The Science and Ethics of Cooperation

[Contribution to the Reimagining Society Project hosted by ZCommunications.]



The cooperative system is fundamental to the organization and structure of a Prout (the Progressive Utilization Theory) economy. It is an expression of economic democracy in action – cooperative enterprises give workers the right of capital ownership, collective management and all the associated benefits, such as profit sharing.[i] Prabhat Ranjan Sarkar, the propounder of Prout, goes further and argues that an egalitarian society is actually not possible without a commitment to the cooperative system.[ii] The commitment is not just to an economic order but also to a cooperative ethic and culture. This essay explores some of the scientific evidence that humans have a predisposition to cooperation and in particular to economic cooperation. The evidence comes from a new and exciting field of research known as neuro-economics. We then turn to those insights provided by sociological studies.




Neuro-economics is the study of the neuro-physiological underpinnings of economic decision making. The field is new and providing unexpected insights into human economic behavior. Classical economic theory requires individuals to make complex calculations to maximize their personal advantage or utility. Utility, however, is a strangely ambiguous concept. On the one hand it is given a numerical value which implies the counting of something but on the other it is entirely abstract and not anchored to anything in the real world that can be counted. The advent of neurophysiology led to the idea that utility was really a surrogate for some chemical currency inside the brain, with most interest focused on serotonin molecules because these are known to be responsible for the experience of pleasure.


It turns out that a wide range of molecules of emotion[iii] impinge on the mental cost-benefit calculations that are supposed to take place inside the brain and they have unexpected effects. For example, in a ‘sharing experiment’, person A was asked to share a sum of money with person B. These experiments demonstrated behavior inconsistent with neoclassical theory. People appear to put a high value on fairness. In a follow up experiment, persons A and B were placed in the same experimental scenario as before, but they were (unknowingly) given an intranasal administration of oxytocin. Oxytocin is a neuropeptide that plays a key role in social attachment and affiliation in animals and causes a substantial increase in trust in humans. In these experiments the effect of oxytocin was to increase the amount of money that A gives B. The experimenters concluded that "oxytocin may be part of the human physiology that motivates cooperation."[iv] It is worth adding that such hormone-mediated interactions are not confined to human relationships but are also likely to be involved in human-animal relationships.[v]


Oxytocin is not the only neurochemical to promote cooperation. Recent observations of bonobo monkeys in the jungles of the Congo reveal fascinating contrasts with chimpanzees.[vi] Bonobos are matriarchal and show little aggression compared to the patriarchal chimps. Chimps respond to strangers with aggression, while bonobos demonstrate curiosity. When under stress, chimp tribes degenerate into fighting while bonobos respond to stress by engaging in collective sexual activity. Scientists have concluded that bonobos demonstrate higher levels of trust both with each other and with strangers. Of most interest, however, from a neuro-economics point of view, is the ability of the monkeys to perform a simple task requiring cooperation in retrieving some bananas that are out of reach. Although both species are intelligent enough to work out a solution (for example, by one climbing on the shoulders of the other or by one holding a ladder for the other), the chimps fail because they cannot trust one another. On the other hand, bonobos have no trouble cooperating to retrieve the bananas.[vii]


It turns out that these differences can largely be correlated with a single gene – a so-called ‘social gene’ that acts via a neuropeptide called vasopressin. Bonobo monkeys have the social gene, chimpanzees do not. And of particular interest – humans have the same vasopressin gene as bonobos. Social capital can be defined in terms of trust and empathy and these behavioral traits oil the wheels of social and economic interaction by encouraging cooperation between strangers. We now know that oxytocin and vasopressin are the physiological underpinnings of trust and that they influence levels of cooperation.


Managing Social Capital


We must immediately dispel any notion that trust, empathy and cooperation are predominantly determined by genes. Genes represent potentialities. How those potentialities are expressed depends entirely on the choices people make in the context of their genetic endowment and social environment. It is therefore extremely interesting to learn that measures of trust vary greatly from country to country. In one survey,[viii] an aggregate measure of trustworthiness ranged from a low 3% in Brazil to 65% in Norway. In a ranking of some 42 countries, Australia came in 8th position just ahead of India, Switzerland and the USA (see Figure 1 in Zak[ix]). It is possible to measure other social and economic indicators in the same countries and determine how these correlate with trust. The data suggest that low aggregate trust is correlated with low levels of investment and with poverty. Zak also claims that governments can increase aggregate trust by adopting policies which promote education, civil liberties and communication and which decrease income inequality.


This conclusion is supported by a just-published, ground-breaking book which reviews 30 years of research into the adverse effect of income inequality on almost all social indicators. The title says it all – Spirit Level: Why More Equal Societies Almost Always Do Better.[x] It does not matter if the average per capita GDP (the de facto measure of wellbeing in neoclassical economics) is very low or very high. It is the gap between rich and poor that is important.[xi] The effect appears to cross cultures because countries as diverse as Indonesia, Vietnam, Finland and Japan all have better indicators than the UK and USA. The rich in more equal countries are happier than the more rich in less equal countries.[xii] The evidence obliges us to turn the trickle-down-effect on its head – the rich enjoy a better life by increasing the income of the poor.


The differences revealed, even between rich market democracies, are striking. Almost every modern social and environmental problem – poor physical health, mental illness, lack of community life, violence, drug abuse, obesity, long working hours, school dropout rates, imprisonment, violence and teenage pregnancies – is worse in a less equal society.[xiii] As with the Zak study, trust and cooperation are found to decline with increasing inequality and the authors suggest that low trust is a key factor because low trust/high stress leads to many of the other poor outcomes. Ultimately the Spirit Level is an optimistic book. The good news is that it is easily within the ability of governments to manage levels of inequality and therefore levels of trust. Many of the other social problems respond accordingly, without requiring the expensive remedial programs that attempt to correct the negative effects of high inequality. To this extent, the early socialists and George Orwell had an accurate intuition – increasing material equality helps to solve many apparently difficult social problems.


In the end much of this is common sense, but somehow it has been ignored by governments around the world bent on promoting the neoliberal agenda. In particular, it is worth noting the negative consequences of deregulating markets. Neoliberals claim that regulation warps the efficiency advantages of a truely free market. However the efficiency of a market is also dependent on trust among its participants. Deregulation combined with a lack of trader ethics eventually destroys a market because dishonest behavior begins to dominate.


This is illustrated by an interesting experiment with a group of chimpanzees.[xiv]  The object was to determine if chimpanzees could learn to trade using money. Chimps in the wild trade services with one another but not, as in this experiment, goods for goods with money as an intermediary. The results demonstrated that the animals could learn to trade using simple tokens as a currency convertible into snacks – but only as long as a human referee remained to keep the trading honest. In the absence of human supervision, trades started going sour because the chimps did not always return tokens proffered by their peers. "Lack of trust," trouble communicating and difficulty with mental scorekeeping were three explanations suggested for the breakdown in chimp trade. However another conclusion that one might draw from this experiment is that a market can be made to function adequately even if the participants have poor ethics, as long as it is well regulated. It would be interesting to repeat the same experiment with bonobos.


Contemporary economic theory places much stress on free market competition to achieve efficiency. Justification for the role of competition comes from biological theories of evolution which stress survival of the fittest. We now know much more about our closest primate cousins and have discovered that competition is only half the story. Some primates have a sense of fair play and an innate capacity for cooperative behavior. The evidence points to humans also having a genetic and physiological predisposition to cooperation and, given the will, businesses and governments can foster that predisposition to promote a cooperative economy. Far from being weaknesses, trust and cooperation are economic strengths.


The more we understand human cooperation and how to strengthen cooperation, honesty and trust, the more economically successful our society becomes.[xv]


The Ethics of Cooperation


The essence of the utopian argument (and of its naivety) is that a better society can be created without sustained individual and collective effort. It contrasts starkly with the pessimistic argument currently pervading crisis ridden capitalist societies which asserts that, no matter how humans struggle to create a better society, they will always be brought down by greed and selfishness. Both arguments are dangerous, the former because it does not accord with reality, the latter because it engenders hopelessness. Our vision of a cooperative society must not fall into either trap. Human beings have many potentialities from crude to subtle, from selfish to altruistic. It is of paramount importance to understand the science behind all these potentialities and to encourage the subtle and restrain the crude.


We have seen that a cooperative society must be built on trust and empathy because these are required to sustain cooperative relationships. It is extremely difficult to establish trust and empathy in a culture which actively encourages self-interest and large inequalities of wealth. On the other hand, a cooperative society can be built where there is some rational effort both by individuals to deal with personal selfishness and by society as a whole to promote social equality. To the extent that traditional socialists turn their backs on individual morality and conservatives refuse to acknowledge egalitarian struggle, the more difficult it becomes to establish a cooperative society. In this section, we deal with ethical struggle and in the next, with the egalitarian struggle.


Sarkar promotes two complementary ethical systems, cardinal human values and neo-ethics. They are discussed in turn.


Cardinal Human Principles


Sarkar places much importance on a high standard of morality in individual and collective life. Cooperative businesses require not just honest directors and managers but also a state administration that is run by honest public servants and politicians.[xvi] In other words, morality is the sine qua non of a cooperative society. A commonly accepted set of moral principles is required but here we come up against an obstacle. Conservatives are inclined to seek moral guidance from religious scripture and, in the worst case, impose dogmas which repel the rational mind. Traditional socialists, not wishing to submit to religious dogma, tend to reject all moral principles as relative. So what kind of moral code is required to sustain a cooperative society and how can one promote it? Sarkar argues for the concept of cardinal human values, values that go beyond any one culture or religion.


It is interesting to note the emergence of various international courts of law, driven by a gradual recognition that cardinal human values must take priority over local culture and custom. True, only the worst violations, such as crimes against humanity, reach the international courts today and admittedly often for political reasons, but nevertheless the gradual emergence of an internationally accepted set of moral values is of tremendous importance. Acts of violence, deception and theft perpetrated on innocent people cannot be justified in the national interest. By logical extension to individuals, acts of violence, deception and theft for personal gain are also morally reprehensible. Most cultures around the world accept these as moral principles – indeed it is hard to imagine a sustainable society without them.


Sarkar promotes a set of ten principles that encapsulate cardinal human values.[xvii] The first three are concerned with the avoidance of violence, deceitfulness and theft as described above. To act according to cardinal principles of morality, says Sarkar, is virtue and to act against them is sin. The central idea in virtue is "to serve the collective interest, to accelerate the speed of the collective body…" To retard the speed of the collective body is sin.[xviii] Note that the ‘speed of the collective body’ to which Sarkar refers is the collective movement from crude to subtle encapsulated in his definition of progress. Virtue and sin, good and bad, are therefore defined by reference to collective social progress and not in terms of prevailing religious ideas.


The cardinal human principles have five important characteristics: 1) they are a natural system of morality in the sense that, without them, the natural developmental sequence of expansion and subtlification of mind cannot occur; 2) they are not ends in themselves but the means to individual and collective progress; 3) in particular they provide the necessary foundation for spiritual development; 4) their practice builds trust and therefore the quality of cooperation in society; 5) they are egalitarian because they are of benefit to all – their practice, by definition, excludes group or class interest.


Of the ten principles, one is of particular importance because it encapsulates the others: non-objectification.[xix] Objectification is the use of people (or indeed anything animate and inanimate) as objects for one’s own purposes without regard for their well-being. Exploitation is defined in a similar way.[xx] This principle appears in Neohumanism as the distinction between utility value and existential value. To recognize the existential value of a person is to recognize that their joys and sorrows are as important to them as my joys and sorrows are to me. We may therefore describe non-objectification as the empathic principle. It requires an ability to put oneself into the mind of another – to expand one’s consciousness beyond its limited ego boundary.[xxi]


Environmentalism infused with the empathic principle becomes deep ecology,[xxii] whose significant feature is to acknowledge the existential value of the natural world in addition to its utility value for humans. Social capital is defined in terms of the trust and empathy inherent in social relationships. It is now clear that the building of social capital acquires a moral imperative.[xxiii]


The practical translation of ethical principles into good social outcomes is performed by a society’s legal system.[xxiv] The law defines crime and the corresponding punishments. The larger the gap between crime and sin (the latter defined as that which impedes social progress), the more problems a society will face. Put another way, social progress depends on reducing the gap between morality and legality. Of course differences in climate and local circumstances

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