Clans, corporations ... and clones
A third path to prosperity?
Reminder: Today at 13h10 in the Jan Mouton building on Stellenbosch campus, I will interview economist Tyler Cowen on the status of economists, the future of the university, AI, and a range of related topics. All are welcome. No RSVP required.
One of the most influential questions in economic history is why some societies became rich while others, equally sophisticated for long periods, did not. In their recent book, a superhero team of economic historians – Avner Greif, Joel Mokyr, and Guido Tabellini – offer a clear and powerful way of approaching this problem. Rather than focusing primarily on geography or resources, they emphasise social organisation. Before modern states could reliably provide law, security, or welfare, societies had to organise cooperation locally. How they did so mattered enormously for long-run development.
In China, the dominant solution was the clan: a large, kin-based organisation that combined mutual insurance, dispute resolution, education, and moral discipline. Clans relied on loyalty to family, respect for elders, and shared ancestry. Much of Africa developed similar kinship-based systems – lineage networks, age-set organisations, and rotating savings groups like the stokvel, which still thrives in South Africa today. In Europe, cooperation increasingly took place through corporations: purpose-built organisations such as guilds, towns, monasteries, universities, and later joint-stock companies. Membership was based on rules rather than blood. Corporations were open to strangers, governed by formal procedures, and allowed people to belong to several organisations at once.
These European corporations helped generate contract law, representative institutions, and habits of impersonal cooperation. They supported the knowledge accumulation that eventually fed into the Industrial Revolution. Chinese clans, while effective at local governance, tied cooperation more closely to kinship and hierarchy. Over centuries, these contrasting organisational forms shaped political institutions, legal systems, and patterns of innovation.
Prosperity, in this view, is about more than technology or ‘culture’. It is about how people organise cooperation when trust is limited and enforcement is costly. That framing also raises a natural question: what happens when a new way of organising cooperation becomes available – one that sits outside the familiar clan-versus-corporation divide?
