THAT CERTAIN JE NE SAIS QUOI OF LES ANGLOPHONES
There's been a lot of bad news out there in the world economy
lately. Supposed economic superpowers like Germany and Japan have
fallen on hard times; Asian tigers that thought the future belonged
to them suddenly find that it belongs instead to Westerners with
ready cash; Latin Americans who thought they had put their past
behind them are watching with horror as financial crisis strikes once
again. And yet there are also some surprisingly happy economic
stories out there. What do they have in common?
The biggest favorable surprise is, of course, the amazing
performance of the U.S. economy. But there is Australia as well--
smack-dab in the middle of the crisis zone, riding the storm out
without pain. (Australia's economy grew nearly 5% over the past year,
while neighboring Indonesia's shrank 14%.) There is Ireland, the
recently dubbed "Celtic tiger," growing at an amazing 8% rate for the
past five years. Then there are the British: They have been
suffering a bit of a wobble recently, but the fact remains that not
long ago they had the highest unemployment rate among major European
countries, and now they have the lowest. Nor should we forget Canada
(it's that cold place north of here, with all the female singer-
songwriters): While it has lagged behind the U.S., it has strongly
outpaced Europe and Japan in growth and job creation.
A lot of effort has gone into figuring out what the world's crisis
countries have in common--indeed, the search for "indicators of
vulnerability" has become a substantial industry. But what about
indicators of invulnerability? What do the countries that have
managed to remain prosperous while the world suffers have in common?
Well, the answer is plain to the naked eye--or make that the naked
ear. Yes, the common denominator of the countries that have done
best in this age of dashed expectations is that they are the
countries where English is spoken.
As Dave Barry would say, I am not making this up. Statistical
analysis suggests that there is a real sense in which the English-
speaking economies tend to have a common destiny, even when they
seemingly shouldn't. Consider the case of the U.K.--which is, say
sensible people, a European nation even if some of its politicians
wish it weren't. The U.K. does much more trade with its European
neighbors than with its transatlantic cousins. But the U.K. business
cycle, it turns out, is highly correlated with that of the U.S.
(since 1982 the unemployment rates have had a correlation coefficient
of 0.74; a 1.0 means perfectly correlated) and not at all correlated
with the new euro zone (correlation coefficient of -0.08!).
Australia may be a sheep-raising and mining economy on the other side
of the world, but its cycle, too, is remarkably correlated with what
happens in the U.S.
So what do the English-speaking countries have in common that
might explain why they are all doing relatively well right now? I've
done some research--namely, talked to a couple of colleagues over
lunch--and come up with the following speculations:
First, there's the Alan Greenspan theory--or is it the Larry
Summers theory? Economic policy in English-speaking economies tends
to be run by smart economists with one foot in the academic world,
who therefore make better decisions than the doctrinaire mandarins
who run ministries of finance. And in a world where the rules have
suddenly changed, the story goes, clever men and women who went to
MIT are better able to adapt than bureaucrats whose only expertise is
in office politics.
A slight variant is the Margaret Thatcher theory. In the 1980s
there was an ideological groundswell in the English-speaking world in
favor of markets and against government intervention; perhaps the
rest of the advanced world missed the tide because it couldn't read
Milton Friedman in the original.
Then there's the globalization theory. English is the language of
the global economy--business must use some lingua franca, and no
other tongue has the necessary critical mass. That means people who
have grown up speaking English have an automatic head start.
Finally, there's the Internet theory. Not long ago, French
President Jacques Chirac lamented that the Internet is an "Anglo-
Saxon network"; what he probably meant was "English speaking." And
it is, as is the whole new technological universe. One particular
point that a friend made to me is that e-mail and the Internet put
people who use nonalphabetic writing, like the Japanese, at a
On the whole, I'd probably place most of the emphasis on Greenspan
and Thatcher. But one thing is clear: Something about the
Zeitgeist-- sorry, I mean the spirit of the time--favors those of us
who speak English. Let's enjoy it while it lasts.