Freakonomics Radio - the podcast that explores the hidden side of everything - ventures into that very question along with the other implications of linguistic diversity at both macro and microeconomic levels. In general, they find that the multitude of languages has a negative impact on economic growth. In looking at the European market, Shlomo Weber, gives a real world example of why not having one unified language in the EU creates a barrier to trade: "[To] give another, even more painful example, about the patent application: if you need a patent in different countries, you really have to do it in every country, because there is no unified legislation across the Union. Every company in every country has to go for different patent, and it delays so many things."
His economic analysis shows that there is indeed a conflict between localization and globalization as we can also observe positive impacts between two countries who trade in the same language. “Weber documented that a 10 percent increase in the probability that two people from different countries share a language increases their trading by 10 percent.”
Some other major takeaways from this week's episode:
- Linguists predict that of the roughly 7,000 languages now spoken on earth, some 3,000 will go extinct within the next century
- Language and religion are the two most important factors in the self-identification of people and groups
- We spend roughly $40 billion a year on “global language services” - primarily translation and interpretation
- Another $50 billion a year is spent learning other languages
A very interesting post indeed and the way information has been shared is also very lively to read. The point raised in start about "similar" countries tend to engage in high volumes of trade with one another. But why? If we see around us most of the countries are trading with neighboring countries and its very true that it save so much cost that it effect the cost of good sold which mean that good can be provided to the society at a lower price. Importing stuff from China to America may be cheaper but it has its own issue and costs but if same thing can be imported from Mexico or Brasil it will be cheaper as shipping charges are huge in some cases. The other interesting point i about localization and globalization which can be discussed a number of times with respect to economical benefits and problems faced in both. trading between countries do encourage localization and if we do it a global level it is helping globalization. The piracy and patent rights along with tariffs and customs duties are main issues in globalization as they must be resolved for better trade and movement of goods world wide.
ReplyDeleteHaving language and proximity effect trade deals is an interesting topic. This is fascinating for the fact that it seems like common sense but no one ever thinks about it. Speaking to someone who speaks one’s own language would make that person more comfortable therefor make you more comfortable making a deal with them. At the same time, one would think why would that matter if what should matter is resources and cost. One reason speaking the same language would matter would be a convenience for a country. If it takes time for a country to respond to another country because there are trying to find someone to translate your message, it could be hassle and time spent that could be utilized for something better. Another reason speaking the same language would increase a countries tendency trade with them efficiently. One wouldn’t have to worry about miscommunication a message which would give them ease of mind. As well as not paying translators one of the major findings was that $40 billion a year is spent on “global language services.”
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