This book is the product of three distinguished economic historians, including a 2025 Nobel Laureate in Economic Sciences, Joel Mokyr. While he, Avner Greif, and Guido Tabellini all have PhDs in economics, they also each have knowledge about European history, in particular covering the early modern and modern eras. Combining their understandings of European economic history, the authors chart one of the two paths in the book’s title, Two Paths to Prosperity. They assess the influence of many features of early modern European culture and social organization on the formation of political and economic institutions. This European path to prosperity culminates in the Industrial Revolution, with unprecedented forms of economic production that enriched people’s material wellbeing. The authors of this work have also read a selection of the English language historiography on Chinese history, juxtaposing contrasts between Chinese “clans” and European “corporations” and contrasts between a stable Chinese autocracy and the evolution of the rule of law, the rise of parliaments, and early modern free towns in Western Europe.

Social historians of early modern China would no doubt cringe if I were to explicate the authors’ understanding of “clans” and kinship institutions more generally. But I won’t subject readers to that pain. In brief, the authors often seem unaware of how Chinese “clans” and what are more commonly called “lineages” varied in their capacities, priorities, and practices. With their fixation on Chinese “clans” as their counterpoint to European “corporations,” the apparently crucial role of kinship relations in economic history relieves these authors of the need to discuss much about non-kin relations in early modern Chinese economic history. The authors’ inaccurate and incomplete understanding of early modern economic Chinese history is not, however, responsible for the absence in the book of a Chinese path to prosperity, despite the title of the book advertising such a path. Let me cut to the chase.

Moving through the first nine (of eleven total) chapters of the book, the authors present what they perceive to be Chinese obstacles to a path to prosperity. When juxtaposed with their version of why industrialization first began in Western Europe, the chapters contribute to a considerable literature that tries to explain why China failed to industrialize before Western Europe. They note, as many other scholars have before them, that China was so much more advanced than Western Europe in economic production and trade, agricultural technologies, and urbanization in the Song period (960 to 1279 CE), that one has to wonder why the Chinese did not stay in the lead. The European materials track Europe’s “path to prosperity,” while the Chinese materials chosen suggest only obstacles, making unclear what “path to prosperity” Chinese culture and institutions could have fostered. By Chapter 9, the authors have noted that early modern Europe had monasteries, universities, academic and scientific societies, autonomous cities, the republic of letters, practical scientists, and skilled artisans who learned by doing. China in contrast did not accumulate the same kind of useful knowledge. Nor did China have the kind of entrepreneurial class that Europe had. The authors also offer sweeping generalities that boggle the mind. For instance, “The Qing emperors tended to be conservative and inward-looking” (419). In brief, the first nine chapters of the book present contrasts between socially and politically dynamic countries in Western Europe with the stable if not static empire in China—an image present in Western views of China since the Enlightenment.

The last footnote of Chapter 9 discusses the encyclopedia of technology and engineering entitled Tiankong Kaiwu (The exploitation of the works of nature) by Song Yingxing (1587–1666). When readers then turn to the first page of Chapter 10, entitled “Modern China,” they immediately confront the authors’ great leap from Ming–Qing China to the 1980s. After briefly commenting on major economic changes taking place in the 1980s and 1990s, the authors state their vision of the Chinese “path to prosperity”:

Somehow the authors chose to ignore China’s path of industrialization from the end of the Qing dynasty through the Republican era (1912–1949), the Japanese invasion, and the first three decades of the People’s Republic of China (PRC). The authors claim that the Chinese path to prosperity they see in the 1980s and 1990s includes kin-based social organizations and state institutions similar to those present imperial times. Does this mean that those historical similarities are the main elements of China’s reform-era economic development? Not likely—it is the authors’ peculiar argument that makes the book’s claims fragile at best. While some China historian might want to place this book’s claims within the historiography of Eurocentric perspectives on economic changes in China and Western Europe, I am personally tired of pointing out the limitations of Eurocentric perspectives regarding Chinese economic, political, and social changes from the early modern period forward. Instead, I’ll offer a brief account of China’s path to prosperity.

The absence in Two Paths to Prosperity of any discussion of Chinese economic history from the late nineteenth century through most of the twentieth century leaves out much of China’s modern economic history and in particular fails to address the paths along which Chinese industrialization began to develop. Modern industrial projects began in the 1860s, with the intent of strengthening the state’s military defense capacities as part of the Self-strengthening Movement (1861–1895). In the 1870s and 1880s, “government-supervised and merchant-managed” (guandu shangban) enterprises offered merchants opportunities to buy shares in return for dividends; these enterprises subsequently issued hundreds of public offerings. A good survey of the institutional formation of officials and merchants working together can be found in a chapter by Madeleine Zelin in the Cambridge Economic History of China. Footnote ¹ This is only one of several chapters that allow an interested reader to see what Chinese paths of industrialization developed from the 1860s through the first three decades of the PRC’s industrial policies. Reading these chapters would prepare readers of Two Paths to Prosperity to evaluate the argument about China’s “peculiar” path to prosperity in the 1980s and 1990s.

The authors of Two Paths to Prosperity do, in fact, cite the examples of “clans” as business organizations from Zelin’s chapter, but ignore the fact that “clan” involvement in businesses is only one of several forms of business organization. In fact, in the late Qing era and in the Republican era, both central and provincial governments promoted agendas for industrialization. As Morris Bian explains, “The nationalist elite collectively developed an ideology of economic development based on state-owned enterprise, heavy industry, national defense, and the determination to create a planned socialist economic system. Ultimately, this ideology led directly to the development and expansion of central and regional state enterprise.”Footnote ² Another chapter in the Cambridge Economic History of China, Linda Grove and Tōru Kubo’s “Handicraft and Modern Industries,” evaluates three paths of Chinese industrialization. One path depended on private capital and its investment in technology along with the development of effective management, a process similar to the path taken in Western European countries. The second path of industrialization Grove and Kubo address, state investment, is examined at greater length by Bian; and the third path they call a “semi-industrial” path based in rural settings. This semi-industrial path to industrialization is not found in Western European economic history.

In a contribution to The Cambridge World History I noted that in the early twentieth century, Chinese officials understood “industry” (gongye) to include not only new factories utilizing technologies imported from abroad, but also changes to technologies of craft industries used in agrarian households.Footnote ³ I discovered this understanding of “industry” in the 1904 Initial Compilation of the Industrial Arts in Zhili and the 1919 Survey Report of Jiangsu Province Industries. The governments of the last decade of the Qing dynasty and the early Republican era sought to spread new industrial techniques through bureaus (ju) intended to disseminate information on the “industrial arts” (gongyi). By the 1930s, the understanding of “industry” in China no longer included craft production in rural households.

During the 1930s, the Republican-era central government and provincial governments played major roles in promoting industrialization. The full-scale Japanese invasion of China in July 1937 led the Nationalist government to retreat to the southwestern city of Chongqing, where their provisional capital was established. Along with the migration of people came the shipment of factory equipment—by rail, along the Yangzi River, and by arduous human-powered transport over land—to relocate industry in the southwest. By the 1940s, the Republican state had nationalized increasing numbers of firms in the southwest. Not surprisingly, the PRC drew on the legacy of the Nationalist government’s control over industry after the Communists defeated the Nationalists in 1949.

From 1950 to 1956, the Communist state pursued a Soviet-style centrally planned industrial policy that prioritized heavy industry and state ownership. In 1956, Mao Zedong called for promoting agriculture and light industry to balance the weight placed on heavy industry; Mao anticipated that increasing agricultural and light industrial production would yield more capital to invest in heavy industry. In 1964, Mao initiated the secret development of heavy industry in the interior, known as the Third Front Movement. Located in remote areas with limited transportation access, these factories were far easier to defend than industries in maritime port cities and those along the Yangzi River, all of which enjoyed excellent commercial transportation routes that could be repurposed by foreign soldiers aiming to attack Chinese industries. In brief, beginning in a period Two Paths to Prosperity claims to evaluate, through the many decades the authors skip after the demise of the Qing dynasty in 1911, from the 1860s through the 1970s, Chinese states exhibited recurring concern with the heavy-industry development necessary to develop military capacities to defend the country against foreign invasion.

After the first three decades, in which the PRC economy was organized as a socialist planned economy, the next two decades ushered in a reform era. In the 1980s and 1990s, we see similarities to the three paths of industrialization that Grove and Kubo identify in the early twentieth century. Barry Naughton’s seminal analysis of China’s transition from a planned economy to the “socialist market economy” announced in the 1992 Fourteenth National Congress is expressed sharply in his book Growing Out of the Plan, 1978–1993 (1995). Naughton explains that policy changes did not attack the planned economy so much as they allowed some fifteen years of economic growth outside the plan. First, opening Sino-foreign joint ventures in Special Economic Zones meant that foreign capital, technology, and management practices became part of late twentieth-century Chinese industrialization, just as the British and Japanese in particular had brought foreign capital, technology, and management practices into early twentieth-century Chinese industrialization. The difference between these two historical moments is that the later Chinese state was able to dictate the terms upon which joint-ventures were developed.

Secondly, Naughton explains, state-owned enterprises in China existed in the first half of the twentieth century; and during the first three decades of the PRC, State-Owned Enterprises (SOEs) became the firms expanding China’s industrialization efforts. In the 1980s and the 1990s SOEs persisted, with some becoming even larger and more dominant national firms, while others, especially SOEs at provincial and sub-provincial levels, experienced downsizing. Finally, what had been early twentieth-century handicraft semi-industrialization in rural areas was replaced in late twentieth-century rural areas by “township and village enterprises” (TVEs). These firms were considered “collective” enterprises, not private firms. Their sources of funding and their management practices were diverse. Some firms depended on Overseas Chinese remittances; others were managed by local party leaders who could tap sources of funding. TVEs became successful light industrial firms in many parts of the country. To make clear how much China had grown out of a socialist planned economy, the gross value of industrial output (GVIO) by TVEs surpassed that of SOEs by the mid-1990s. TVEs subsequently faced intense competition and limited financing, sending roughly 30 percent of them into bankruptcy. Obviously, China’s industrialization and its path to prosperity has political and economic institutions and ideologies different from those in Western countries.

China’s path to prosperity encourages us to consider the similarities and differences among the “paths to prosperity” that have been followed in different parts of the world. Focusing just on East Asia (including Northeast and Southeast Asia), we can see paths to prosperity influenced by the varied strategies and policies of governments in post-World War II Japan, South Korea, Taiwan, Hong Kong, and Singapore, to list the most salient examples. Turning to China, its path to prosperity has a long historical background that has culminated in it having the world’s largest middle class by roughly 2015, and leading the world in reducing absolute poverty, having lifted roughly 800 million people out of absolute poverty between 1990 and 2025.

Scholars should aim to establish metrics of success that avoid normalizing the path to prosperity of nineteenth-century Western Europe and the white settler societies it established in other world regions. Twentieth-century paths to prosperity included strong guidance by states in ways absent from nineteenth-century Western Europe. China’s path to prosperity is only “peculiar” to those who can see only Western paths to prosperity as normal. By now, that perception should be more generally understood as a myopic Eurocentric view.