What separates Europe’s rise from China’s long stagnation? A fascinating answer comes from economic historian Joel Mokyr in a recent presentation.
Mokyr highlights a profound institutional divergence over the last millennium. In China, extended families, lineages, and clans grew increasingly central to social organization. In Europe, their importance declined, gradually replaced by what Avner Greif called “corporations” — associations of unrelated people who voluntarily come together to pursue a shared objective.
This isn’t just about family size. Decades of work in anthropology and psychology show that growing up in tight-knit extended kin networks shapes culture and psychology differently than growing up in societies where non-kin institutions dominate. The result is a contrast between more communitarian orientations (strong loyalty to a close in-group, weaker trust toward outsiders) and more universalist orientations (greater willingness to cooperate with strangers on the basis of shared goals or rules).
Mokyr gives concrete examples of these European “corporations”: guilds, monasteries, universities, and even military companies. Some were largely non-profit in orientation; others blended public spirit with pay. What united them was that membership was voluntary and exit was possible — unlike family, which you cannot leave.
How does this connect to real economic life?
At home-economic, we share much of this framework: most public goods are actually local or club goods, cooperation depends on group boundaries, and associational life often involves significant unpaid or underpaid contributions.
Is it possible that there is another angle to the core distinction that is slightly different?
Instead of a sharp divide between “family” versus “non-family” institutions, we observe that every transaction contains a blend of public-spiritedness and private interest. The key variable is the anchor of the interaction:
• In tight kin or clan settings, the anchor is often the family/group itself.
• In associational settings (guilds, fire departments, churches, professional networks), the anchor is usually a shared objective or cause.
This blend shows up constantly. A firefighter receives a stipend but accepts the role largely out of civic duty. A business owner might give a meaningful discount to a fellow church member or longtime customer without giving the product away for free. Group affiliation influences the transaction, but self-interest never fully disappears.
The more clearly a group’s shared purpose is defined, the easier it becomes to understand where public spirit ends and private calculation begins.
Mokyr’s analysis is enlightening. It reminds us that culture, institutions, and psychology are deeply intertwined — and that the ability to form effective groups beyond blood ties may have been one of Europe’s quiet advantages.
What do you think? Is the family vs. corporation divide the right frame — or is the real story the varying mix of “we” and “me” in every human transaction?
Home Economics 