Economics and English: language growth in economic perspective.

• Author: Reksulak, Michael

And the LORD said, "Look they are one people, and they have all one language; and this is only the beginning of what they will do: nothing that they propose to do will now be impossible for them. Come, let us go down, and confuse their language there, so that they will not understand one another's speech." (Genesis 11:6-7)

The bond of language is perhaps the strongest and most lasting that can unite men. (Tocqueville [1835, 1840] 2000, p. 29)

I am a friend to neology. It is the only way to give to a language copiousness and euphony. Without it we should still be held to the vocabulary of Alfred or of Ulphilas: and held to their science also;... (Thomas Jefferson to John Adams, August 15, 1820; emphasis in the original)

POLONIUS: What do you read, my lord? HAMLET: Words, words, words. (Act 11.2)

1. Introduction

   Language use is a distinguishing characteristic of Homo sapiens. (1) Human beings are programmed to construct hundreds of thousands of words from a comparative handful of sounds. a phenomenon known to linguists as duality (Pinker 1996).

   From a purely economic perspective, language can be seen as an exchange-facilitating institution, just as important in its own fight as other, more deeply studied underpinnings of orderly markets, such as clearly defined property rights and rules for enforcing contracts. Exchange, of course, is not the only economic function of language since language can be used for many purposes, including coercion ("arrest that man!"). The paradigm of exchange has nonetheless proven analytically fruitful and, indeed, has been applied by economists to help explain the functioning of political markets, patterns of trade within the family, crime, drug addiction, and many other seemingly "noneconomic" aspects of human behavior (e.g., Becker 1976, 1996; Becker and Murphy 2001). Viewing language as an exchange-friendly institution locates the study of its growth and impact squarely within the singular perspective of economic science. (2) This analytical framework in no way diminishes the importance of more traditional approaches to the subject; it simply calls attention to an emerging literature in which economists have begun colonizing the study of language. (3)

   Language, as Friedrich von Hayek (1960) stressed repeatedly, is an example of spontaneous order. In other words, language was not created deliberately; it evolved in the absence of human plan or conscious design. Viewed in that perspective, the evolution of language has much in common with that of another exchange-friendly institution--money. Both of these institutions emerged spontaneously as rational individuals searched for mutually acceptable ways of communicating and of acting on their natural propensities to "truck, barter, and exchange one thing for another" (Smith [1776] 1976, bk. I, chap. II, p. 17). Over time, independent responses to novel situations produced words and rules for their use that facilitated communication in much the same way that attempts to cope with the rarity of dual coincidences of wants led to the selection of one commodity as money. As Hayek (1988, p. 106) puts it,

   Trade, migration, and the increase and mixture of population must not only have opened people's eyes, but also loosened their tongues. It was not simply that tradesmen inevitably encountered, and sometimes mastered, foreign languages during their travels, but that this must have forced them also to ponder the different connotations of key words (if only to avoid either affronting their hosts or misunderstanding the terms of agreements to exchange), and thereby come to know new and different views about the most basic matters. (4) What materialized over millennia as a result of competition among alternative media of exchange and means of communication were "efficient" monies and languages.

   In modern parlance, language is the archetypal "network" good (i.e., it exhibits positive externalities in consumption). (5) Unlike money and most ordinary goods, language derives value not from scarcity but from ubiquity. Words and rules for their use become more valuable the greater is the number of people who learn and apply them consistently in everyday discourse. (6)

   Language, like money, is not static. "Many different commodities," including cattle, salt, sea shells, and tobacco, "were successively both thought of and employed" as units of account, stores of value, and media of exchange (Smith [1776] 1976, bk. I, chap. IV, p, 27). New words are likewise coined or borrowed from other tongues, old words take on new meanings or become obsolete, and usage rules change as the circumstances of time and place change. In this article, we take a Hayekian or evolutionary approach to describe the development of the English language. To do so, we exploit the CD-ROM version of the second edition of the Oxford English Dictionary (OED), which among its many other valuable features identifies the date of the earliest recorded use of each word by means of an illustrative quotation. (7) These dated quotations allow us to construct an annual time series of words, beginning with the year 252 CE and ending in 1985.

   English is, of course, not the world's only language. Spoken today by more than 300 million people (Bryson 1990, p. 11), it ranks a distant second to Mandarin Chinese, which counts some 750 million speakers (Bryson 1990, p. 181). English is, nevertheless, the official language of 44 countries (compared to 27 for French and 20 for Spanish), populated by 1.6 billion souls, or about one-third of humankind (Bryson 1990, p. 181). The number of English words in common use (roughly 200,000) exceeds that of German (184,000) and is double that of French (Bryson 1990, p. 13). What is more important for our purposes is that no other language has a dictionary comparable to the OED. Lacking alphabets, traditional Chinese and Japanese dictionaries are organized on the basis of radicals (semantically significant pen strokes used in composing other characters). And, as discussed here, English dictionary writers have never been subject to the stultifying regulation of a language purifier like the Academic Francaise.

   We fully recognize that the procedure adopted by the editors of the OED for dating words in use at particular times is far from perfect. Dr. James Murray, the editor in chief of the dictionary's 10-volume first edition, published in 1928, began soliciting quotations in 1858 from an army of some 1,300 (eventually 2,300) scholars (Bate [1975] 1988, p. 251), including, most famously, convicted murderer Dr. W. C. Minor (Winchester 1998). Murray then selected from an estimated 5 million such submissions the earliest quotation best illustrating the meaning of each of the 252,200 entries ultimately included in the OED. (8) A similar procedure was adopted when work on the 20-volume second edition began. Nearly 2.5 million quotations were chosen to illustrate the meanings of the second edition's 291,500 headwords, which incorporated material published in a four-volume supplement to the first edition that appeared seriatim between 1972 and 1986. (9)

   Words obviously had been adopted by speakers of the English language prior to their first appearance in print: "Dictionaries are but the repositories of words already legitimated by usage." (10) Just as obviously, it may well be possible to find quotations illustrating word meanings that pre-date the written passages selected for inclusion in the OED. (11) Even the definition of the word "word" is somewhat muddy: the first dated entry in the dictionary's second edition is in fact not a singular word but the compound noun construction "common prayer." Moreover, the greatest of the modern English dictionaries does not define large numbers of scientific and technical terms: it even fails to document fully the language's richness. Despite these ambiguities and omissions, the OED supplies an internally consistent data source for dating the origins of the words that serve as inputs to spoken and written English. One has to start somewhere. We start with the undisputed authority, the OED.

   This article is organized as follows. Descriptive statistical analyses of the time series of words added to the English language since 252 CE are presented in the next section. (12) Section 3 advances some testable hypotheses about the economic forces that might help explain the observed growth of the language over time. There we report evidence from the 19th and 20th centuries that the production of new English words is characterized by increasing returns with respect to both population and national wealth and that neology is a function of foreign trade and the size of government. Section 4 summarizes and concludes the article.

2. The Growth of the English Language

   Words are the building blocks of language but are not themselves language: "People do not just blurt out isolated words but rather combine them into phrases and sentences, in which the meaning of the combination can be inferred from the meanings of the words and the way they are arranged" (Pinker 1999, p. 4). Linguists call the rules for assembling meaningful combinations of words a grammar, the most elementary building blocks of which are noun phrases, joining a determiner, such as "a" or "the," with a noun, and verb phrases, joining a verb with its direct object, a noun phrase. A sentence, in turn, is composed of a noun phrase followed by a verb phrase. Hence, while the word "rose" is not language, it is an essential ingredient in the building of noun phrases, such as "a rose"; verb phrases, such as "is a rose"; and sentences, such as "a rose is a rose" (Pinker 1999, pp. 4-5). (13)

   From an economist's perspective, words can be likened to "inputs," while a language's grammar is a "production function" that chooses the best set of inputs and rules for combining them to produce effective communication. Although there are exceptions to Pinker's assertion that isolated words are...