The Tezos protocol is written in OCaml, a general purpose industrial-strength programming language with an emphasis on expressiveness and safety. It is the technology of choice in companies where speed is crucial and a single mistake can cost millions. It has a large standard library, which makes it useful for many of the same applications as Python or Perl, and it has robust modular and object-oriented programming constructs that make it applicable for large-scale software engineering. Many top companies use OCaml, including Facebook, Bloomberg, Docker, and Jane Street.
Functional programming is a programming paradigm — a style of building the structure and elements of computer programs — that treats computation as the evaluation of mathematical functions and avoids changing-state and mutable data.
It is a declarative programming paradigm, which means programming is done with expressions or declarations instead of statements. In functional code, the output value of a function depends only on the arguments that are passed to the function, so that calling a function f twice with the same value for an argument x produces the same result f(x) each time. This is in contrast to procedures that depend on a local or global state, which may produce different results at different times when called with the same arguments but a different program state. Eliminating side effects, i.e. changes in state that do not depend on the function inputs, can make it much easier to understand and predict the behavior of a program, which is one of the key motivations for the development of functional programming.
Here is a diagram that shows the high-level differences between the EVM (Ethereum Virtual Machine), WASM (Web Assembly) and Michelson: