I always wondered what ‘plan B’ – the theoretical ‘way out’ every economist refers to when critiqued for still falling back on ‘homo œconomicus’-based assumptions – really is. Apparently, behavioural economics does away with pure self-interest, with supply and demand magically finding their harmonious balance guided by the market(er)’s invisible hand (while actually already the Smithian ‘invisible hand’ must somehow have been wrongly translated from Scotland; his metaphorical limb was arguably one of ‘moral sentiment’, of compassion and of providence – much more a natural, a godly rather than a market hand). But how do behavioural economists work? Are they experimenting in the lab, conducting test series just like Milgram trying to find out about the relation between individual morality and obedience – only under the heading ‘what investment decision does he take under conditions of electroshock’? Do they absurdly combine psychological (i.e. uncanny) insights with economic data (i.e. myriads of already manipulated survey answers), detect (i.e. mystically oversimplify) causal relationships and publish the newfound truths (i.e. results of regression analysis) in shiny TED videos?
If the latter is true, Keith Chen is surely an outlier of this species of economists. He is a vanguard, almost a Žižekian pop-intellectual fulfilling the necessary clichés (receding hair, slightly squint-eyed, untucked shirt). His theory is daring and far-reaching. It could not only influence, but revolutionise our way of thinking about the economy (at least our way of excusing economic incompetence). Chen found (TED / paper) a relationship between language and economic behaviour, more precisely between a language’s capacity to use the present tense to talk about future events and the individual’s propensity to invest in the future – to save. A division between present and future animates people to perceive the future as disjunct from the present resulting in the neglect of behaviour benefitting your future rather than your present self. In tongues such as English, Greek or Portuguese the future has to be ‘formularised’. The English cannot say ‘It rains tomorrow’ – whereas in German ‘Es regnet Morgen’ is very common (says a German speaker). The English language requires the speaker to make a distinction between present and forthcoming events, while German does not.
Image: Screenshot from the TED presentation
In a second step, Chen compared his assumptions on languages with economic behaviour in particular countries. The results are thrilling. The savings rate in countries with a futureless language on average appears substantially higher than the rate in ‘futured countries’. On average, Germans save 10% more of the combined GDP than the British do; the Chinese save about 20% more than Greeks or Indians. This finding mirrors nicely what recent figures from Scottish Widows (part of Lloyds Banking Group) suggest for the English case: currently, around 15 million Brits are not saving money for future eventualities, while an astonishing 13% of UK citizens claim to have no savings at all. So from now on, can we excuse this ‘propensity to spend’ by pointing to a ‘disabled’ English language?
The link between language and savings behaviour even holds when we control for variables such as education, the household’s economic situation, family structure or religion. Chen observes the same pattern for families in a similarly structured life in the same neighbourhood of for instance Belgium, one speaking Flemish and one speaking French. The Flemish family knows how to save, the French doesn’t. The link can be pushed even further. In terms of statistical correlations, the connection is not limited to purely economic behaviour alone. Chen argues in his paper that “languages that grammatically associate the future and the present, foster future-oriented behavior” outside of economic matters. He find “that speakers of such languages: save more, retire with more wealth, smoke less, practice safer sex, and are less obese.”
This analysis gives us a powerful tool. A powerful excuse. Take the example of the UK. Now that we know what our language does with us, it is no wonder that it is in Britain – a country where most people converse in a futured language (besides English mainly Irish (1%) and Polish (1%)) where the Bullingdon Club squanders £50 notes in front of beggars. It is not surprising that it is at a Cambridge college where the majority of fellows barely speak a (linguistic rather than mathematical) futured language fluently (not to mention non-futured languages), that data about dining expenses makes us recall excessive feasts. They cannot change their behaviour – how is it possible to save money when you cannot talk about it? We are not to blame them. And we are also not to blame the banks and the bankers for not saving, for not being more cautious about the future of their institutions and us. We are to blame the linguists for not finding out about this earlier.
This is utter nonsense. How far one can push scientific insights – and how far scientists push their own findings – has to be clearly differentiated. Chen is aware of the shortcomings of his approach. He is very careful in interpreting his results and shows an explicit openness for critique. Geoffrey Pullum for instance expressed substantive distrust in the categories of ‘strong vs weak FTR languages’. In his answer, Chen admits that the categorisation of languages according to the so-called EUROTYP project and Östen Dahl is problematic. Indeed even in English there are many exceptions to the rule that you cannot express future behaviour in present tenses. In light of this, he limits his argument to a statistical relationship between certain features of language and particular economic behaviours. In no way does he argue on the contrary for a ‘propensity to squander’ in countries where futured languages are dominant. In no way can we use his findings to explain (or even worse: excuse and naturalise) excessive bonuses. His data explicitly presents a strong relationship between linguistic and economic data for which further explanations have to be found. In this way, Chen’s paper is an auspicious example of how supposedly implausible relationships can become convincing in interdisciplinary research. Hopefully, however, only The Sun’s headline (if Sun reporters only watched TED videos), will (for now) try to develop absurd speculations based on Chen’s findings