Why are humans such a cooperative species, and what does the answer to this question mean for our understanding of the organization of modern firms and societies? As a species, we are surprisingly good at sustaining cooperation, even on a large-scale and among relative strangers. This poses an interesting puzzle both for evolutionary and economic theory, where the baseline models assume that behaviors must be understood in terms of how they further agents’ self-interest. These baseline models are difficult to square with cooperative behaviors in general, and with the empirical evidence about the specific nature of human cooperation in particular. This has led to a rapidly growing ‘naturalistic’ literature at the intersection of the biological, behavioral, and social sciences that aims to solve the theoretical puzzle posed by our cooperative behaviors.

What this literature suggests is that humans are social animals that evolved cooperative dispositions over a long history of living in egalitarian small scale societies in which culturally transmitted norms and institutions favored cooperation. As a result of this evolution, our behaviors are affected by a number of things that fly in the face of standard economic assumptions about human behavior, including other-regarding preferences, the important role of social norms, and our sensibility to relative, as opposed to absolute, pay-offs. In fact, the empirical evidence suggests that the majority among us does not at all resemble the Homo economicus relentlessly pursuing his self-interest featuring in standard economic models – although, interestingly, it also suggests that a non-negligible minority does. The task of human organization is to sustain cooperation in the face of this motivational heterogeneity.

The fact that most of us are much more concerned with the social, as opposed to merely economic nature of our relations with others makes cooperation much easier to sustain than one would expect on the basis of the standard assumptions of economic theory. Nevertheless, the advantages of cooperation are easily undermined by competition within a cooperative group. The fundamental problem that human organizations need to solve is that cooperative behaviors are seldom in the self-interest of individual group members. Our long evolutionary history of gene-culture co-evolution endowed us with a social psychology that made our ancestors relatively successful at solving this problem in small scale egalitarian societies with little coercion and much autonomy. But how does their success translate to sustaining cooperation on the much large scale of modern forms of organization with their deep hierarchies?

Our central argument is that the emerging understanding of our cooperative dispositions suggests a general theory of human economic organization that also has implications for our understanding of modern forms of organization. More specifically, we derive ten principles for a naturalistic theory of human economic organization. For instance, organizations compete with each other on their ability to channel intra-organizational competition in ways that increase their success in inter-organizational competition. Because genetic evolution proceeds at a much slower pace than cultural evolution, the success of modern organizations depends on their ability to use cultural ‘work-arounds’ that make productive use of tribal instincts that originally evolved to sustain cooperation on a much smaller scale. However, given the nature of these tribal instincts, cooperative arrangements on a large scale do not necessarily lead to ethically desirable outcomes. In particular, our evolutionary heritage leads to the prediction that the two major ethical problems of human organization are intra-group exploitation of group members by their leaders and inter-group hostility.


Read the paper: Stoelhorst, J. W., & Richerson, P. J. (2013). A Naturalistic Theory of Economic Organizations.

Published On: July 3, 2013

One Comment

  • Ted Howard says:

    While I align with much of what is written, there are several areas that appear to me to be errors in your paper.

    You write : “By itself, the workhorse of a naturalistic approach, the Darwinian variation-selection-retention algorithm (cf. Campbell, 1965; Stoelhorst, 2008), cannot explain the emergence of cooperative behaviors in nature.”  This statement is not entirely true.  And I admit that it is all a matter of perspective and interpretation.

    While you mention Axlerod and others in the following paragraph, you draw a distinction between the ideas that doesn’t need to be there.  To my understanding, all of the ideas of kin selection etc were implicit in Darwin’s work, but had not been made explicit.

    Richard Dawkins in his 1976 classic work “The Selfish Gene”, explains in chapter 10 the games theory requirement for cooperation to be stable, and mentions Axlerod’s early work with computer tournaments.
    Cooperation can evolve, it just needs attendent strategies to staibilise it.

    Indeed, each new level of evolved complexity in life is characterised by new levels of cooperation.

    Without cooperation, life would still consist of RNA molecules in the ocean.
    Cooperation allows RNAs to work together to produce proteins. 
    Then RNAs and proteins to produce lipids, leading to cells. 
    Then groups of procaryotic cells to cooperate to produce eukaryotic cells. 
    The groups of eukaryotic cells cooperate to form multicellular organisms, with ever increasing specialisation of different cell lines with in the organism, leading to the development of circulatory systems, guts, eyes, nerves, limbs, etc.
    Then groups of organisms working together is social groups.
    Now with humans, we have ever more complex sets of mimetic (behavioural) forms of cooperation, from kin groups right on up through many levels to global groups.
    Cooperation is a fundamental component of new levels of biological complexity and organisation.

    You state “Kinselection cannot explain that human cooperation extends to individuals that are not genetically related” which again is not entirely true.
    If human beings did, for the most part, live in kin groups, then any behaviours that favoured cooperation could be select for on the basis of kin selection (because all groups were in fact kin).

    As humans collected into larger non-kin groups, and provided there was no strong pressure against it, these cooperative behaviours could persist, provided they provided benefits at least as strong and any costs.
    If humans were in kin groups (as seems highly probable), then there need not have been any pressure in the evolution of cooperative mechanisms for the individuals to be able to identify kin, as there were only kin around.
    This can be a big factor in an explanation.

    I agree with your thesis that the reality of human evolution is a mixture of genetic and cultural (mimetic) influences.
    The reality is extremely complex.

    Your explanation in Principle 2 page 4 goes some way towards highlighing some of those complexities, and there are many more.
    Which pressure comes to dominate in any individual mind is the result of the specific pressures on that entity, and the contexts available to that mind.
    Thus tendencies toward any particular set of behaviours varies greatly with time and circumstances.  It is a multivariant issue over multiple dimensions, including, time, space, resource availability, and current group dynamics (to name just a few).

    It seems clear to me that this tension is most powerfully resolved by creating contexts that promote the contemplation of self interest in the longest possible time-frames (which necessitates life extension technologies).

    While I acknowledge the reality of the numbers stated in relation to Types in principle 3, it seems dangerous and unsubstantiated to me to regard these as any
    sort of genetically fixed type.  It seems to me that all people can exhibit all types of behaviours, and do so in different contexts.  It seems to me that it is the contexts available in society, rather than and sort of genetic typing of people, that create the distributions reported.  And certainly, people have a strong habitual component, and repetition of particular behaviours in particular contexts can create a predisposition to carry those behaviours to other contexts that are similar in some recognisable way to that individual.
    Thus creating contexts that can be distinctly recognised is fundamental to changing behaviours at the larger scale.


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