“Fun With Words”: Economic Inequality and Language

July 30, 2017

Professor Robert Putnam of Harvard University recently gave a fascinating talk on equality and social cohesion at the Federal Reserve Bank of Minneapolis.

 

The key idea of the lecture was roughly this. Income equality in the US since 1900s has followed an inverse-U pattern. Income equality was low in 1900. Equality then increased until something happened in the mid-1960s when it began to decline.

 

It turns out that other measures of social and economic cohesion have followed the same inverse-U pattern: low, high and then low again. Professor Putnam shows that such diverse aspects of society as membership in civic organizations, philanthropic giving, political unity, progressivity of the tax system have all followed the same inverse-U pattern.

 

What may be the underlying driver behind all of these trends? Could it be that all of them share a common cause?

 

Professor Putnam provides a provocative piece of evidence that may hold the key to the puzzle. He shows that the usage of the word “we” relative to the word “I” in American books has followed the same inverse-U pattern:

 

I have replicated the same result, focusing on just the two key variables. Here it is:

Income equality here is the share of total income that goes to the bottom 99% of the income distribution (using data from the World Wealth & Income Database); the ratio of the word "we" relative to "I" is taken from Google Ngram.

 

So maybe the reason why income inequality has soared in the US is that Americans have become too much "I" and too little "we".

 

Before we jump to any conclusions, though, it would be useful to know if the relationship was true in other countries. For that reason, I dived into some data from Germany. It turns out that the use of “we” relative to “I”—that is, “wir” vs. “ich”—also declined in Germany in the 20th century, even more so than in the US:

However, Germany has not seen much of a decline in economic equality. Indeed, the two do not seem to be much related to each other in Germany in the 20th century:

It seems very plausible that our language tells us something about our values which then in turn influence our actions. But the link between the usage of “we” vs. “I” and economic equality does not seem to be universal.

 

Still, the talk by Professor Putnam is really interesting and thought provoking, and I strongly recommend watching it to anyone interested in the topic.

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