Book Synopsis

How the social organization of Europe and China shaped their divergent economic and political trajectories over the past millennium

In the eleventh century, when Europe was still backward and poor, China was a rich and sophisticated civilization. Yet Europe became the birthplace of democracy and the Industrial Revolution, driving the Great Enrichment, while China stagnated until the end of the twentieth century and was always ruled by autocracies. Two Paths to Prosperity traces the emergence of two very different social organizations in premodern China and Europe--the clan and the corporation--showing how they were key factors in the economic and political divergence of these two great civilizations.

In this landmark book, three leading economists offer a bold new account of why Europe and China evolved along such different trajectories. In the early Middle Ages, public goods like risk sharing, religious worship, education, and conflict resolution were provided by nonstate organizations in both societies. China increasingly relied on kin-based cooperation within clans, while weaker kinship ties in Europe gave rise to corporations such as guilds, universities, and self-governing towns. Despite performing similar functions, clans and corporations were built on very different principles--with lasting consequences until today.

Providing a novel answer to a fundamental question in economic and political history, Two Paths to Prosperity shows how extended kinship in Chinese society facilitated the consolidation of autocracy and hindered innovation and economic development, and how corporations in Europe influenced emerging state institutions and set the stage for the Industrial Revolution.

Review Quotes

"A New Yorker Best Book of the Year"

"A thousand years ago, as Europeans waded through the Middle Ages, their Chinese contemporaries were living in a civilization that was among the most sophisticated in the world. So why, in the centuries that followed, did Europe become richer and more powerful than China? In their ambitious history, Greif, Mokyr (a winner of this year's Nobel Prize in Economics), and Tabellini suggest that cultural values and social organizations helped establish divergent paths. Confucianism held sway in China, where kinship groups managed local life. But in Europe, where family bonds were looser, strangers cooperated in organizations such as guilds and self-governing towns--institutions that gave rise to capable states, flourishing markets, and the Industrial Revolution."-- "New Yorker"

About the Author

Avner Greif is the Bowman Family Endowed Professor Emeritus in Humanities and Sciences and Professor of Economics at Stanford University. Joel Mokyr, winner of the Nobel Prize in Economics, is the Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History at Northwestern University and Sackler Professor at the Eitan Berglas School of Economics at Tel Aviv University. Guido Tabellini is the Intesa Sanpaolo Chair in Political Economics and Vice President at Bocconi University.