One of the by-products of writing a blog is a close acquaintance with words. And, more relevantly, a slight fascination with them.

Let me pause right here and say: Yes, this is still going to be a post about finance and economics. Yes, linguistics will be involved. And, actually, economics is a social science, so language is part of it.

Getting back to my lead-in… I listened to a podcast recently on word aversion, being that extraordinary discomfort caused by words with unfortunate associations. The most common example is the “c” word, which is probably why it’s classed as swearing. But according to that podcast, topping the list of words that make us cringe is “moist”.

Personally, I take issue with the words “juicy”, “crud”, and “canker”. I also dislike “crack”, “cranny”, “carbuncle”, “bunion”, “tit” and “sphincter”. And I got all kinds of uncomfortable writing that list.

Here’s what I thought was interesting: having emotional attachment (or abhorrence) for the language I converse in…

Alright. So that’s my first observation, which I’d like to put on ice for a bit, while I back up and re-introduce one of my favourite topics: “rationality” and, specifically, the lack thereof when it comes to making mindful decisions about money/investment/career/life.

The Art of “Good” Decision-Making

When it comes to making the big choices, there is no such thing as a good decision. Or a bad one. Those adjectives are unhelpful here. Others that may be more useful: “well-informed”, “reasoned”, “careful”, “foolish”, “misguided” and “like nails scraping the blackboard of my soul”.

“Good” and “bad” require omniscience and prophetic insight into the outcome of the choice after the decision has been put into action. At best, given our limitations in this area, we can make a probabilistic guess as to the outcome: but that puts us back into the categories of “reasoned” and “well-informed”.

Assuming that we all agree that informed choices are better than uninformed ones, then we face the following barriers to informedness (enlightenment?):

  1. lack of knowledge
  2. lack of experience
  3. prejudice

The first two, you can go out and get. Or you can rely on the assistance of those with less lack*.
*Random aside: do you think this counts as a double negative?

Prejudice, however, requires self-introspection, self-awareness, and self-improvement.

How awkward.

Because that sounds like a lifetime of seat-of-the-pants decision-making ahead while I work on the self-actualising. So maybe I’ll get to make a rational decision on my death-bed. And that probably won’t please my future progeny, who might be unimpressed with an emotionless “I’m leaving everything to an orphanage because you kids must learn to fend for y’selves” ending.

If only there was a way to circumvent that. Some kind of clean-slate platform that allows the decision-making to be made uncoloured…

Back to the Emotive Words (Observation Number 1)

There is a philosophical viewpoint which sees language as the outward expression of an intrinsic culture. That is: I don’t really “speak” English. I am English, and my Englishness is expressed through the language. I perceive the world in pictures, I form thought in pictures, and there is no thought barrier between pictures and words:


The main implication: I will find it hard to speak French because my English self has to take its natural expression and then divert it through an analytical translation process. There are some extra steps involved:


So the question is: would thinking about decisions in a foreign tongue make one more rational?

After all, something like my word aversion has been built up over a lifetime of experiences. But where foreign words are concerned, it should be like virgin snow, unsullied by the associations of my past. And perhaps something similar would apply to a thought process if it takes place in a non-mother tongue?

The Foreign Language Effect

Clever people from the University of Chicago tested the principle in 2011, by asking whether the loss aversion bias would be as impactful if it was thought about in a foreign language.

So here’s the standard experiment for demonstrating that we’re guilty of a loss aversion bias:

  1. You present two samples of people with that same scenario, framed in one of two ways:
    1. The first group hears the following: “Doctors are fighting a disease that could kill 600,000 people. They can focus their attention on Medicine A, which is guaranteed to save 200,000 lives; or Medicine B, with has a 33.3% chance of saving all 600,000 lives, and a 66.67% chance of saving no lives at all. Which would you get them to focus on?” Let’s call this the “Gains” option.
    2. The second group hears: “Doctors are fighting a disease that could kill 600,000 people. They can focus their attention on Medicine A, which will result 400,000 people dying; or Medicine B, with has a 33.3% chance of saving all 600,000 lives, and a 66.67% chance of saving no lives at all. Which would you get them to focus on?” And this will be the “Losses” option.
  2. The scenarios have identical outcomes. And actually, the choices within each option are the same (a 33.33% chance of saving 600,000 lives is “the same” as saying that only a third of the 600,000 [ie. 200,000] will live).
  3. However, scenario B phrases the outcome in terms of lives lost.
  4. If we weren’t loss averse, you would expect the results for both groups to be the same.
  5. In reality, people in the first group are more likely to choose Medicine A, and save a guaranteed 200,000 lives; where people in the second group are more likely to choose the all-or-nothing Medicine B.
  6. The framing of a scenario in terms of losses is seemingly emotive enough to change the way that we make decisions about risk.

So to see if foreign language had any impact on this bias, the experimenters gave the scenarios to a group of Americans (group a) that had learned Japanese as a second language (some were asked to think about the scenario in English, others in Japanese); as well as giving the scenarios to a group of Koreans (group b) that had learned English as a second language (again, some were asked to think about the scenarios in Korean, others in English).

Here are the results:

What you are looking at is the percentage of people that chose Medicine A (to save a safe 200,000 people) in each scenario (“framed as gains” and “framed as losses”) and in each language.

What is clear: in your home tongue, your choice will change.

What else is clear: in a foreign tongue, your choice will be consistent. Meaning that the act of translation removes the bias from your thought process.

Isn’t that amazing?

I was amazed.

A Caveat

This may not apply equally across foreign languages – as a native English speaker who has attempted to learn some of the alternatives, I would say that the transition from English to French comes far more naturally than, say, the transition from English to Arabic. Mainly because the French and English mindsets are very similar in terms of the way we understand time, action and purpose. Arabic, however, is far more relaxed about the concept of time and tense. Which makes it far more foreign. And therefore, possibly better?

That said, regardless of the language, you’ll have to go through the analytical translation process. So maybe that’s the important part.

But either way, take a leaf out of Eat Pray Love and learn to speak italian.

Because when you’re making a big decision that feels foreign to you, it’s (apparently) best to keep the whole saga as foreign as possible.