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April 11, 2004
David Warsh, Proprietor


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Open and Closed

LONDON — Stepping suddenly into London from Berlin, certain differences are striking.  In Berlin, every bus stop and underground station equipped with a map of the neighborhood, often of the city itself. There are few public maps in London.  You can always buy an overpriced one from the newsagent, however. 

Nor is it just knowledge about where you are that has been privatised in London. Local public transportation in Germany is structured in such a way as to make it seem a free good. Passengers simply walk into stations and onto trains or climb aboard buses. There are no turnstiles. The presumption is that you have paid your way, either by purchasing a monthly pass or a day ticket.

Monitoring is mostly done by audit. Conductors sweep through trains occasionally, asking passengers to display their tickets. Sometimes bus-drivers ask to see a pass.   

In London, in contrast, there are queues to get in to most buses and turnstyles for most trains. Where once flourished non-invasive statistical procedures like those in use in Germany, now everyone is examined.

If that were all, it would be easy to prefer Germany to England.  The message there is that citizenship confers certain rights and responsibilities. Every rider is expected to pay his share. The idea is to encourage use, to spread the fixed cost of the network over the widest possible number of users. Benefits thus flow with as little friction as possible — as if for free.

But that’s not all there is to it, naturally. There is another interesting dimension to the way these two communities are structured that is apparent as soon as you step off the train. It has to do with their relative degrees of openness. Both are vital and exciting places. Berlin is the more proud. But London is the more open city

Take immigration. London neighborhoods are a riot of nationalities and styles.  Berlin, in contrast, is much more careful about whom it lets in, and what is expected of them in return.

Even more important is the dimension of language. In Berlin, a conscious attempt is made to insure that most immigrants learn die Sprache.  Help is offered in many ways — carrots as well as the sticks, free instruction as well as patronizing sympathy and mild intolerance. In England, nobody in authority seems to care who speaks what. Yet everyone somehow learns English.

The annual conference of the Royal Economic Society last week in Swansea, Wales, is a case in point.  I had a certain expectation of it: stuffy Oxbridge dons in tweeds; London School of Economics and University College types in sweaters, fast-talking London Business School-ers in double-breasted suits.

I was surprised, therefore, to discover that the preponderance of those attending were young European economists. A few Americans were in attendance; there was a large contingent of Brits, of course, perhaps as many as a third. Yet all the rest were Europeans. And all of them presented their papers in English. 

It turns out that the Royal Economic Society was democratised twenty years ago. At that point, the meeting became the property of the users. It has since become a place for young professors from all over to show their wares in a relatively unstructured way.   No real news emerged, other than the increasing unity of European economics.

Yet it is all but impossible to imagine the same thing happening with the Verein für Socialpolitik, the association of German-speaking economists. So the meeting of the Royal Society illustrated an important point about the connection between language and economic activity.

In Germany, the big political storms today have to do with the reach of money into realms in which it had previously had relatively little power — health care, for example. The introduction of small co-payments for visits to the doctor in particular is causing considerable unease.

The bigger challenge to German values, however — and to the values of the French, the Italians, the Japanese, the Chinese and every other previously sovereign language community — has to do with boosting the attractiveness of the mother tongue to outsiders, while coping with the gradual adoption of the English language as a de facto standard for many purposes — including the teaching of economics. There surely are ways to do this, but they will require long-range strategies.

* * *

Reader Michael Price entered a telling objection to last week’s over-easy generalization about the prevalence of the one-scandal-per-industry model at the end of the ’90s boom.  What about the mutual funds industry, he wrote. Putnam, Janus, Alliance, Strong — don’t they qualify?

He is right, of course.  The mutual funds industry is the exception that underscores the rule.  Twenty years of more or less uninterrupted growth led to a remarkable diminution in the ethical standards of what was once a famously reputable business.

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