure.

Statistics tell an ugly story about the state of Arab civilization. According to the U.N.'s Arab Human Development Report:

There are 18 computers per 1000 citizens compared to a global average of 78.3.
Only 1.6% of the population has Internet access.

Less than one book a year is translated into Arabic per million people, compared to over 1000 per million for developed countries.

Arabs publish only 1.1% of books globally, despite making up over 5% of global population, with religious books dominating the market.

Average R&D expenditures on a per capita basis is one-sixth of Cuba's and less than one-fifteenth of Japan's.

The Arab world is embarking upon the new century burdened by 60 million illiterate adults (the majority are women) and a declining education system, which is failing to properly prepare regional youth for the challenges of a globalized economy.

Educational quality is also being eroded by the growing pervasiveness of religion at all levels of the system. In Saudi Arabia over a quarter of all university degrees are in Islamic studies. In many other nations primary education is accomplished through Saudi-financed madrassas, which have filled the void left by government's abdication of its duty to educate the young.

Russia and its “near abroad” too are in an increasingly disastrous state. The current influx of oil revenues masks what appears to be a demographic catastrophe, with a total fertility rate of 1.28 and 1.20 in 2003 in Russia and Ukraine respectively. (The economic data are not much better.) The fact that Islamic and nationalist radicalism appears to be metastasizing and spreading out of Chechnya into other Russian territory is perhaps a sign that Russia no longer has the capacity to defend its territory. While the fact that those fighting the Russians as of yet control no territory even in Chechnya itself indicates that Russia has life in it, the fact that the rebellion is spreading deeper into Russia despite application of much of the military force that Russia is capable of bringing to bear is ominous. So too with the Russian east, where Chinese propaganda now emphasizes the fact (which Russians dispute) that Chinese used to live in and control the region north of the Amur River until they were barbarically expelled by the czars. There are more and more Chinese in that resource-rich area and fewer and fewer Russians, and in the long run that combination plus Russian sovereignty probably cannot stand. We are witnessing the early stages of the unraveling of the gigantic empire built up over centuries.

Given the generous welfare states, high standards of living and free movement within Europe, the decline at least and collapse at worst of the civilizations around them is an ill wind. It is not surprising to see the continent under attack by desperate migrants abandoning their failed homelands for the promise of a better future. If there is no economic or demographic recovery this assault will only worsen.

History is replete with examples of corrupt, declining civilizations being overrun by more vigorous, even if more technologically and materially limited ones – one thinks of the Romans cutting deals with the barbarians for over a century before their last child emperor was deposed, or the crumbling Ming dynasty overrun by the Manchus. But I am not aware of any historical analogies to the modern European problem – a civilization that still functions well surrounded by societies that are crumbling.

What makes this problem especially difficult is that Europe is not well-suited to absorbing the excess mass of these collapsing civilizations, if that is what they are. To be fair, no civilization could absorb the level of attempted migration that we will soon see from Africa, Arabia and the former Soviet Union. But Europe in particular is at best ambivalent about immigration. It has little tradition of mass assimilation, and is prone to migrants who end up as asylees rather than, as in the U.S., as workers (legal or otherwise). These migrants are prohibited from working and thus end up either in the black market, with no legal protections and therefore less allegiance to the society around them, or they don’t work at all, which makes them a public-finance burden and cultivates resentment among the natives.

How might it play out? As the U.S. has discovered with its southern border, using law enforcement to stop the migration is a hopeless task if Europe wishes to remain a society devoted to the rule of law. The amount of police resources necessary, and the power they would have to have, to enable law enforcement to actually solve illegal immigration is unthinkable. So it is inevitable that Europe will demographically look more like the civilizations that surround it, with more Africans, Arabs, Turks, Russians, etc. In principle there is no reason that they cannot be assimilated as full Europeans, as the Roman Empire successfully managed for several hundred years and the U.S. succeeds in doing for the most part now. But in practice it will be difficult. The rigid European economies, which make entrepreneurship outside the black market difficult, combined with the tribal hostility to immigrants who do not look like them, portends trouble. Europeans will demand (indeed are already beginning to demand) higher and higher metaphorical fences, but the migrants will just keep coming, pushed by their own collapsing societies and pulled by the opportunities for those willing to work hard and off the books doing jobs that increasingly scarce Europeans won’t. European politics are going to turn increasingly nationalistic, and the rule of law will probably suffer. But in the end politics and the law will not be enough. The Europeans’ vaunted transnational courts, their body of human rights law, their commissions and ministers will not save them.

As the crisis worsens we should expect to see ever more desperate pleas from Europe for more ways to promote “development,” in an attempt to keep the migrants at home. But the band-aid of “development aid” that the Europeans will promote first and foremost in fact does not promote “development.” The only way to do that is to promote economic reform and engagement with globalization in those countries by, for example, negotiation of sweeping free-trade agreements with Africa and Arabia. But that will threaten the jobs that for Europeans ”are hoarded in a locked cupboard”. Europe’s only hope is that pressure for reform in Africa and Arabia (the former Soviet Union is probably beyond hope) that ironically comes from everywhere but Europe (from the U.S., from the IMF and World Bank, and most importantly from within the afflicted countries themselves) takes root. This will end the pushing of immigrants out of these places. In some places – Mauritius, Uganda – this has already happened. But this is a slim reed on which to hang a society’s hopes, because economic reform and national stability has proven so hard to achieve in so many of these places. More likely is that continuing immigration will steadily erode the cohesiveness of European societies and the moderation of their politics. Some people reading this will probably live long enough to see the end of the European Union over immigration tensions and perhaps major changes in the basic political and tribal natures of these societies.

Monday, October 10, 2005

What Exactly Did Tom Delay Do Wrong?

The majority leader of the United States House of Representatives, Tom Delay, has been indicted by several grand juries in Texas. The nature of that indictment, and what it says about the law, is worth thinking about. Here is the relevant excerpt from one of the indictments, which can be found at Findlaw:

…the defendants herein, with the intent that a felony be committed, did enter into an agreement with one or more of each other or with a general purpose political committee known as Texans for a Republican Majority PAC that one or more of them would engage in conduct that would constitute the offense of knowingly making a political contribution in violation of Subchapter D of Chapter 253 of the Texas Election Code, a violation of Sections 253.003 and 253.094 and 253.104 of the Election Code, in that said contribution was made directly to the Republican National Committee, a political party, during a period beginning sixty days before the date of a general election for state and county officers and continuing through the date of the election, and indirectly to candidates for the Texas House of Representatives, and that said contribution included a prohibited political contribution by a corporation; and that John Dominick Colyandro, and James Walter Ellis, and Texans for a Republican Majority PAC did perform overt acts in pursuance of the agreement, to wit: John Colyandro and Texans for a Republican Majority PAC did accept contributions from corporations, namely Diversified Collection Services, Inc. in the amount of $50,000, and Sears, Roebuck and Co. in the amount of $25,000, and Williams Companies, Inc. in the amount of $25,000, and Cornell Companies, Inc. in the amount of $10,000, and Bacardi U.S.A., Inc. in the amount of $20,000, and Questerra Corporation in the amount of $25,000; and James Ellis and Texans for a Republican Majority PAC did tender, deliver, and cause to be tendered and delivered to the Republican National Committee and Terry Nelson, a representative of the Republican National Committee, a check (a copy of which is hereinafter reproduced) payable to RNSEC (the Republican National State Elections Committee, a nonfederal component of the Republican National Committee) in the amount of $190,000, said check being from the same bank account into which the above-described corporate contributions had been deposited; and James Ellis and Texans for a Republican Majority PAC did provide the said Terry Nelson with a document that contained the names of candidates for the Texas House of Representatives and amounts to be contributed to each of the said candidates, namely, Todd Baxter, Dwayne Bohac, Glenda Dawson, Dan Flynn, Rick Green, Jack Stick, and Larry Taylor; and James Ellis and Texans for a Republican Majority PAC requested, solicited, and proposed that the Republican National Committee and the Republican National State Elections Committee make political contributions to said candidates after the aforesaid check was delivered to Terry Nelson; and John Colyandro did sign the aforesaid check; and John Colyandro did deliver the aforesaid check, and did cause the aforesaid check to be delivered to James Ellis by instructing Russell Anderson to send the aforesaid check to James Ellis;

The function of the law, one supposes, is to encode the difference between the immoral and the moral action. Sometimes the actions are not obviously immoral, but in context are. If it is true, for example, that Bush Administration officials leaked the identity of a national-security employee, while that identity is protected by statutes designed to insure that covert operations stay covert, the objective nature of such a prohibition is easy to understand. Even if the name was leaked to show that critics of a Bush Administration policy (in this case, promoting the invasion of Iraq by talking about weapons of mass destruction which ultimately proved not to be there) had a partisan agenda, there is still objective value in deterring the exposure of knowledge that, once it moves out into the public square, damages the national security of the U.S. (Whether the U.S. should take such a gigantic role in the world, which requires that we have a correspondingly gigantic national-security apparatus, is an interesting question, but a separate one.)

But assuming that he did what the indictment says he did, what objectively has Rep. Delay done wrong? He has moved money around, but money is the mother’s milk of politics. That he has moved it from federal organizations to state ones, or vice versa, or that he has solicited it from a particular type of voluntary association known as the corporation, is not obviously immoral, the sort of thing that the law should try to prevent, even if it is illegal. Why should money not be allowed to flow up from “national” groups and down to “state and local” ones? Why should certain types of associations – GM, say – be sharply limited in how they can engage politically while others – environmental groups, or sheep farmers – be subject to different rules? This is the essence of arbitrary government – the different treatment of people in similar circumstances – that many historians warn us is the key requirement in the erosion of constitutional liberty.

Now of course we all prefer to live in societies where laws are largely obeyed, but we also prefer to live in societies where some care is taken before the laws are written – where the law is not used as an arbitrary tool to protect some interest groups and punish others. And the entire campaign-finance apparatus is about this. It is a spider’s web of confusing, arbitrary restrictions indicating that money can be organized through these procedures and not those. Economic theory would predict that such laws would be supported by pressure groups benefiting from them. And among the biggest supporters of campaign-finance rules are incumbent politicians, notably Sen. John McCain of Arizona, who has never gotten over having his reputation tarnished by being associated with the convicted banker Charles Keating in a donations scandal from the 1990s. More generally, the more campaign-finance restrictions there are the higher the transaction costs of building the infrastructure to challenge an incumbent politician. For the challenger the marginal cost of organizing the fundraising needed to mount an effective campaign are large when there are many campaign-finance restrictions. For an incumbent, the network already exists from prior elections, and so the marginal costs are lower. Unsurprisingly, the rise of campaign-finance restrictions has coincided with the increasing impossibility of defeating incumbent politicians. The U.S. has a reelection rate in the House that routinely exceeds 90 percent, and in state legislatures it is often as bad.

We should care about such things because along with federalism and the separation of powers, elections are a key ingredient in the Constitution’s foundation of liberty. And with the disappearance of competitive elections the democratic corner of this foundation has now rotted away to nothing. Campaign-finance restrictions are no answer, because the problem is not that incumbents get too much money. The problem is that they are entrenched monopolists, protected by the usual rent-seeking in which such firms behave. Campaign-finance restrictions make it harder for political entrepreneurs to displace the entrenched monopolists, and so the political market becomes uncompetitive. (People forget that Eugene McCarthy, whose anti-war 1968 candidacy drove Lyndon Johnson from the field and is often held up as the ultimate insurgent campaign, never would have gotten anywhere had it not been for funding by the GM heir Stuart Mott and several Wall Street executives. So too with Ronald Reagan's first foray into California politics.)

The editorial boards of newspapers are also frequently in favor of campaign-finance limitations (The New York Times particularly so), and this too is not surprising from an economic point of view. These organization wish to influence the direction of public policy, and if competition in the market for ideas is limited by restraining the spending of political candidates, their views face less competition. So this too, for all the media’s self-righteous posing on such questions, is just raw self-interest masquerading as principle.

The writer Tacitus reminded of this long ago. A Roman senator in the first century of the empire, he wrote disparagingly of the corruption that quickly manifested itself once the original emperor, Augustus, was gone. Like all histories his is not the last word, but he still has much useful to say to us as the law becomes less about defining the boundary between acceptable and unacceptable behavior for all citizens in all circumstances and more a way to promote the factional privileges that Madison warned us about in Federalist 10. (My translation is of the Annals is from

Mankind in the earliest age lived for a time without a single vicious impulse, without shame or guilt, and, consequently, without punishment and restraints. Rewards were not needed when everything right was pursued on its own merits; and as men desired nothing against morality, they were debarred from nothing by fear. When however they began to throw off equality, and ambition and violence usurped the place of self-control and modesty, despotisms grew up and became perpetual among many nations. Some from the beginning, or when tired of kings, preferred codes of laws. These were at first simple, while men's minds were unsophisticated. The most famous of them were those of the Cretans, framed by Minos; those of the Spartans, by Lycurgus, and, subsequently, those which Solan drew up for the Athenians on a more elaborate and extensive scale. Romulus governed us as he pleased; then Numa united our people by religious ties and a constitution of divine origin, to which some additions were made by Tullus and Ancus. But Servius Tullius was our chief legislator, to whose laws even kings were to be subject.

After Tarquin's expulsion, the people, to check cabals among the Senators, devised many safeguards for freedom and for the establishment of unity. Decemvirs were appointed; everything specially admirable elsewhere was adopted, and the Twelve Tables drawn up, the last specimen of equitable legislation. For subsequent enactments, though occasionally directed against evildoers for some crime, were oftener carried by violence amid class dissensions, with a view to obtain honours not as yet conceded, or to banish distinguished citizens, or for other base ends. Hence the Gracchi and Saturnini, those popular agitators, and Drusus too, as flagrant a corrupter in the Senate's name; hence, the bribing of our allies by alluring promises and the cheating them by tribunes vetoes. Even the Italian and then the Civil war did not pass without the enactment of many conflicting laws, till Lucius Sulla, the Dictator, by the repeal or alteration of past legislation and by many additions, gave us a brief lull in this process, to be instantly followed by the seditious proposals of Lepidus, and soon afterwards by the tribunes recovering their license to excite the people just as they chose. And now bills were passed, not only for national objects but for individual cases, and laws were most numerous when the commonwealth was most corrupt.

The economist Friedrich Hayek, who was so smart about so many things, long argued that equality before the law – the idea that the law does not impose the burdens and benefits of citizenship arbitrarily and unequally – is fundamental to liberty. The lesson of this school of thought when we think about the long-term health of the republic concerns the nature of what exactly Tom Delay did. The increasing complexity of the campaign-finance laws is a way for politicians to simply smite their enemies and discourage competition from outside the professional political class. When the law goes, everything else that we value goes soon after. And thus the question to ask about Tom Delay is not “What did he do that was illegal?” The question is, rather, “What did he do that was wrong?”