In a recent blog post I addressed the Sapir-Whorf Hypothesis, which holds that language affects thought because humans think in terms of the languages that they speak.
Those of us who speak more than one language know firsthand that some ideas are easier to express in some languages than in others. The Sapir-Whorf Hypothesis implies that certain concepts should be easier for speakers of some languages to grasp than for the speakers of other languages that lack words or phrases to express those ideas naturally, and that by learning other languages one’s worldview can change.
For example, try explaining the difference between ‘freedom’ and ‘liberty’ to someone who does not speak English, or the difference between ‘greedy’ and ‘selfish’. Alternatively, note that in German the word for ‘policy’ — Politik — is the same as the word for ‘politics’; and the word for ‘debt’ — Schuld — is the same as the word for ‘guilt’. One can only wonder to what degree such linguistic differences affect differences in individuals’ perceptions of the world and each other, especially with languages as diverse as English and other Western European languages on the one hand and, e.g., Arabic, Chinese, and Persian on the other.
In other words, culture matters.
Related to this is the famous — though inaccurate — claim that Eskimos have an extremely large number of words for ‘snow’, because it is such an integral part of their lives, and subtle differences have significant impacts on their lives. Similarly, financial managers have more than one term for ‘return on investment’, including return on equity (ROE), return on assets (ROA), return on sales (profit margin), and several others; and several terms for ‘profit’, including net income, earnings before tax (EBT), earnings before interest and tax (EBIT), earnings before interest, tax, depreciation, and amortization (EBITDA), and gross profit. When one studies business, as opposed to economics, one comes to see instinctively that ‘return’ and ‘profit’ are vague terms; more categories than specific concepts.
Seen in this light, business education is largely a branch of language education. We are teaching concepts and terms with specific meanings as much as — if not more than — we are teaching particular skills. Granted, we use graphs and equations to illustrate the points that we are making, but these are shorthands for the underlying stories that we are telling.
Whether one is dealing with self-interest in economics, risk management in finance, the difference between assets and equity in accounting, or human resource psychology in management, one is telling stories. As one tells those stories, and students begin to see the world in terms of those stories, one leads students to see the world differently. If that worldview conforms to reality more accurately than conventional wisdom does, then students who embrace that worldview – learn that language or dialect, as it were – are in a position to benefit from that knowledge by almost literally seeing the world through different eyes.
Given that the vast majority of individuals in urban areas around the world are engaged in business at some level, it is a travesty that Accounting, Economics, Finance, and Management Psychology and Sociology are not standard features of the primary and secondary school curriculum.
If we are going to entrust individuals with the vote, then they should be able to tell legitimate policy proposals from populist magical thinking. It is one thing to disagree over legitimate policy proposals, because all value is subjective, but it is another thing entirely, when political activists and candidates call for and promise dancing unicorns, singing bunnies, and rainbow fountains. And, it is yet another thing when voters are unable to distinguish between the two categories.
Our goal here is to provide some tutorial services in the language of business.
Invest accordingly.
Prof. Evans