Тег: Cooperation

How cooperation between members of different groups arises

Voluntarist, Bitarch

It is generally believed that purely human phenomena, such as culture, traditions, and social norms, are necessary to make cooperation between different societies possible. At the same time, animals that lack such phenomena are typically considered social only in relation to their own group and hostile toward members of other groups. Of course, the importance of these phenomena should not be underestimated, but they may well be unnecessary for the emergence of cooperation between groups.

As demonstrated by research on pygmy chimpanzees, or bonobos—humans’ closest genetic relatives—they exhibit high levels of tolerance between members of different groups. They can travel, rest, and feed together. Resource exchange between groups is not uncommon among bonobos. Moreover, it has been noted that individuals who exhibited more pro-social behavior within their own group were also more pro-social toward members of other groups. At the same time, such cooperation does not arise under the influence of any culture or social norms. One could say that this is simply a natural state for bonobos.

It is also worth comparing bonobos with common chimpanzees. The latter are quite hostile to strangers; in their case, intergroup clashes can even end in lethal violence. Why does such a difference arise? If one compares the neurophysiology of common and pygmy chimpanzees, the latter are found to have twice the density of serotonergic neurons in the amygdala of the brain. Additionally, it is worth noting the relationship regarding aggression between serotonin, oxytocin (a hormone that promotes only intra-group pro-sociality, or so-called parochial altruism), and testosterone (a sex hormone). Common chimpanzees exhibit high testosterone reactivity, which reduces their tolerance and provokes a drive to fight for higher status. And as is known from studies, the function of the serotonergic system (which is more pronounced in bonobos) includes inhibiting the pro-aggressive influence of testosterone. Pro-sociality is also stimulated by oxytocin, and it should be noted that the serotonergic system can exert an influence on its release.

It should also not be forgotten that cooperative-communicative skills, which emerged in the early stages of human evolution, were key to the emergence of various forms of human cultural cognition, including language. Therefore, it is entirely possible to assume that pro-sociality and cooperation arise not simply because of culture. Rather, all these phenomena have common evolutionary roots. The basis for their emergence may well be the development of a violence inhibition mechanism and the strengthening of serotonergic function during evolution. Such adaptation is necessary for peaceful coexistence and the prevention of lethal violence, which in many circumstances is extremely detrimental to the entire population. Furthermore, the observation of such adaptation in an extremely strong form in bonobos indicates that “constant wars between neighboring groups are not necessarily a legacy of humanity and do not seem evolutionarily inevitable.”

Among the left, there is a certain prevalence of the idea that rights to the so-called means of production should belong to the workers

Imagine an economy where the property of all or most enterprises producing goods and providing services is under the shared ownership of the workers, who gain and lose it upon joining or leaving the collective, decisions are made through the expression of the workers’ will,
and the net profit of the enterprise is divided equally among everyone.

Please provide a critique of such a model. How should one respond to opponents proposing this model? What points should be highlighted? Thank you.

анонимный вопрос

Before imagining an economy consisting entirely of such enterprises, it makes sense to look at how they might form within a regular economy where ownership of the means of production exists.

So, there is a group of people who want to implement a certain idea and intend to start a business. They need a set of competent workers for several different positions, as well as startup capital. Presumably, the workers are there—they are the founders themselves. Where do they get the capital? In a modern economy, they can chip in in certain proportions, and each will receive a share in the founding enterprise corresponding to the amount contributed. Within the proposed model, shares are strictly equal, meaning they must contribute strictly equal amounts, which reduces the system’s flexibility, as a potentially valuable worker might not have enough savings to join the enterprise, or may not be willing to risk them. When the functions of capitalist and worker are separated, this is not a problem. When they are forcibly combined, not everyone can handle it.

What are the alternatives to chipping in equally? One could take a loan from a credit institution. But for a bare idea, a loan will only be granted at serious interest rates. These could be lowered by providing collateral, but the conditions of the problem assume no collateral, and it is impossible to pledge the shares of the future enterprise, because the enterprise must remain in equal shared ownership of the workers, not some capitalists.

But fine, let’s assume a group of people chipped in a very small amount, opened a micro-business, and gradually grew it by investing most of the profits into expanding production—and now they start lacking manpower. They need to hire someone else and allocate an equal share to them, proportionally reducing the shares of each founder. The larger the starting contribution was, the longer they had to deny themselves the basics to get the enterprise running—the harder it will be to make the decision to simply give away an equal share for free. If they intend to hire a highly valuable specialist, the founders will think it over and decide it’s worth it. But with equal probability, it could be about hiring someone with low qualifications. For example, production has grown, delivering to customers independently is no longer convenient, and a courier is needed. And this courier, a position that literally any random person could handle, becomes an equal shareholder in a successful startup? It is not hard to see that old workers will face such psychological problems every time a new vacancy opens.

Similar difficulties await the person who was there at the start, invested a lot of effort into the enterprise, and now, for one reason or another, would like to leave. They realize that they have no way to monetize their share, and all their merits toward the company are wiped out the second they quit. They must now look for a new place and persuade a new collective to take them as a shareholder. Obviously, under the conditions of a well-functioning institution of reputation, a person who was in good standing in one company will be able to find a place in another without problems, but still, relying on the hope of obtaining a share in a more productive enterprise instead of the individual value of one’s labor is not such a flexible scheme.

The real nightmare begins if, due to changes in market conditions or other reasons, it becomes necessary to reduce staff; otherwise, the company will start incurring losses. That’s it, a scandal is guaranteed. Everyone accuses everyone else of causing the company’s situation to worsen, no one is ready to jump overboard and lose their share, but without this, instead of a regular share of profit, all shareholders must instead regularly contribute to a loss-making enterprise in equal shares. It remains unclear exactly how to decide who to throw out. In a regular company, the management makes the decision based on production necessity. But here, everyone is a shareholder, and everyone has a vote. That is, it will have to be decided democratically at a general meeting, and it may very well turn out that it is not the least necessary employees who have to leave, but the least eloquent.

Thus, such enterprises lose to companies without socialist burdens on labor relations in terms of flexibility, and therefore, they will likely fall behind in the competitive race. In essence, nothing prevents anyone from opening enterprises of this type right now in countries without labor codes, like Georgia. But practice shows that few people need this. Even if people unite in an artel or cooperative, they still prefer to retain the right to a share in the company, and upon leaving, they demand their share in money or equipment, and when accepting a new member, they find it justified to require an entrance fee—again, in monetary or in-kind form.

In essence, the entire toolkit of market manipulations with shares is precisely an additional expansion of possibilities over the limited functionality of equal shared conditional ownership, and if it was evolutionarily developed in the course of humanity’s economic progress, it would be very strange to abandon it on a mass scale. But to each their own; anyone who wishes can start working according to this scheme as early as tomorrow.

So, is it a completely unviable scheme? Not at all. Caribbean pirates operated on almost these very principles. You can read more about this in the recently translated chapter of David Friedman’s book on legal systems that differ greatly from ours. In essence, the only difference between the pirate scheme and the proposed socialist one was that the pirates did choose leadership for themselves and paid them not an equal share of the loot, but an increased one. Pirates were also helped by the fact that the problem of startup capital was not so acute for them: they did not build ships, they captured them. But socialists, in fact, can quite well envision their system as the expropriation of existing enterprises from owners in favor of workers, so they can be just as successful as sea robbers.

Thus, it can be stated that within the framework of relatively simple economic activity, and especially in resource economies with low capital intensity, the socialist scheme can quite well take root, but the more serious the division of labor, the more difficult it will be to adapt it to the needs of the collective members, and the closer it will in fact resemble a regular market scheme with private ownership of the means of production.

When is the tragedy of the commons a good thing?

In the script for the video about the free-rider problem and the tragedy of the commons, I emphasized how bad this is for users of a shared resource and what strategies have been developed to combat it. Now, I want to talk about a case where the tragedy of the commons is actually a good thing, and fighting it is bad.

The entire focus is on what exactly constitutes the shared resource. Imagine a rare resource such as consumer demand. Everyone has the opportunity to produce a certain good or service, sell it, and make a profit. While the market is empty, a few producers will make superprofits, and the thirst for gain will attract many other suppliers to this patch. Competition for the consumer’s attention quickly leads to a decrease in margins. To maintain profit, volumes must be increased, and this finally exhausts the shared resource. The consumer receives an enormous abundance of cheap goods, which they are ready to push in the greatest possible quantity, as long as the consumer is willing to buy. Here is a “buy one get one free” promotion, here is an installment plan, here is a sale, here is unlimited access for a fixed subscription—just buy it.

Admit it, if you put yourself in the consumer’s shoes, this phenomenon cannot help but be pleasing. But the producer, for whom this is a terrible tragedy of the commons, tries to fight it. As we know from the video, two strategies are possible here: privatization and cooperation.

Privatization means the appropriation of consumer demand in a certain industry by a specific producer—in other words, the creation of a monopoly. Other suppliers are forbidden from selling certain goods and services to consumers. That’s it; now there is no need to chase sales volumes, and superprofits can be earned with fairly modest investments in production. However, part of the profit will have to be invested in protection against competitors, and they are not idling, so these costs will tend to increase.

Cooperation means that anyone can satisfy consumer demand, but a number of restrictions are imposed upon it. This is usually expressed in strict industry standards that effectively secure the dominant position of those players who are ready to invest significant capital into production, while outsiders are filtered out. However, a lot of attention must be paid to controlling that producers do not cheat. In this regard, a recent case comes to mind with some European auto concern that faked data on the exhaust emissions of its engines to save money on complying with environmental standards. But the classic example is, of course, medieval guilds. The quality of their goods was high, production volume was low, and profits were magnificent. Only the black market eventually undermined their dominant position, and a tragedy of the commons occurred, which we know as the Industrial Revolution.

So, when you are told about the harm of competition and the benefits of cooperation, as well as the inevitability of natural monopolies, it is important to understand: these people are quite sincere and not fools at all. It’s just that you are a resource to them.

A Christmas market is a tragedy of the commons in all its glory: consumers are happy, they are lured in with all their might, and they look more than they buy