Joel Mokyr on Clans, Corporations, and a Culture of Growth

Joel Mokyr — Northwestern economic historian and freshly minted Nobel laureate — joins Tyler Cowen to lay out the argument of his new book, Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000–2000. The conversation traces how Europe and China organised the production of local public goods so differently — corporations bound by a shared objective versus clans bound by shared ancestry — and follows that divergence through the Industrial Revolution, the fall of Song China, and 19th-century German science.

Key ideas

1. European corporations and Chinese clans solved the same problem in opposite ways. Around 800 AD, Europe and China looked similar. Over the Middle Ages they diverged: Europe’s nuclear family proved too small to supply local public goods — food relief, education, religious services — so unrelated people cooperated instead, forming universities, monasteries, guilds, and autonomous cities. Mokyr calls these ‘corporations’: people who share not an ancestor but an objective. China moved the opposite way, organising more tightly around the extended kin group, the clan, with the imperial bureaucracy outsourcing local governance to clans rather than to guilds or cities.
2. The Catholic Church gets credit — or blame — for dissolving European kinship. Mokyr attributes the decline of the European clan chiefly to the Church’s campaign against cousin marriage (citing anthropologist Jack Goody, and Tyler Cowen’s colleague Jonathan Schulz for the systematic evidence). Two motives combine: an obsessive doctrinal stance against incest, extended even to fifth-degree cousins, and a more self-interested one — nuclear families produce more heirless deaths, and property without an heir reverted to the Church. Mokyr treats both as unintended-consequence history: the Church never foresaw that it was seeding the corporation.
3. China was not economically inferior — it was pursuing a different objective. Mokyr rejects the framing that China ‘failed’ to industrialise. Under the empire, China got what it wanted: stability and internal peace, rather than the progress and growth Europeans prized. China’s high urbanisation is largely a post-imperial and post-Mao phenomenon; 19th-century treaty ports like Hong Kong and Shanghai grew because Westerners settled and ran them, not because the Chinese system was chasing European-style growth.
4. A concept of progress was the missing ingredient — in Rome as much as in China. Neither Roman nor Chinese civilisation held that accumulated knowledge should be applied to make material life steadily better. Mokyr’s test case: Romans had glass and literate elites but never invented spectacles, because artisans and scholars never spoke to one another and manual work carried the contempt of a slave society. The idea that ‘whatever we have today, we can make it better’ emerges in Europe only from the late 15th century, in what Mokyr calls the industrial enlightenment.
5. Useful knowledge fed the culture of growth that produced the Industrial Revolution. Once Europeans convinced themselves they could surpass the ancients — a shift he dates to around 1450–1500 — ‘useful knowledge’ (science oriented towards material improvement, not merely curiosity) became a live project. Mokyr’s own current research reframes Britain’s Industrial Revolution advantage away from wages and towards human capital: a market-based apprenticeship system produced better-trained artisans and engineers than the guild-regulated Continent.
6. Cultural persistence outlives the institutions that produced it. Guilds were abolished after the French Revolution; English monasteries vanished entirely; yet the underlying cultural values tied to nuclear-family versus clan organisation persist far longer than the organisations themselves. Mokyr credits this to institutions and culture co-evolving — universities, the most durable European corporation of all, still largely self-govern today, in China as much as autonomous entities remain the exception.

Content

Corporations versus clans

Cowen opens on the book’s central thesis. Mokyr dates the divergence to the Middle Ages: Europe’s nuclear family, too small to supply local public goods on its own, drove strangers to cooperate around a shared objective — universities, monasteries, guilds, autonomous cities. China moved the other way, with the imperial bureaucracy increasingly outsourcing local functions to extended-family clans. Pressed on causation, Mokyr identifies two Church motives — doctrinal obsession with incest (extended to fifth-degree cousins) and a material interest in inheriting the property of heirless nuclear families — while stressing that neither the Church nor the Chinese imperial service intended the long-run institutional consequences that followed.

Why the divergence persists

Cowen tests persistence against Francis Fukuyama’s 1990s claim, in Trust, that Chinese corporations would struggle for want of trust — a claim recent decades have overturned. Mokyr argues that organisations can change (Mao’s regime tried hard to erase clan influence, incompletely) but the underlying cultural values, tied to kinship structure, are much stickier, citing the correlation economists and anthropologists such as Joseph Henrich have found between kinship system and cultural values. Many original European corporations (guilds, most monasteries) have themselves disappeared, yet the cooperative disposition they instilled remains — institutions and culture co-evolve, which is what makes the pattern durable. Universities are the most persistent corporation of all, still self-governing centuries on.

China’s growth, on its own terms

Asked why Chinese cities long outsized London or Paris despite the supposedly inferior clan model, Mokyr rejects the premise: the book never argues China was economically inferior, only different. China got what it wanted — stability and internal peace — where Europe wanted progress and growth. High Chinese urbanisation is mostly a post-imperial and post-1976 phenomenon, and 19th-century treaty-port growth (Hong Kong, Shanghai) reflects Western settlers running their own affairs. Mokyr’s illustration of a concept still not fully absorbed: intellectual property was alien to Chinese thinking until three or four decades ago; Chinese patents have since ‘skyrocketed’, but self-governing universities on the European model have not taken hold, since Chinese universities remain run by politicians.

The slow surpassing of Chinese living standards

Cowen presses on timing: if the medieval divergence is the cause, why did it take until roughly 1700–1720 for Western Europe to overtake Chinese living standards? Mokyr is sceptical of living-standard measurement itself — he doubts claims (from Pomeranz and Jack Goldstone) that China matched the West as late as 1750. He locates the real, earlier divergence in technology, visible from the Renaissance on: Europe borrowed heavily from Chinese and Indian goods (Chinaware, cotton) before matching and then overtaking them, and became the active agent of global exchange, redistributing New World crops in both directions. Citing an analysis of Joseph Needham’s Science and Civilisation in China, Mokyr notes that almost no innovation Needham records postdates 1400 — sophisticated 11th-century Chinese clocks simply disappear. By the First Opium War, one English ship humiliating the Qing empire lays the technological gap bare.

Why no Industrial Revolution in Rome

Cowen asks directly why Rome, despite its infrastructure, never industrialised. Mokyr’s answer turns on the absent concept of progress: Roman and Greek elites were creative but did not connect natural knowledge to material improvement, and manual labour carried the contempt of a slave society — artisans and scholars simply did not talk to each other. His set-piece example is spectacles: Romans had glass, literate elites, and even Seneca’s observation that a water-filled glass magnifies objects, yet never took the step to eyeglasses. Roman aqueducts and roads, Mokyr insists, reflect practical problem-solving, not a belief that things could keep getting better — once a problem was solved, Romans stopped. Europe’s ‘never good enough’ disposition toward incremental improvement — refining the water mill again and again — is, for Mokyr, the actual engine of sustained growth, and the Chinese lacked the same concept of progress.

British human capital and the Industrial Revolution’s living standards

Mokyr locates Britain’s edge over France not in Protestantism but in a market-based apprenticeship system: unlike the Continent’s guild-regulated training, English apprentices chose their own masters, producing more competitive, better-trained artisans and engineers — so sought-after that Continental states tried and failed to prevent English engineers emigrating. On living standards during the Industrial Revolution itself, Mokyr is a self-described moderate: British workers were taller and better-fed than the French by 1700, but rapid population growth (driven by higher birth rates, raising the dependency ratio) held down measured living-standard gains until roughly the mid-19th century. Industrial cities, described in Engels’s Condition of the Working-Class in England, were often dreadful places to live — the revolution was, in Mokyr’s phrase, ‘very good for their grandchildren’.

German science and the fall of Song China

Two further threads round out the conversation. Germany’s rapid rise in 19th-century science, Mokyr argues, reflects the Stein-Hardenberg civil-service reforms after Napoleon and Wilhelm von Humboldt’s research-university model, which linked universities directly to manufacturing (citing a paper by his former student Ralf Meisenzahl showing proximity to a university predicted advanced-manufacturing activity). On why Song China fell to the Mongols despite its wealth, Mokyr attributes this to geography and demography, not the clan system: China’s unified, steppe-bordered position exposed it to periodic conquest by outsiders who typically became sinified and absorbed into existing institutions, whereas Europe’s fragmentation (a story he credits to George Mason’s Mark Koyama) meant Europeans mostly fought each other rather than outside powers.

See also

• Joel Mokyr — speaker; Northwestern economic historian and 2025 Nobel laureate
• Tyler Cowen — host
• Joseph Henrich — his account of the Catholic Church weakening European kinship, and of WEIRD psychology, is the closest wiki neighbour to Mokyr’s corporations-versus-clans argument
• Brad DeLong — fellow economic historian of long-run growth
• Brad DeLong on Intellectual and Technical Progress — companion episode on the roots of sustained economic growth
• Adam Tooze — economic historian working the same terrain of institutions and long-run divergence
• Claudia Goldin — fellow Nobel laureate economist
• Claudia Goldin on the Economics of Inequality — companion episode from a Nobel-laureate economic historian