Nobel Economist: Will China Eventually Overtake America? | Joel Mokyr

David Lin (0:00)

Why do some nations stay on top of the technological innovation front while others fall behind? Can the United States maintain its lead in terms of innovation, even while tariffs rise, immigration tightens, and China pushes into advanced technologies? And will AI, artificial intelligence, deliver the growth that its backers promise? Will AI kill us all by 2030, as one particular exanthropic researcher has warned could happen?

Our next guest is Joel Mokyr. He is a professor of economics and history at Northwestern University, and he is the co-winner of the 2025 Nobel Prize in Economics alongside Philippe Anguillon and Peter Howitt. They were awarded for explaining how innovation drives growth, and he is best known for studying one of the biggest questions in economics, which is why did humanity suddenly begin experiencing sustained economic growth after thousands of years in which living standards improved only very slowly?

We are going to answer that question and extrapolate into the future and see how economic growth will transpire over the next decade and beyond. Joel's books include The Lever of Riches on why technological creativity is rare and fragile, A Culture of Growth, which examines the beliefs that make modern growth possible, and his book Two Paths to Prosperity on Why Europe Overtook China. He joins us now to discuss innovation, China's growth, AI, and much more. Joel, welcome to the show. An honor to host you today.

Joel Mokyr (1:33)

Thank you, David. Pleasure to be here.

David Lin (1:36)

I like to talk about your work and understand the theories behind why innovation drives living standards, and your work explores this theme in detail, and you've determined and proved that it's not just technological innovation that matters, it's a lot more. Let's start by talking about the current situation. You've written about Cardwell's Law, the law that no society stays technologically creative for very long. Britain is one example. It's lost its global lead when the winners of one era organize to block the next.

How do technological innovations lead to economic growth broadly? And let's use the United States as an example today. Where does the United States sit on the curve, according to Cardwell's Law today?

Joel Mokyr (2:23)

Well, the United States has been the world's technological leader, basically for most of the 20th century.

It essentially de-strung Europe for a variety of reasons. One of them, of course, was two world wars that tore Europe apart. And the other is, and not unrelated, a very large number of major scientists and inventors and engineers pick up their suitcases and left Europe to go to America, you know, because of what was happening in Europe. And so the United States has been a world leader for most of the 20th century. And in some ways, you know, there are still areas in which they are leading. Everybody is talking about AI, everybody talk about computers, and what digital and so on and so forth. And it is all still made largely in America. But there are clouds on the horizon and everybody's talking about those clouds. And of course, there is a considerable number of people who think that there is a good chance that at some point, the United States will replace, well, China will replace the United States, just as the United States replaced Europe, and much as the European continent replaced Britain in the late 19th century, and how Britain replaced the Netherlands in the 17th and 18th century, and so on and on and on. So the United States is still a very technologically creative nation, and I don't think anybody's right mind would deny that.

But there is competition. And one way of thinking about this is that competition is actually healthy, that it makes you work harder, you know, to stay ahead of the competition. And whoever wins in AI wins, said our learned and wise president a couple of days ago, and there you have it. I don't know if it's about winning at all. I mean, the notion that somehow technology is a bit like a horse race in which the first to cut the finish line, I mean, that is sort of a simplified idea, you know, propelled by somebody who hasn't a clue about economics. But there, you know, leadership can be distinguished, although it's typically easier to distinguish it after the fact during during the fact. But I think there is a good chance that at some point the United States will at least have to share leadership with China and possibly cede it to China, depending a bit on what happens here and to some extent, of course, what happens in China.

And so, by and large, the quote that I like to make is that, you know, Cardwell's Law suggests that no country remains technologically creative for very long. Now, very long might mean a century. But that is, in fact, a sort of an empirical regularity that Donald Cardwell, who was a very eminent historian of technology, first observed. And I wrote about it because I thought it was fascinating and tried to tell a story of why that might be so.