Recently (ahem, some months ago) I went to a cafeteria in Philadelphia. It was funny to see a table with a sign that read: don’t use this table. The irony lied in the fact that you could basically read the sign only after you had used it.

I recently read a little bit about Narrative Economics. There is a relatively famous paper by Shiller (Narrative Economics: How Stories Go Viral and Drive Major Economic Events, 2019) that introduces the idea that the series of stories contained in literature, the symbols used in the culture, and the institutional memories constitute a framework of coordinated action for the agents. It basically means that the institutions create the rules of the game, and that those rules have some value in themselves. It is, naturally, not opposed to Acemoglu’s idea of growth dependent on institutions.

An interesting unintended consequence of such relatively arbitrary systems is their logical impediments. For example, one could imagine a world or environment in which signs are upside down, and then that would require a sign that explains how signs are upside down, which in itself would have to be upside down (with respect to the others). And if you are tempted to think that this is only food for thought, think again! We have all been to an airport. What’s the proportion of tourists from a given area that are necessary for it to be profitable to have a sign in a given language? I imagine once a city becomes visited enough by a given country, it simply makes more sense to start using the sign in that language.

For example, Mexico City did not use to have signs in English. Since Covid, however, that changed. Now, most places around Polanco, la Roma and other major areas frequently visited and even inhabited by americans have signs in English, beyond the typical tourist restaurant. This matters not only because of the cost that having such signs represent (one is led into thinking of Rotemberg menu costs). This matters because the interactions between the agents is shaped by the culture that one carries with oneself. While globalisation tends to standardise certain skeleton of businesses, aspects of life, trade, language, etc., it does not change the deep cultural interactions and social norms, and it certainly does not change the narrative capital of a country. This could be the reason why certain economic policies suggested by the IMF have not led to the expected growth rates for some Latin American countries.

While we figure that out, let’s keep hiking!