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

Joel Mokyr co-won the 2025 economics Nobel for exploring the question that traces back to the beginning of economics: how did sustained economic growth suddenly become normal? For nearly all of human history, cleverness didn't compound. What changed, according to Mokyr, was twofold: first, you need to know why something works, so that one advance can seed the next; second, you need a culture willing to tolerate the disruption. His new book contrasts Europe with China, showing how Europeans learned to cooperate with people they weren't related to, in guilds, monasteries, cities, and universities, while China organized itself around the extended clan. One path led to internal stability and peace; the other, more restless and outward-looking, was the one that decided the world could always be made better. Tyler and Joel discuss European corporations vs. Chinese clans, why the Catholic Church became obsessed with cousin-marriage, how persistent cultural trends really are, why Chinese cities became so populous relative to Europe, why it took so long for European living standards to surpass China's, why sinified invaders kept getting swallowed by the dynasties they conquered, how geography kept Europe fragmented and China unified, where India fits into the story, why the Romans never made spectacles, why British soldiers stood two inches taller than the French, what powered the sudden rise of 19th-century German science, how disruptive winning a Nobel is, and much more. Read a full transcript https://conversationswithtyler.com/episodes/joel-mokyr/ enhanced with helpful links, or watch the full video https://youtu.be/y4Orjmn21VI on the new dedicated Conversations with Tyler channel. Recorded February 20th, 2026. This episode was made possible through the support of the John Templeton Foundation. Other ways to connect Follow us on X https://twitter.com/cowenconvos and Instagram https://www.instagram.com/cowenconvos/?hl=en Follow Tyler https://twitter.com/tylercowen on X Sign up for our newsletter https://mercatus.tfaforms.net/5060931 Join our Discord https://discord.gg/JAVWP7vTxt Email us: [email protected] mailto:[email protected] Learn more about Conversations with Tyler and other Mercatus Center podcasts here https://www.mercatus.org/podcasts. Timestamps: 00:00:00 - Intro 00:00:54 - Europe vs. China's Paths to Prosperity 00:10:22 - China's Growth 00:13:24 - Europe's Growth 00:18:56 - The Fall of Song China 00:21:56 - India 00:25:08 - Industrial Revolution 00:39:52 - 19th-Century German Science 00:43:37 - Being a Nobel Laureate 00:45:29 - Outro Photo Credit: Shane Collins

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Tyler Cowen?

  Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at mercatus.org. For a full transcript of every conversation, enhanced with helpful links, visit conversationswithtyler.com.

• 0:26Tyler Cowen?

  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.

• 0:52Speaker 01

  Thank you, Tyler.

• 0:54Tyler Cowen?

  Start by telling us, in the book, your thesis is about European corporations versus Chinese clans, and the importance of that difference. How would you explain it?

• 1:04Speaker 01

  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.

• 1:49Speaker 01

  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 length and actually provided a fair

• 2:34Speaker 01

  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

• 3:19Speaker 01

  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.

• 3:54Tyler Cowen?

  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?

• 4:13Speaker 01

  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

• 4:56Speaker 01

  where they actually prohibit the marriage of fifth degree cousins. Now, 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 sort of Goody's 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 a society by nuclear families, then a certain proportion of people died without heirs. And if they die, you know, interstate without heirs,

• 5:38Speaker 01

  then in many cases, the property that these people owned reverted to the church. And so, pure naked greed by the church, which was not unknown in the Middle Ages, I think was a driver here. And so Goody sort of convinced me that that actually is a substantial factor. There are other arguments that have been made in this context, but I think these are the two that are most striking. And the other question is, you know, why is it that the clan in China is so convenient for the imperial bureaucracy to rely on? So both of those things happened in parallel. And I would think, maybe if I made one observation,

• 6:21Speaker 01

  in both cases, this is historical outcomes as the unintended and unanticipated consequence of very different actions. So there's no question that the church never I think foresaw the emergence of corporations in Europe, nor do I think that the Chinese imperial service ever seriously considered the possibility how this would change life in China. But that's what happens. You know, you try to follow one objective and then something very different emerges over time. That's what history is all about.

• 6:58Tyler Cowen?

  Now, why are these cultural trends so persistent? So I recall in the 1990s reading Frank Fukuyama's book, Trust, and he argued that large Chinese corporations were going to be very difficult to establish because China did not have enough trust, unlike Japan. Now, a few decades later, that seems obviously wrong. There are many quite large Chinese corporations, and the large Japanese corporations, they've maintained a foothold, but they actually haven't done that well. Things changed quickly. So why so much persistence here?

• 7:29Speaker 01

  Well, that's a very good question. There's some debate about how much persistence there really is. Particularly, the communist regime under Mao did all they could to erase the influence of clans and replace it, of course, with communist functionaries. There's some evidence and some research recently shown that that wasn't 100% successful. And so I think what you get, particularly in societies such as China, but in other places as well, where corporations were largely absent and where your society was organized by family, is that it actually changes people's culture and people's values.

• 8:11Speaker 01

  And so if you look at all the work that's been done by economists like Stephen Anki and anthropologists like Joe Hendrick, they all show a very tight correlation between attitudes and cultural values and, you know, kinship, whether that's extended kinship or nuclear family. So I think what you could do in China and in Europe is you could maybe change your organizations, but you cannot change The state of mind. And an interesting fact is that many of the corporations with us that we talk about during the that were established during the Middle Ages eventually disappeared or became very unimportant.

• 8:56Speaker 01

  So for instance, guilds became, you know, eventually got abolished after the French Revolution on the continent and they were weakened in England much, much earlier. Monasteries still exist in Catholic countries, in Protestant countries and in England, they were completely abolished. But the frame of mind and the, and the cultural values that growing up in a nuclear family imbues, that kind of thing sticks around. Corporations, of course, remain, but they changed their form very much. The one most persistent of all those corporations, interestingly enough, were universities. And effectively, the form of universities with the fact that they are self-governing and they're sort of self-contained organizational units that write their own rules and their

• 9:41Speaker 01

  own bylaws, that thing, despite a lot of pressure on them, is still surviving, which I find very striking. But we should think about a world that consists of lots and lots of, of different organizations like that, in which cities, for instance, were self-governing and made their own rules. And again, you see cooperation between people who share a location, but not necessarily an ancestor. So these things tend to be very persistent precisely because of institutions interacting with culture and culture feeding back into institutions. So they evolve or co-evolve, I should say, together. And that makes them, I think, much more persistent, Tyler.

• 10:22Tyler Cowen?

  Why is it so late in history that Chinese cities still have more people than, say, London or Paris? If the Chinese model is economically inferior?

• 10:33Speaker 01

  No, I didn't. I mean, it isn't economic. We never say in the book, anyway, you will not find this, that it was economically inferior. That's a, that's, that's a way of thinking that we have long abandoned. It's different. And in many ways, under the empire, the Chinese got what they wanted. And what we think, what Europeans think of being inferior, the Chinese actually, I think, that was their objective. What they wanted above all was stability and internal peace, rather than what Europeans wanted, which was progress and growth. And so these huge cities in China, well, remember, it's a, you know, incredibly populated place.

• 11:15Speaker 01

  But in fact, urbanization in China, by saying, if you look at, at eighteen fifty or nineteen hundred, is much lower than is Europe. The urbanization that you see now is really all post-imperial. And in fact, it's, a lot of it is, is the consequence of the last twenty and thirty years. But although you should keep in mind that since the First Opium War, Europeans have been penetrating China and, you know, and many of the European values and ideas were being mixed in with the Chinese culture. And what you get is some kind of mixed product, which produced many of these cities. Many of these cities were what's known as treaty ports, you know, Hong Kong and Shanghai and so on.

• 11:56Speaker 01

  And so they grew in large part because of the Westerners that came there and settled there and actually ran their own show. But I think China in the last, certainly, you know, since the death of Mao in nineteen seventy six, it's, you know, it's adopted many of the European ideas and many of the European cultural values. And as a result, what you get today in China, sort of weird mixture of a persistence of things that were around during the empire and two thousands of years, Confucian beliefs and so on, with Western values. And so I'll give you one example, which I find particularly striking. One of the great insights of Western society over the years has been the idea of intellectual property rights.

• 12:39Speaker 01

  You don't really actually see anything like that anywhere in the world. You know, the, the combination of a patent system and copyright and all these things, that's a very Western European thing. The Chinese never had anything like that. And their whole concept of intellectual property right was alien to Chinese thinking until...

• 12:57Speaker 01

  About thirty or forty years ago. And now, if you look at the data, Chinese patents have just, you know, skyrocketed. And clearly, that idea has now penetrated Chinese society. But the idea, for instance, of having self-governing autonomous universities still hasn't quite gotten there because Chinese universities are very much run and managed by politicians, unlike, I hope, most American universities.

• 13:24Tyler Cowen?

  Why does it take so long for the wealthiest parts of Western Europe to surpass Chinese living standards? Say that's happened by seventeen hundred or seventeen twenty. That's many centuries after this medieval divergence. If it takes so many centuries, is the medieval divergence really the relevant factor? Why is it such a slow process?

• 13:47Speaker 01

  Yeah, I think it is. I think it's a main factor. And, you know, I think the idea of looking at standard of living. First thing, I'm very skeptical about how standard of living are actually measured. I know that this is what Pomerant and other people have, and Jack Goldstone and other people have argued, that the living standards in China were comparable to the West as late as seventeen fifty. I'm not a hundred percent sure that that is true. But certainly, for my money, what really defines the divergence is that technologically, the gap between the two countries starts to become visible at the time of the Renaissance, you know, in terms of a whole bunch of things that you see growing in Europe, you know, and stagnant in China.

• 14:32Speaker 01

  Now, keep in mind, of course, that part of the European growth is due to the fact that they borrowed ideas from China. And then the Industrial Revolution consists to some extent of imports in situational by Europeans trying to mimic the goods that they were importing from China. So, or not just from China, from India as well. But, you know, pottery is a good example. So one of the things they really wanted from China was China ware. That's why it's called China ware. And it took them a while to be able to match the Chinese capability in the ceramic industry, but they do so. Eventually, and then they stop importing this stuff from China. The same is true, you know, for say cotton and other products that we're getting from the east.

• 15:14Speaker 01

  And so European living standards, I think, should be measured in part by the fact that when the Europeans start their voyages across the, across the globe in the late fifteenth and early sixteenth century, they are able to bring in a whole bunch of new crops and new techniques from, from other areas, which they merely adopt. You see Europeans here very soon growing tobacco and potatoes and, you know, corn and other things like that. They are the agents of global change. And not only that, they changed their own diets, they changed the Chinese diets because they, the Europeans bring from the new world, things like peanuts and sweet potatoes and things like that.

• 15:57Speaker 01

  And they changed the Chinese diets, but the Chinese themselves are not agents here. They are accepting the stuff that the Europeans did to some extent, and they're rejecting others. But it's the Europeans who are the agents of change here. They are the entrepreneurs, they are the people who bring about the changes, Tyler. And so my sense is that this is going to typifies the difference between Europeans and, and the Chinese. Europeans are more aggressive, they are more outward looking. In the end, what you see by the eighteen thirties and eighteen forties, you see that the gap, the technological gap is huge. In some ways, much larger than the living standards gap, even in the nineteenth century, you know, in terms of food.

• 16:42Speaker 01

  The Chinese were capable of producing enough food, you know, but their number of famines in China is probably not a lot worse than in Europe, okay? But when you see what happens during the first Opium War, how the, one English ship is blowing all of this mighty empire to pieces and the Chinese have to accept this terribly humiliating peace, you can sort of see how the technological gap has grown between the two. For me, that is much more telling than the living standards. The other thing that I should like to point out is that when you look at Europe at, in the Sixteenth and seventeenth century, you can see that the capability of expanding the set of useful knowledge, including science, is just growing very rapidly.

• 17:27Speaker 01

  You know, whether there is a scientific revolution or not is a debate that I want to get into. But certainly by 1700, Europe is on the verge of really changing our understanding of how creation works. And that's not just Newton and Galileo. You know, there's a whole body of work that is emerging. And there's really nothing like, nothing parallel like that in China. China is a very sophisticated society in many ways. The literacy rates are high. They have a, you know, a well-funded and well-organized system of education. But they don't really continue their earlier forays into science and into a new technology.

• 18:10Speaker 01

  Somebody actually went out and looked at Joseph Needham's, you know, many volumes on Chinese technology and science, or science and civilization, as he called it. And he discovered something which I guess we all knew, but they put numbers on it. Almost nothing that Needham pointed out as an innovation happens after 1400. I mean, there's complete stagnation setting in. And some of the things that they knew how to make in earlier times, like the sophisticated clocks that they built in the 11th century, they disappear. And so for me, that's worth telling than, you know, how many calories of carbohydrates were consumed on average,

• 18:53Speaker 01

  if we could ever calculate that correctly.

• 18:56Tyler Cowen?

  Now, there's another problem in Chinese history, as you well know. So for instance, Song China falls to Kublai Khan, even though Song China is relatively wealthy for its time. And there were other cases of so-called barbarians coming down from the north, taking over parts of what we now call China. Why is that happening? Is that also because of the clan system?

• 19:17Speaker 01

  No, no, no, no, no. I think China is simply located in a very different kind of geographical and demographic neighborhood. It is essentially, it remains for all practical purposes, unified since the rise of the Song in 960. I mean, there's a splitting of this southern and northern Song for a little while, but it's basically a unified society which shares a language, particularly a written language, which is very important. But what happens is there's these wild people on their border that every once in a while they invade China. And that happened more than once. I mean, it happens during the Mongols, of course, in 1279, and the Mongols actually establish a dynasty, the Yuan Dynasty,

• 20:02Speaker 01

  that lasts about 80 years, if I recall correctly. But what is interesting, Tyler, is that when these, you know, these people from the steppe, and some of them were Mongols, some of them were Turkmen, some of them were actually partially Chinese. But if they are not full-blooded hand Chinese and they come in and invade, very often they become signified. They start speaking Chinese, they start dressing like Chinese, they behave like Chinese, they adopt Confucianism, and they accept most of the Chinese institutions, such as the imperial examination, and they get absorbed into the clan system. And so there's nothing like that in Europe. Europe really, since the early Middle Ages,

• 20:45Speaker 01

  is not invaded effectively by any other non-European power. I mean, the Ottomans try a couple of times and they get defeated. The Mongols try once in 1240, and then if they had taken over Europe, history would have been very different. But they turned around and go back for internal reasons. And so what that really means is that the Europeans are mostly confronting one another. Whereas the Chinese, in most cases, are worried about people from the outside, which is that they have this wall and they have this military that's posted on the outer boundaries of China to keep the savages out. In that case, a very different kind of world.

• 21:30Speaker 01

  And interestingly enough, again, one of your colleagues at George Mason, Mark Koyama, has a bunch of papers that describe this in great detail and quite, I think, elegantly and ingeniously, how that geographical differences created the difference between the Chinese government, which remained a unified state, and Europe, which remains fragmented, basically, until the present day.

• 21:56Tyler Cowen?

  How does historic India fit into your schema?

• 21:59Speaker 01

  If I may admit it, my knowledge of India and Indian history is probably not up to par, certainly not. I'm a Europeanist who spent the last five or six years familiarizing myself with Chinese history. In our last chapter, there is a discussion of India. My sense is that India is a different version of the Chinese clan system. It's organized differently because you have this combination of clans and caste in India. But basically, they too are unable to create the kind of unique system that you see in Europe, in which you see these nuclear families living in a society which is organized mostly by corporations.

• 22:43Speaker 01

  In that sense, I would say, all, if I may add to that, all the three great Asian civilizations, Middle Eastern Muslim civilization, Indian Hindu and Muslim civilizations, and China, share something, and it's Europe that is the weirdos. It's Europe that are the exceptions. And that's essentially the tenor of Joe Hendricks' book, called The Weirdest People, in which he points this out. That book has, I think, had a big influence on us because it really shows in great detail how organizing people by nuclear family creates not only a different set of social organization, but the culture that goes with it.

• 23:27Speaker 01

  Now, I don't want to draw the analogy between India and China too far, but it's kind of striking that many of those European corporations are woefully missing

• 23:39Speaker 01

  In India as well, until the Brits show up and in a way show them how to do it. But even there, I think it is fairly rare until certainly until nineteen forty eight and India becomes independent. But the truth is, I did not really want to get too deeply into India because, you know, it's it's, you know, pretentious enough for me to sort of spend a couple of years reading Chinese history, but other people spend their entire lives, you know, on on one village or one county. I mean, it's it's just a huge ocean and I can't really say that I did more than sort of dipping my toes in it. But we wanted to so take a step back and look at these two great big civilizations

• 24:24Speaker 01

  and try to see why they differed. And I want to stress again, we don't make the argument that India or China failed or what they did was, you know, they were doing what their their preferences and their institutions in some sense dictated. But, you know, I find it always telling that the British established an East India Company that trades with India in London, but that in Delhi you don't see, you know, a Western European company or an England company that does to the Europeans what the Europeans did to them. So that asymmetry is already there in sixteen hundred.

• 25:08Tyler Cowen?

  Why was there no industrial revolution in the Roman Empire?

• 25:12Speaker 01

  Oh, God, that's a huge question.

• 25:15Tyler Cowen?

  Is it coal? Is it human capital? Is it something else?

• 25:18Speaker 01

  Well, I think my sense would be that both Roman and Greek civilizations were in many ways creative, but the creativity did never really extend very much into the technological realm. And insofar that they did science, they were mostly uninterested in applying that science to day to day problems. And that insight.

• 25:52Speaker 01

  That the kind of knowledge that we have about nature, you know, physics, chemistry, biology, astronomy, and so on and so forth, that that should be applied toward material improvement, that's not an immediate and obvious insight, nor is it an immediate and obvious insight that progress, as we understand it today, is feasible and/or desirable. These are all insights that arose in Europe in the 16th and 17th century. I have referred to these things, as you surely know, as in what I call the industrial enlightenment. Okay, so there is this change of mind in European thinking after maybe 1450 or 1500, maybe because of the printing press, maybe because of other reasons,

• 26:37Speaker 01

  but in which Europeans essentially start to convince themselves that they are smarter, that anybody that came before them, that, you know, a lot of these great Hellenistic and Greek scientists were wrong about many things and that they could do better. And once you have that belief, and Francis Bacon and a whole bunch of other people sort of were all in that tradition. In Rome, what you see is a whole bunch of clever people, but they're not that interested in technology. Let me give you one specific example, Tyler, that I have always found particularly intriguing, although I don't have a good answer why it happened, okay? But, you know, if you think about human needs, okay,

• 27:22Speaker 01

  one of the constants of human needs, above all, is that at some age, we need glasses, right? We start, you know, at age, I don't know, when you start wearing glasses, but I started wearing glasses when I was in my early 40s in order to read and things like that. That's not, you know, a cultural feature. That's something that's hardwired in us, okay? The Romans were, certainly the upper class, were literate people, and they had glass. But they never invent spectacles. And there is, you know, and, and, you know, they don't have optics and they're not interested in optics. There's this passage in Seneca in which he sort of thinks, you know, that he, he looks at a glass that has water in it.

• 28:03Speaker 01

  It says, hey, it's interesting, the stuff that's after, behind the glass actually is magnified. But they never take the step of coming up with eyeglasses. And you wonder why, because clearly, if, you know, if necessity is the mother of invention, this was a necessity. They never do it. The sort of only thing that you see happening in Rome, and even that was very constrained, is they do come up with watermills. But the watermills remain by and large, uh, uh, tools for grinding wheat, wine and corn. They don't actually take it to the kind of extremes that Europeans did in, in, in the Middle Age. Turn into sawmill and fooling mills and, you know, kind of an industrial, and sort of a little factory, which is why factories were known as mills.

• 28:48Speaker 01

  They never do that. And I think the reason is because the people who made things, okay, the artisans, the workmen, and the people who knew things and studied things, which is the scientists and the mathematicians and the teachers, never talked to each other. And, and what's more, the scientists essentially, uh, looked upon hard work and, and, and manual labor with a great deal of contempt. Both Plato and Aristotle make these points, but the Romans took it over, you know. And they, it was a slave society, slave societies often look at manual labor with a great deal of condescension. So that's, you know, in the end, I think that's what stopped them. But the other thing is, I think that if you don't have a concept of progress

• 29:33Speaker 01

  and you don't think that you, that by studying things and investigating things and doing what we would call research, uh, that in order to make the world a better place, at least from a material point of view, if you don't have that concept. There's not going to be an industrial revolution. And the Chinese don't have that concept either, you know, coming back to China. I look, you know, quite a lo- a long time for this. And basically, all the Chinese experts that I have read essentially said that the concept of progress is basically absent. Now, that's concept that's emerging in Europe in the fifteenth to sixteenth century. By seventeenth century, it's quite commonplace.

• 30:12Speaker 01

  And once you have that, you can sort of see all those smart guys trying to solve practical and pragmatic problems, you know. So scientists, many scientists, almost all scientists, I would think, there's some exceptions. Almost all of them said, look, I want to do science, not only because I'm curious and not only because I want to illustrate the glory and the wisdom of the Creator. I want to do science because I want to make life better. Now, whose life is a different question, but that is what they really emerges in Europe. And no other civilization does that, Tyler.

• 30:48Tyler Cowen?

  The Romans are very good at infrastructure. You can go see the aqueduct in Segovia.

• 30:53Speaker 01

  Oh, yes.

• 30:54Tyler Cowen?

  Or the waterworks in Istanbul, the Roman system of roads. Isn't there some notion of progress behind those developments? Or Caesar encountering what we now call Britain, right?

• 31:04Speaker 01

  No, no, they be, I think the idea that they had a concept of progress, they, you know, they were practical people and they needed to bring water from here to there and they did that and they needed to build roads so that the soldiers could march and occupy the world or the world as they knew it. But I don't think there is a concept of progress the way we would think of it. And it's sort of an interesting little book that I published in my series, which you may uh uh uh want to look at about Pliny. And, you know, you look deep and this is, you know, uh, somebody who really knows Pliny. And he really points this out that Pliny, you cannot find anywhere, and Pliny was sort of the type to summarize essentially everything, like a little encyclopedia, what was known.

• 31:49Speaker 01

  Basically, there is no concept that things were getting better over time. And this is a book by Richard Sallard, so he was one of the great classical scholars of our time. And essentially, there is no concept of progress in there. There is no problem in, concept of progress in any of the Roman writers. Now, some of the engineers, obviously, were trying to, you know, make things work better. Okay. But it is not really a social movement, and as soon as a, a, a problem has been solved, they say, okay, we solved that, and we, you know, and, and that's it. Whereas in Europe, you know, there's never, it's never good enough. You make water mills more efficient, you will have even more efficient, and then on and on and on. And that is the engine that drives sustainable growth. Okay.

• 32:34Speaker 01

  The idea that whatever we have today, we can make it better. And that's maybe not a natural insight, maybe it's not hardwired in us.

• 32:41Tyler Cowen?

  You've argued that during the Industrial Revolution, the British have a notable advantage in human capital over, say, the French. What are the ultimate roots of that advantage? Where does it come from? Is it Protestantism? Something else?

• 32:54Speaker 01

  No, no. In fact, I, are the British Protestants? I mean, the Anglican Church is a weird mixture of a lot of Protestant belief minus the Pope, right? I mean, I'm not sure that you could call them Protestant. They're kind of Anglican, but no, it's not religion. I'm a, I'm a, I think that's, that's a whole, you know, a load of nonsense. What happens in Britain is, and this is something worth pointing out, because this is the sort of new book that I'm, I'm writing right now, it's based on some articles you've seen. But the new book is basically arguing that the main thing that gave Britain its advantage over other things was that they had more skilled, and that their skilled workers were better

• 33:39Speaker 01

  than everybody else. And the question is, where do these skills come from? And the answer, there's only one answer, that is apprenticeship. Because there's no engineering schools, there's no technical schools. Basically, every skilled engineer, artisan, you know, mechanic, shipbuilder, whatever you are looking, they are all trained by other people like them. They're trained, their apprentices trained as masters. That's how it works. It works like that everywhere. But the difference is that in England, the system is market-based, you see. In Europe and on the continent, until the French Revolution came around, this is controlled by guilds and it's very heavily regulated, it's very heavily scripted. And so in England, it's a much more free system.

• 34:21Speaker 01

  And every young lad who's looking for a master can go around and choose the master that he likes best and that is most suitable to him. And so what you get is, you know, that because this market is competitive, you get a quality of education to these people, which is vastly better than it is in a continent. People are more diverse, they're more flexible, they're better trained. And certainly by the middle of the 18th century, this is what everybody is saying. And the French and the Germans and the Dutch and the Austrians and the Spanish all know that if you want to build a sophisticated piece of equipment, you need an English engineer to run it. And that's what they do.

• 35:06Speaker 01

  And these people are all over the continent. And of course, Britain is worried about this, so they passed these laws prohibiting the immigration of artisans, which of course they couldn't enforce. But that's the fact that that is by now, I think, not really disputed. And the argument that we're making is that, you know, inventors are all good and nice. But if you don't have the people to scale it up and maintain it and install it and operate it, it's not going to do you any good. And that's where the skills are, and that's what they had. And, you know, and so we have, you know, hundreds of pages of evidence of that. And we're looking at every industry you can imagine, and it pops up over and over and over again.

• 35:48Tyler Cowen?

  Several years ago, you had a piece in the Journal of Political Economy with Morgan and Cormac on living standards. And you give a somewhat more optimistic perspective on the Industrial Revolution living standards. Could you explain what you find in that piece?

• 36:01Speaker 01

  Well, the piece really deals about, if you're talking about the JPE article that we published in 2023. And that piece, the main argument about that, well, the main argument of that piece wasn't about so much about living standard. It really was about the sort of regional distribution.

• 36:21Speaker 01

  Of Britain, Britain's industry and how the sort of centre of gravity of the economy moves from the south to the north of England, at least temporarily, I should say. But it was really mostly about about skill. But what is true in that argument is not so much that the living standards were increasing, but that they were just higher. And that basically the quality of life in Britain as early as seventeen hundred was higher than anywhere on the continent with the exception of the Netherlands. And so Britain, there's very good evidence that the British were better fed, better educated, better housed and and on and on and on. And as a result, the reduced form of looking at that is height.

• 37:05Speaker 01

  The data show that on average, British soldiers, which are the people that are getting measured, were two inches taller than the French. And that the reason for that is is because as children they experienced better living standards. I think that is the way of thinking about it. Now, that sort of feeds back again into the fact that the quality of of workers in general is substantially higher than it is on the continent. And that's where their wages are higher. So the notion that they were innovating because people were trying to save labour because the wages were so high in England, you know, misses sight of the fact that the reason wages were higher was because British workers on average were more productive.

• 37:46Speaker 01

  But I would be hesitant to say that I've ever convinced myself that living standards were rising during the sort of heyday of the Industrial Revolution. It's that turns out to be complicated issue because at the same time that Britain was developing technologically very quickly and establishing factories, you have very rapid population growth. And it's population growth that's driven by higher birth rates rather than by a lower death rate. And what that means, of course, that you have a very large chunk of people who are not, you know, who are young and still not productive but need to be fed. And so the rise in the dependency ratio, in addition to the fact there's more people

• 38:28Speaker 01

  around, is essentially putting a constraint on the rise of living standards. And that abates at some point in the middle of the nineteenth century, and then you see living standards rising very rapidly. During the Industrial Revolution, I think the evidence that things were getting better. Is very mixed. And so there are, I know there are optimists and there are pessimists about this. And I would count myself as probably as somewhere in between. Things weren't getting a lot worse. Things weren't getting a lot better, a lot depends on for whom, you know. So there's groups that are gaining clearly, there are groups that are losing clearly, there are groups where we don't know. On balance, I would say probably overall living standards in Britain in eighteen forty

• 39:14Speaker 01

  were not much better than they were in seventeen sixty, but they were different. Because people, you know, one of the reasons that people don't do well, they live in cities, which are terrible at the time, right? This is sort of widely described and it's fully, you know. The most famous book about that was, of course, Philip Engels's Condition of the Working Class in England, which was largely plagiarized from a whole bunch of doctors living in the Midlands and observing these places. But but that is, I think, a complication in the history of living standards during the Industrial Revolution. That really means that it isn't so obvious that this was good for the people living through it. It was very good for their grandchildren.

• 39:52Tyler Cowen?

  Now, in mid to late nineteenth century, German science starts doing incredibly well. What is behind that?

• 39:58Speaker 01

  Well, Germans started, I think there is a major revolution in Germany after, during and after Napoleon. And you get a whole bunch of reforms. Most famous are the reforms, of course, in Prussia, which is the main country in the northern part of Germany, in which they completely rejiggered their administration. The Steinhardenberg reforms basically creates the world's first really effective civil service. But at the same time, what the Germans do, they invest very heavily in human capital.

• 40:38Speaker 01

  And the evidence suggests that German universities and German schools were much more geared toward giving people a background in the kind of knowledge.

• 40:51Speaker 01

  That helps creating the basis for a sort of second generation manufacturing technology. And so a lot of this is associated, of course, with the reform of the German university system, associated with Wilhelm von Humboldt, who essentially created what one might call the sort of modern, the idea of the modern research university. But there's also these technical universities called Technische Hochschule, which the Germans founded, and there's a recent paper by a former graduate student of mine, Ralph Meizensal, at Chicago Fed, who shows that the closer you were to a university in the middle of the 19th century, the more likely you were to be in advanced manufacturing.

• 41:32Speaker 01

  So I think here it really is to some extent improvement in human capital, but also the fact that the state in Prussia and in other places as well, the little statelands, basically convinced themselves that this was the way of the future. If Germany was going to be playing with the big boys and not being wiped out by Napoleon's, they were in 1806, they should build economy based on science. And the odd thing is that Britain, even though it was the leader, really was actually late in catching that on. So the British universities, really, by the middle of the 19th century, people started worrying about this, "Look, the Germans and the French have these more advanced institutes of higher education,

• 42:15Speaker 01

  and our universities are still way behind." And so in the second half of the 19th century, there's this sort of supposed decline of Britain, because they're still based on skills, whereas the Germans more and more get committed to the application of scientific research to their economy. And that takes a long time and there's certain, it's not an easy thing. So, you know, the two Germans invent things like organic chemistry, right? Joost van Leeuwen and Friedrich Wörther, and they make major contributions to electricity, to internal combustion engine, to a whole range of industries. But a lot of that is based on science and it's striking.

• 42:59Speaker 01

  Not just that German universities produce these scientists, but that businesses, particularly manufacturing, hire these people as consultants and put them on their board of governors and their board of trustees.

• 43:12Speaker 01

  And so that's, that's, I think, a striking thing. The Germans, really, more than the British, realize the potential of science. And certainly by, by 1900, they're leading the world, certainly in chemical, in, in electricity, in, in food processing industries. And so it is, I think, above all, human capital, but also the policies that were there to support it.

• 43:37Tyler Cowen?

  How much of a burden on your life has your new Nobel Prize been? Or is it just fun?

• 43:43Speaker 01

  No, I mean, it is a lot of fun. I tell you, clearly a lot of warm glow. I mean, I'm still waking up every morning and I say, you know, am I dreaming this? And what the hell am I doing? It has obviously disrupted my life. And, you know, I'm going to turn 80 this summer, so I'm sort of settling in my way, so to speak. And this has disrupted it to a great, to a great extent. And I'm still trying to, to cope with that. But I'm, one of the things that's working to make that worse is because I refuse to retire. See, so Peter Howard, my friend and my colleague, who's almost exactly my age, retired 12 years ago from Brown. So, you know, he's living in a life of leisure.

• 44:28Speaker 01

  And I have to go to faculty meetings and supervise 10 graduate students and T-shirt and undergraduate course. So that, plus all the other things that are demanded of me, has, has been, shall we say, disruptive. And, you know, I sleep, you know, relatively poorly now because I wake up in the middle of the night and I go, oh shit, you know, I forgot, you know, to reply to that email and I, I haven't yet committed to that invitation and, and I forgot. I mean, these things happen. And so I hope that that will fade eventually and that I'll settle into a new pattern. But it will be probably quite different from the previous pattern, Tyler, I think. I mean, my wife is looking at me with some concern, shall we say, about how I'm having

• 45:11Speaker 01

  10 balls in the air and every once in a while I drop one.

• 45:15Tyler Cowen?

  We're about out of time, so Joel Mokyr, thank you very much. Again, I'm a big fan of your new book with Greif and Tabalini, Two Paths to Prosperity: Comparing Europe and China.

• 45:25Speaker 01

  Keep advertising it, Tyler.

• 45:31Tyler Cowen?

  Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm @TylerCowan, and the show is @CowanConvos. Until next time, please keep listening and learning.