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Mokyr's decades of research have revealed the underlying logic of modern economic growth: the sustained prosperity of human society is driven neither by the simple accumulation of physical capital nor by population dividends, but by a historical evolution process in which useful knowledge is generated, axiomatized, encoded, and disseminated at low cost in an open market of ideas, and is consolidated by stable social organizational containers.
Mokyr's "useful knowledge economics"
Since Trump began his second presidential term in 2025, the global geopolitical and economic landscape has undergone further changes, with the international economic division of labor system based on comparative advantages accelerating its shift towards technological nationalism based on "geopolitical security" and "technological sovereignty". Restrictions on semiconductors, compute power blockades, and the derisking of key supply chains have made the autonomous controllability of core technologies and the endogenous capability for disruptive innovation a core theme in the game of major powers.
The "economics of useful knowledge" system constructed by 2025 Nobel Economics Prize winner Joel Mokyr provides an insightful new paradigm for understanding the scientific and technological origins of modern economic prosperity and the "Great Divergence" between Eastern and Western history. Mokyr's analytical framework focuses on the micro-transformation mechanisms of knowledge, internal structure, retrieval costs, the market for ideas, the intermediate layer of high-skilled craftsmen, and the role of non-kin legal entities and clans in shaping knowledge sedimentation mechanisms.
We review Mokyr's major works and theoretical ideas from the perspective of the forefront of research on the "Great Divergence" in Chinese and foreign economic history, and explore the implications of Mokyr's theoretical ideas for endogenous technological innovation, sustained economic growth, and the construction of technological innovation systems.
Mokyr's research integrates evolutionary epistemology with comparative historical institutional analysis, taking into account theoretical dimensions such as micro-technological forms, epistemological structures, intermediate transmission mechanisms, idea markets, and social organizational containers, and presents clear logical progression and paradigm expansion in nearly 30 years of intellectual evolution.
The Rich's Leverage
Joel Mokyr
Chen Xiaobai | Translator
China Publishing Group
January 2008
Mokyr points out that the norm in human history is technological stagnation rather than progress. Although micro-inventions can bring about marginal efficiency gains, without breakthroughs in macro-inventions, trial and error will quickly encounter the physical ceiling of diminishing returns. However, the emergence of macro-inventions will inevitably impact existing economic interests, social order, and authoritative doctrines. Traditional guilds, feudal bureaucrats, and vested interest groups tend to form an "anti-technological progress" interest alliance. Therefore, whether a society can achieve technological breakthroughs depends on whether its institutional environment has the tolerance to accommodate paradigm shifts and accept macro-inventions.
2. The Gift of Athena
Duan Yibing, Tang Le
Science Press
January 2011
Mokyr emphasizes that the breadth of Ω knowledge determines the ceiling of Λ knowledge evolution. The vast majority of technologies prior to the 18th century belonged to "isolated Λ knowledge" that lacked Ω support. Trial and error based on experience, without guidance from underlying principles, not only easily reached physical limits, but also, due to the lack of axiomatization and standardized codification, heavily relied on "tacit knowledge" that was passed down through oral tradition.
The essence of the "Industrial Enlightenment" lies in the establishment of a two-way circular mechanism between Ω and Λ: scientists systematically encode their discoveries about natural laws into explicit knowledge, greatly reducing the knowledge search cost for the entire society; engineers and craftsmen can design technologies based on scientific principles, reducing blind trial and error; and bottlenecks in production practice in turn stimulate the scientific community to explore underlying principles. This two-way feedback loop gives technological breakthroughs the endogenous driving force for self-sustaining growth.
Enlightenment Economics
By Joel Mokyr
Zeng Xinxiong and Yue Gen
CITIC Publishing Group
July 2020
In *The Enlightened Economy* (2009), Mokyr applies an abstract epistemological model to dissect the British Industrial Revolution, seeking to answer why Enlightenment ideas did not remain confined to the elite's ivory tower but instead translated into tangible productive forces. Mokyr argues that Britain's ability to industrialize first stemmed not only from its top-tier scientists and knowledge creators such as Newton and Boyle, but also from a vast intermediate stratum of highly skilled artisans and expert mechanics—instrument makers, millwrights, clockmakers, and metallurgy workshop owners.
These individuals possess the ability to read geometric drawings, understand formalized language, and make precise measurements, becoming the "bridge" that connects top-level scientific principles (Ω) to bottom-level industrial production (Λ). At the same time, the UK effectively curbed attempts by rent-seekers and traditional guilds to use administrative power to hinder technological innovation through legal and political reforms in the 18th century, allowing disruptive inventions to rapidly achieve commercial diffusion in the market.
4. The Culture of Growth
Renmin University of China Press
January 2020
In "The Culture of Growth" (2016), Mokyr attempts to answer the question of why the Industrial Enlightenment occurred first in Western Europe, starting from the inadequacies of North's classic property rights paradigm: while property rights protection can explain people's willingness to retain wealth, it cannot fully explain the supply-side drive to explore new knowledge.
At the same time, Mokyr revealed the institutional premium of European political fragmentation. The coexistence of multiple European countries prevented a single political or religious authority from monopolizing the market of ideas. When the ideas of Copernicus, Galileo, Descartes, or Spinoza were suppressed in one country, they could escape to neighboring countries or spread their views through transnational publishing networks. The combination of political fragmentation and cultural unity formed a high-mobility, low-friction network of knowledge evolution, allowing heterodox innovations to penetrate blockades and survive.
Two Paths to Prosperity
Mokyr, in his co-authored work with Greif and Taberini, "The Two Paths to Prosperity" (2025), expands his analysis of time and space to the evolution of institutions and organizations over the millennia of the Middle Ages, proposing the social organization container hypothesis to explain the Great Divergence between East and West.
They attempted to summarize the historical "great divergence" between the European path and the Chinese path. The European path took the road of relying on non-kin corporate organizations and establishing legal mechanisms for stranger cooperation. Influenced by the church's policy of prohibiting close kin marriage, European kinship clans dissolved earlier and were forced to evolve into non-kin corporate organizations that transcended blood ties, such as independent universities, industry associations, autonomous cities, chartered companies, and scientific academies. To manage stranger cooperation, Europe developed a rationalized legal system, independent trials, and a contract spirit. Most crucially, independent universities and academies, as "corporate organizations," became stable containers for the codification, long-term accumulation, and cross-generational accumulation of knowledge.
China's path relied on building a familiar society based on blood ties and clan relationships, and bureaucratic centralized management. After the Song Dynasty, China's public goods supply, such as education, elderly care, disaster relief, and risk sharing, was highly dependent on clans tied by blood relationships, while politically it relied on a unified bureaucratic centralization.
Clan organizations are extremely efficient within familiar societies, but their cooperative boundaries are limited to blood ties, and governance relies on moral ethics and administrative mediation, failing to derive an independent commercial law system and cross-blood corporate organizations. The divergence of the two "organizational containers" in China and the West has had a profound impact on their respective knowledge evolution processes: China's technical formulas often remain private within clans or master-apprentice relationships (tacit knowledge), lacking public codification and corporate containers to carry them, making them easily lost due to war or family extinction; in contrast, Europe's corporate organizations have ensured the publicization, standardization, and cross-generational accumulation of knowledge.
In the field of economic history, there are divergent views among different schools of thought regarding the "Great Divergence" between China and the West. Mokyr engages in a fierce and enlightening dialogue with some mainstream theoretical hypotheses in his series of works.
Mokyr emphasizes that the similarities in living standards and market development between Jiangnan, China and Western Europe before 1750 masked fundamental differences in their "knowledge production networks". Relative prices and geographical resources may explain the demand for technological substitution at the micro level, but they cannot explain the source of macro-inventions. Without breakthroughs in principles such as atmospheric pressure and thermodynamics (Ω knowledge), low coal prices could not have induced the invention of the steam engine out of thin air. Resources and prices are demand-side incentives, and if there is a lack of knowledge networks with low search costs and scientific principles, the resource bonus will soon be consumed by population growth (such as the fuel crisis in the Song Dynasty). The essence of the Great Divergence is the divergence in knowledge generation mechanisms and selection environments.
For Robert Allen's famous "relative price induced lecture", namely the high wages and cheap energy in the UK induced capital to replace labor, Mokyr proposed clear boundary conditions. He believes that relative prices can indeed provide demand-side incentives for innovation, but if there is a lack of effective supply of useful knowledge, these incentives will ultimately reach a dead end; micro-level technological improvements may be induced by relative prices, but subversive macro-inventions must rely on underlying breakthroughs in epistemology.
At the same time, Mokyr's evolutionary epistemology also deepened Mark Elvin's "high-level equilibrium trap" and Justin Lin's "trial and error vs. scientific experimentation hypothesis". Mark Elvin and Justin Lin believe that ancient China, due to its extremely high efficiency in trial and error and population pressure, had a suppressed demand for mechanical replacement of labor, and the imperial examination system squeezed out exploration of scientific experimentation.
Mokyr points out that ancient Chinese technology was not lacking in innovative enthusiasm, but was trapped in a structural imbalance of being "rich in prescriptive knowledge and poor in propositional knowledge". Due to the lack of an axiomatized experimental system and a coding mechanism to reduce the cost of knowledge search, the extremely wise trial-and-error experience in ancient China's long history, after reaching the physical ceiling, was unable to achieve a leap towards modern continuous growth, which can be seen as a partial answer to the famous "Needham's Grand Question".
In the field of Western economic history, Mokyr's "useful knowledge economics", evolutionary epistemology paradigm, and related theoretical explanations of the "Great Divergence" are considered one of the most important explanatory frameworks for the Industrial Revolution and long-term economic growth over the past few decades. While acknowledging its milestone significance, scholars from different schools of thought, such as the California School, left-wing geo-historians, econometric historians, and Orientalists, have also raised criticisms and counterarguments against his theoretical views.
For instance, in terms of the driving mechanism of economic growth and technological innovation, Mokyr's core contribution lies in proposing the paradigm of "useful knowledge" and "idea market" from the perspective of epistemology and cultural evolution, revealing the underlying source of long-term endogenous economic growth. However, critics point out that Mokyr's theory overemphasizes the role of ideas, concepts, and culture, while neglecting the hard constraints on the demand side, such as relative factor prices (like high wages and cheap energy), market scale expansion, and physical capital accumulation.
From a global historical perspective, Mokyr finely dissected the internal knowledge coding, axiomatization, and institutional microstructure that lowered the knowledge retrieval cost for the entire society in Western Europe, providing a powerful endogenous logic for understanding the European miracle. However, critics from the California School and the field of global history point out that Mokyr's framework has an obvious "Eurocentric" tone, to a large extent evading historical facts such as colonial plunder, unequal global trade, slavery, and the technological nourishment of non-Western civilizations, such as China and the Islamic world.
At the societal and macro-level, Mokyr and his collaborators broke down abstract cultural concepts into concrete social organization containers, such as non-kin corporate organizations versus kin-based clans, providing a new theoretical framework for comparative historical institutional analysis. However, critics point out that the theory has a certain degree of static and idealized contrast in terms of organizational forms in non-Western societies like China, such as the openness of clans and bureaucratic governance networks, limited by the "rearview mirror" of historical observation, and fails to fully present the complex dynamics within Eastern societies.
Amid intensifying global technology competition and economic structural transformation, the traditional model of factor-driven growth and imitation-based catch-up has hit the physical ceiling of diminishing marginal returns. Mokyr's thinking offers a sobering historical lesson: if the system pursues only output value and engineering metrics while suppressing the marketplace of ideas that permits free exploration and tolerates paradigm deviation—if knowledge accumulation lacks axiomatic codification and open legal structures, relying instead on private transmission and administrative fragmentation—then endogenous technological innovation will lack a sustainable source of renewal.
Only by continuously deepening the reform of the technological innovation system and structure, reducing institutional friction in the dissemination and diffusion of knowledge, and fully releasing the innovative potential deeply rooted in society, can we truly achieve long-term prosperity driven by endogenous innovation through the continuous breakthrough and application of "useful knowledge".
The author is a social and cultural scholar