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

**Tyler Cowen** (0:04)
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Hello, everyone, and welcome back to Conversations with Tyler. Today I'm chatting with Joel Mokyr. Joel is a professor at Northwestern University.
He has a wonderful new book out called Two Paths to Prosperity, Culture and Institutions in Europe and China, 1000 to 2000 And he is one of the economics Nobel laureates from this past year. Joel, welcome.

**Joel Mokyr** (0:53)
Thank you, Tyler.

**Tyler Cowen** (0:54)
Start by telling us, in the book, your thesis is about European corporations vs. Chinese clans and the importance of that difference. How would you explain it?

**Joel Mokyr** (1:04)
Well, the difference is basically the kind of organizations that produce what we call local public goods. So things like poor relief and education, religious service and things like that. I would think that if you look at the world, say around 800 at the time of Charlemagne, the difference between Europe and China isn't very large. But at some point during the Middle Ages, you can see this divergence getting started. And what's happening is that in Europe, there is more and more of a decline in the extended family or the extended kinship group or we call it clan. And instead people get together and cooperate with other people to whom they are not related and with whom they do not share an ancestor. Whereas in China, it moves exactly in the other way, in the other direction. In China, you get more and more people getting organized by their extended family. The reasons for that are fairly complex. In Europe, it's particularly, I think, the Catholic Church that played a major role here. This was argued quite a while ago by a guy, an anthropologist called Jack Goody, but your own colleague, Jonathan Schultz, wrote what I think is one of the best papers on the subject, who pointed this out in great lengths and actually provided a fair amount of systematic evidence for this.
In China, there is no Catholic Church, and the imperial bureaucracy is more and more in cahoots with local clans to whom they actually outsource a fair amount of the things that they were supposed to do. And so as you move on out of this period of the Song Dynasty into later dynasties, you see this thing growing. The problem in Europe is that the nuclear family, which became the fundamental building block of society, is too small to provide local public goods. You need to cooperate with others. And so what emerges in Europe quite spontaneously is a bunch of things that provide these local public goods that you just don't see in China. So for instance, we have something called universities, we have monasteries, we have autonomous cities.
And so all of those things are what we call corporations. What it is, is people who are not related, but what they share is not an ancestor. You know, guilds have one kind of objective, universities have another one, and so on and so forth. And that divergence in social organization turns out to be, in our view, to be one of the key components of the divergence between Europe and China.

**Tyler Cowen** (3:54)
And do you take that change in policy from the Catholic Church as exogenous, or that is rooted in earlier features of Western society, such as the ideology of Christianity itself, or maybe earlier Roman times? What is causing what? What's the most fundamental driver here in the West?

**Joel Mokyr** (4:13)
Well, there's some debate about that. They don't, of course, tell you. There are, I think, two components about this, and I would not know how to weight them. But there's two sort of things happening here. The first is that the Catholic Church really becomes quite obsessive about certain sins that they consider to be particularly egregious, and one of those sins is incest. And so, you know, every society in the world prohibits marriage between siblings.
But other, you know, more remote relatives is more ambiguous, and the Church becomes quite obsessive about this. And at the end, you know, there are places where they actually prohibit the marriage of fifth-degree cousins. So how anybody in the Middle Ages would know who is fifth-degree cousins is unclear. I don't know who my fifth-degree cousins are. Maybe you do. The other thing, which is also a sort of goodies argument, and I think there's a great deal of truth to that, is that the Church wants to weaken any kind of organizations that compete with it for power and control, you know, in the local communities. But they also have figured out that if you organize society by nuclear families, then a certain proportion of people die without heirs.