The economics behind a common language

In today’s episode on 21st Jan 2026, we look at the pros and cons of having one common language spoken across different regions in a country as diverse as India. ⁠Book a FREE call with Ditto for unbiased and honest advice⁠ https://ditto.sh/vx51ji

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  Hello folks, you are tuned in different shots daily. In today's episode, we look at the pros and cons of having one common language spoken across different regions in a country as diverse as India.

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  Before the eighteenth century, the region we now call France didn't speak modern French. It was a mosaic of languages and dialects that had evolved from Latin over centuries. There were French dialects like Picard, Norman and Ossetan. And then there were entirely different regional languages such as Breton, Basque and Alsate. Each came with its own sense of identity. France, linguistically speaking, was anything but unified. However, in fifteen thirty-nine, France saw one. The then-King of France signed the Ordinance of Villas-Quaterettes into law, mandating the use of French on all public documents. And in eighteen eighty-two, the Jules Ferry laws prohibited the use of regional languages

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  in schools while providing free secular education in France. This is widely considered to be the beginning of decline of French regional languages. Because you see, post the French Revolution, a standard French language was mandated not just to build political unity, but to remake the economy itself. The revolutionaries argued that the linguistic standardization could lower barriers, align markets and pull a fragmented country into a single unified nation. Language is usually discussed as culture, identity or emotion. But one can also look at it through an economic lens as languages behave more like infrastructure, much like roads, bar grids or payment systems even.

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  It determines who can interact with whom, how easily labour can move, how quickly skills transfer across regions and how firms scale. In that sense, language really shapes access to markets and opportunities long before politics or governments enter the conversation. A shared language reduces transaction costs across an economy and communication becomes easier. Workers will find it easier to move across regions. Firms spend less resources on training and translation and ideas will spread faster between markets. Over time, this improves productivity and allows capital to flow more freely. Because information asymmetries are lower and integration costs fall. This is why large economies and even corporations tend to converge on a common working language,

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  even when cultural diversity remains. While all this is true, linguistic fragmentation performs a different economic function. It preserves local identity, social trust and participation within communities. But it also raises coordination costs. Workers are more tightly bound to local labour markets and productivity gains diffuse unevenly across regions. Growth still happens, but it happens in pockets rather than at scale. Every large economy therefore faces an unavoidable trade-off between efficiency and inclusion. What makes language policy particularly sensitive is that this trade-off is rarely acknowledged in economic terms. Instead, debates are framed almost entirely around politics, while the underlying costs remain implicit.

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  Over time, those costs compound through wages, mobility and economics. Let's understand this with an example. India illustrates this tension with unusual clarity because of our diversity. In a multilingual setting, the concept of linguistic distance becomes economically important. Linguistic distance refers to how easily speakers of one language can learn or understand another. Languages such as Bojpuri or Haryanvi are structurally closer to Hindi, whereas languages like Kannada or Tamil are much farther away. This difference translates directly into learning costs. When the official language imposed by the state does not match the local language, learning outcomes suffer. In fact, a study tracking Indian districts formed during colonial reorganization

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  showed lower literacy and graduation rates in linguistically mismatched regions. The same pattern appears globally. Immigrants exposed early to the dominant language perform better than those who are not. A common language can improve coordination and efficiency, but when it is enforced rather than chosen, behavioral responses like resistance and disengagement often undo those gains. As a result, the economic burden of adopting a common language is not evenly distributed. Some groups face relatively low adjustment costs and gain access quicker to national labor markets and institutions. Others face higher costs in terms of time, effort, and forgotten opportunities. These asymmetries shape this behavior.

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  Groups that bear higher learning costs are understandably less willing to accept linguistic sanitization, not merely for cultural reasons, but because the economic burden falls disproportionately on them. In this context, what often appears as resistance to a language is more accurately a resistance to unequal cost sharing. The disagreement is not about communication itself, but about who pays for coordination and who benefits from it. In France, for instance, there was a minor backlash from priests for alienating Latin. This is because Latin was the official language of church and courts back then, and promoting French did not feel right to them. However, the masses did not mind because primary education in the standard French language was made free. In a country that was primarily engaged in farming back then,

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  this was a significant economic incentive to formally educate their children. In India though, there is no such incentive to promote a single language across the entire country. So, when such an incentive does not exist and the linguistic gap is greater in certain states, language debates become emotionally charged because they map directly onto economic outcomes such as mobility, earnings and access to capital. At the same time, preserving local languages has its own economic value. Trust, participation and social cohesion influence how local economies function. People are more willing to engage in economic systems they feel represented in and exclusion can generate long-term inefficiencies through disengagement and political friction. Ignoring these efforts can undermine growth even if short-term coordination improves.

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  The mistake lies in treating language as either a cultural issue or a growth issue. In reality, language choices involve a trade-off between near-term efficiency and long-term inclusion. Economies that prioritize coordination alone may unlock faster integration in the long term but they accumulate exclusion risks that surface later. Economies that prioritize identity without coordination protect participation but limit their ability to scale. While it worked for the French, the mistake is framing language as culture versus growth. Because in India, we’re too big and diverse to just have one language. Our tradition, culture and even food are linked to our mother tongue which may differ significantly from one region to another. However, in France, most languages came from just Latin.

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  Add to this that France is a physically smaller country than India. So, their culture is not entirely different from region to region, at least not as much as India. Language therefore does more than shape communication. It influences how opportunity is distributed across an economy, affecting wages, mobility, growth and access to markets. Treating language as purely cultural obscures these economic mechanisms and that itself carries a cost. But that cost is worth it when the latter choice is preserving local languages and sustaining identity. Thank you for listening to today’s episode and if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.