The Cooperation Economy

“Putting the world on more ecologically sustainable foundations requires a recasting of the global economic order. People and the planet need to be valued as explicitly today as profit and economic gain have been in the past…. Basic notions of progress, development, and prosperity will need to be recast in far more holistic terms.”i

It should be clear to any objective observer that the present world economy is largely disfunctional, threatening the future of the planet, and not meeting the needs of the majority of humanity. But is there any reasonable alternative? How do we diagnose the illness and search for a remedy? Can there be a higher purpose for individuals than being passive consumers, and for the economy than creating wealth for the wealthy? What is, and could be, the role of business?

To elevate business and the economy, we must question their basic assumptions. Are we really inherently selfish, aggressive and competitive? What difference would it make if companies cooperated rather than competed? That is the theme of this essay.

Diagnosis of the problem

Jeffrey Sachs provided a significant summary of the origin of the economic values that are at the heart of modern economic thinking and practice.

“As Britain became an imperial power, and then the world’s leading power of the 19th century, British philosophy changed to justify Britain’s emerging empire. British philosophers championed a powerful state (Thomas Hobbes’ Leviathan), the protection of private wealth over redistribution (John Locke’s right to “life, liberty, and property”), markets over government (Adam Smith’s “Invisible Hand”), and the futility of aiding the poor (Malthus’ law of population). When humanitarian crises arose in the British empire, such as the Irish famine in the 1840s and the famines in India later in the century, Britain rejected providing food aid and left millions of its subjects to starve, even though food supplies were available to save them. The inaction was in line with a laissez-faire philosophy that viewed poverty as inevitable and help for the poor as morally unnecessary and practically futile.”ii

With such a focus on the individual in the pursuit of wealth, and the nineteenth century understanding of the survival of the fittest in nature, competition became the dominant economic paradigm, with winners and losers as the perfect actors emerged through the objective forces of the market to bring success and economic stability.

The fact that half the world population today still struggles to meet basic necessities despite all the wealth created by economic activity shows that something is fundamentally wrong. “The time has come when those who preach the dogmas of materialism, whether of the east or of the west, whether of capitalism or socialism, must give account of the moral stewardship they have presumed to exercise. Where is the "new world" promised by these ideologies?”iii

It may help to review some of the examples of injustice in the present economic system. It is founded on greed, as expressed in the desire for endless profit, endless growth, endless wealth, and endless power. Everything deemed of value is monetised, and what cannot be monetised is ignored. For corporations, the primary institutional structure for business activities, the only legal obligation in their charter is profits for the shareholders, or what is called fiduciary responsibility. In the economic system, values are set by the market, or by monopolies, excluding the poor who cannot pay. Progress is measured by the flow of money through the system, or GDP, regardless of whether it contributes to human well-being.

With such corporate values, it seems normal for corporations to ignore their impacts on the global system or human health. With a narrowly defined material purpose to increase wealth and power, pursued through short-term profit, the end often justifies any means. Whole industries contribute to the economy through the manufacture of arms and weapons, profiting from war and preparations for war and destruction. Others are devoted to producing products that increase sales by using addictive drugs or chemicals, such as caffeine, nicotine, narcotics, and alcohol, with serious impacts on human health. Other examples are industries profiting from violence and sex entertainment, or gambling. Today we see the emergence of addictive technologies, carefully designed to trap consumers and extract wealth. All of this is supported by intensive advertising and consumer marketing.

A consequence of such a definition of purpose is what could be considered moral failures in business. It is common to use transfer pricing, “creative” accounting, and offshore tax havens to escape from taxation, which normally supports the public good. Organized crime and corruption are widespread. Corporate leaders and bankers feel entitled to exorbitant salaries and bonuses. There is frequent corporate funding of disinformation, as with the fossil fuel companies consistent denial of climate change. Powerful lobbies influence “democratic” processes through their wealth and access to political leaders. “Injustice is tolerated with indifference and disproportionate gain is regarded as the emblem of success.”iv

As the Bahá’í International Community has put it: “...economic growth over recent decades has indisputably brought about prosperity for many, but with that growth unmoored from justice and equity, a few have disproportionately benefited from its fruits and many are in precarious conditions. Those living in poverty are at the greatest risk from any contraction of the world economy, which exacerbates existing inequalities and intensifies suffering.”v

One result is the endless attractions of our consumer culture. Materialism's vision of human progress has produced today's consumer culture with its ephemeral goals. For the small minority of people who can afford them, the benefits it offers are immediate. The breakdown of traditional morality has led to the triumph of animal impulses and hedonism. Selfishness has become a prized commercial resource; falsehood reinvents itself as public information; greed, lust, indolence, pride, violence are broadly accepted and have social and economic value.vi “Consumerism continues to act as opium to the human soul.”vii

As a result, we face growing challenges in this century. Many of the dominant currents in societies everywhere are pushing people apart, not drawing them together. These include exorbitant wealth, intransigence in thinking, religious fundamentalism, a decline in public trust. vested interests seeking to undermine the credibility of all sources of knowledge, and resurgent forces of racism, nationalism, and factionalism.viii “None can anticipate precisely what course the forces of disintegration are destined to take, what violent convulsions will yet assail humanity in this travailing age, or what obstacles and opportunities may arise.ix

As UN Secretary-General Antonio Guterres put it to General Assembly on priorities for 2023, he warned about “a confluence of challenges unlike any other in our lifetimes. Wars grind on. The climate crisis burns on. Extreme wealth and extreme poverty rage on. The gulf between the haves and have nots is cleaving societies, countries and our wider world. Epic geopolitical divisions are undermining global solidarity and trust. This path is a dead end.” He called this deeply irresponsible and immoral.

The cooperation alternative

If competition has led to such unsatisfactory results, it seems reasonable to consider its opposite, cooperation, and to ask if a cooperation economy might be able to change things. Can it even increase economic productivity and human well-being? Perhaps complex systems science can give us a more objective understanding of economic potentials. For example, from a systems perspective, we can explore how cooperation and reciprocity are more productive than competition. So what values are needed to accompany such a fundamental transition?

“Cooperation is the principle that governs the functioning of [a] system. Civilization [can] be seen as the outcome of a set of interactions among closely integrated, diverse components which have transcended the narrow purpose of tending to their own existence.”x

As the Bahá’í writings put it: “The supreme need of humanity is cooperation and reciprocity. The stronger the ties of fellowship and solidarity amongst men, the greater will be the power of constructiveness and accomplishment in all the planes of human activity.”xi

“The individual, the community, and the institutions of society... have been locked in a struggle for power throughout time. ...the assumption that relations among them will inevitably conform to the dictates of competition, a notion that ignores the extraordinary potential of the human spirit, has been set aside in favour of the more likely premise that their harmonious interactions can foster a civilization befitting a mature humanity.”xii

Complex Systems Science

Complex systems science can demonstrate the advantages of cooperation. It shows that many components with many types of interaction between them and with their environment can develop non-linear relationships and produce emergent properties, with collective or system-wide behaviours for efficiency. Such systems can have critical transitions or tipping points, which can be called punctuated equilibria, with stability followed by a sudden transition to a new level of organisation. Such systems can be nested at multiple levels, with systems within systems, each efficient at its own level.

In an efficient system, all the component elements are in a dynamic state of balance, with each component receiving it optimal share of benefits, and performing its service or role efficiently. There is no leadership or hierarchy, but a tendency to increasing complexity and higher total productivity, with the potential for emergent properties and higher levels of relationships.

An excellent example from my own work is the coral reef ecosystem, with thousands of species, demonstrating the efficient capture of solar energy, and efficient transfers within the system based on many symbioses between plants and animals. Everything is based on cooperation and reciprocity, with few losses and efficient recycling, producing high complexity and integration that maximizes total productivity of the system beyond the contribution of every individual component.

Diversity is the dynamic driver for greater systems complexity, integration, efficiency and resilience. Through long processes of evolution, and both individual and group selection, interactions are selected for that enhance the interrelationships beneficial for all concerned. The greater the number of potential interactions among diverse entities, the greater the capacity of the system to evolve higher levels of complexity.

The Institute for the Study of Global Prosperity has summarised this systems perspective. “Much like the human body, the interdependent body of humanity is composed of diverse elements whose well-being can only be achieved through integration and coordination. No cell or organ lives apart from the human body, and the well-being of each derives from the well-being of the whole. At the same time, it is the unity and interdependence of the body’s diverse cells and organs that permits the full realization of the distinctive capacities inherent in each. The organic unity suggested by this analogy does not imply uniformity. On the contrary, the diversity of the component parts of an organic body permits the full realization of its collective capacity. Within human societies, diversity is a source of inspiration, creativity, productivity, resilience, innovation, and adaptation. Only when diverse segments of society are able to contribute appropriately to the governance of human affairs, within a framework characterized by unity and integration, will real prosperity and well-being be achieved.”xiii

One feature of systems is how they are defined and directed by information in its various forms. Systems depend on knowledge or information, created through learning, preserved through recording in chemical structures, DNA, or at the human level in science, laws and institutions, and communicated throughout the dynamic evolving system. This raises the question of the privatising of information. If the knowledge and information that define the system are privatised for profit, this creates a monopoly position, allowing the owner to out-compete others. Such intellectual property restricts access only to the wealthy, who can afford to buy it. But knowledge and information increase in value the more they are shared. Science, art, culture do not have limits and can grow forever. Privatising information for competitive advantage is highly inefficient from a systems perspective. The aim of innovation and creation should be to benefit everyone, being of service to the whole system. There are other ways to acknowledge and reward creativity.

There are questions that systems science can address to the economy. What is important in a complex system is not just the number of different entities and their distinct qualities, but how they interact. Will they simply fight until one comes out the winner? Or do they have a common purpose, with complementary functions, each contributing to the well-being and productivity of the whole? How do they communicate and share information? Is the system more than the sum of the parts? Has it evolved higher levels of complexity and efficiency?

The Concentration of Wealth

“...the concentration of material wealth in the hands of a minority of the world’s population gives an indication of how fundamentally ill-conceived are relationships among the many sectors of what is now an emerging global community.”xiv “...time and again, avarice and self-interest prevail at the expense of the common good. Unconscionable quantities of wealth are being amassed, and the instability this creates is made worse by how income and opportunity are spread so unevenly both between nations and within nations.”xv

“...the end does not serve to justify the means. However constructive and noble the goal,... it must not be attained through improper means. Regrettably, a number of today's leaders--political, social, and religious--as well as some of the directors of financial markets, executives of multinational corporations, chiefs of commerce and industry, and ordinary people who succumb to social pressure and ignore the call of their conscience... justify any means in order to achieve their goals.” “...certain approaches to obtaining wealth--so many of which involve the exploitation of others, the monopolization and manipulation of markets, and the production of goods that promote violence and immorality--are unworthy and unacceptable.”xvi

The characteristics of a Cooperation Economy

Eric Beinhocker, in The Origin of Wealth, has defined complexity economics in the following terms. There is no equilibrium or perfect actors, but constantly evolving networks of agents and business plans. These are in a punctuated equilibrium, with stability followed by rapid change. This requires consultation, not competition, to avoid crises and bubbles. True wealth is information and knowledge, using entropy to increase carrying capacity, efficiency and complexity. Businesses must balance present efficiency and innovation to prepare for the future, with a culture of learning. We are both self-regarding and altruist, but seek strong reciprocity. We must reduce inequality and favour social cohesion.xvii

A cooperation economy requires a fundamental transformation in society. “...the principle of the oneness of humankind... asks not merely for cooperation among people and nations. It calls for a complete reconceptualization of the relationships that sustain society. [It] implies, then, an organic change in the very structure of society.xviii

Economics has ignored humanity's broader social and spiritual needs, resulting in corrosive materialism among the wealthy, and persistent poverty for masses of the world's peoples. Economic systems should give the peoples and institutions of the world the means to achieve the real purpose of development: the cultivation of the limitless potentialities in human consciousness.xix “Only by ensuring that material progress is consciously connected to spiritual and social progress can the promise of a better world be fulfilled.”xx

We require new values-based economic models. The aim should be a dynamic, just and thriving social order, that is strongly altruistic and cooperative in nature, provides meaningful employment, and helps to eradicate poverty in the world.xxi

“Social justice will be attained only when every member of society enjoys a relative degree of material prosperity and gives due regard to the acquisition of spiritual qualities. The solution, then, to prevailing economic difficulties is to be sought as much in the application of spiritual principles as in the implementation of scientific methods and approaches.”xxii

The acquisition of wealth is acceptable and praiseworthy to the extent that it serves as a means for achieving higher ends: providing people with basic necessities, fostering social progress, promoting the welfare of society, and contributing to the establishment of a world civilization. To make the accumulation of wealth the central purpose of an enterprise is unworthy.”xxiii

Wealth is praiseworthy in the highest degree, if it is acquired... in commerce, agriculture, crafts and industry, if the measures adopted... in generating wealth serve to enrich the generality of the people, and if the wealth thus obtained is expended for philanthropic purposes and the promotion of knowledge, for the establishment of schools and industry and the advancement of education, and in general for the welfare of society.xxiv

Other preconditions to the legitimate acquisition of wealth must be taken into account, and prevailing norms reassessed in their light, including the relationship between minimum wage and the cost of living, especially in light of the contribution workers make to a company's success and their entitlement to a fair share of the profits; the wide margin, often unjustifiable, between the production costs of certain goods and the price at which they are sold; and the question of the generation of wealth through measures that enrich the generality of the people.xxv

The Bahá’í writings also provide clear guidance on the level of executive salaries in the advice given to the Sultan of Turkey on what he should pay his ministers: “Overstep not the bounds of moderation, and deal justly with them that serve thee. Bestow upon them according to their needs, and not to the extent that will enable them to lay up riches for themselves, to deck their persons, to embellish their homes, to acquire the things that are of no benefit to them, and to be numbered with the extravagant. Deal with them with undeviating justice, so that none among them may either suffer want, or be pampered with luxuries.”xxvi

“[T]he nobility inherent to every human being… is a fundamental tenet… upon which hope for the future of humankind is built. Economic life is an arena for the expression of honesty, integrity, trustworthiness, generosity, and other qualities of the spirit. The individual is not merely a self-interested economic unit, striving to claim an ever-greater share of the world's material resources.”xxvii

There is also direct advice on business behaviour and monopolies (trusts): “...the owners of properties, mines and factories should share their incomes with their employees and give a fairly certain percentage of their products to their workingmen in order that the employees may receive, beside their wages, some of the general income of the factory....” “No more trusts will remain in the future. The question of the trusts will be wiped away entirely…. Laws must be made because it is impossible for the laborers to be satisfied with the present system…. Finally, the capitalists will lose.”xxviii

“Collective prosperity can be advanced through justice and generosity, collaboration and mutual assistance.” “Every choice one makes—as employee or employer, producer or consumer, borrower or lender, benefactor or beneficiary—leaves a trace, and the moral duty to lead a coherent life demands that one's economic decisions be in accordance with lofty ideals, that the purity of one's aims be matched by the purity of one's actions to fulfil those aims.xxix

A Just Civilisation

The result of all this can be a Just Civilisation. This requires coherent societies that depend on moral and ethical values. It will make it possible to achieve our true purpose and spiritual potential, maximising love and selfless service. This will open a whole new dimension of social systems and enable an ever-advancing civilisation. It will require justice with the natural world, integrating human communities into the ecosystems and resources appropriate to each locality. This also means giving business entities a social purpose and responsibilities.

The concepts of systems science are reflected in the whole Bahá’í approach. Bahá’u’lláh’s teachings provide a set of system rules and instructions for learning, building a new level of complexity and well-being in the institutions of a global human society. They transform each individual human from a self-centred individualist wanting immediate physical gratification to a humble, selfless servant building unity out of love, thus enabling emergent properties of integration and cooperation, just as in highly evolved ecosystems.xxx

“The world that beckons is one of integration and balance, beauty, and maturity. It is a world with a redefined sense of progress, filled with communities and individuals working together with the support of institutions toward the realization of their highest aspirations. It is a world increasingly relieved of the destructive moral compromises—social, economic, and environmental—that have so often been asserted as necessary to progress.”xxxi

“As the sweeping tides of consumerism, unfettered consumption, extreme poverty and marginalization recede, they will reveal the human capacities for justice, reciprocity and happiness.”xxxii

i Bahá'í International Community. One Planet, One Habitation: A Bahá’í Perspective on Recasting Humanity's Relationship with the Natural World, 1 June 2022, Rethinking Economic Arrangements
ii Jeffrey D. Sachs, 26 June 2023, The New World Economy, https://www.jeffsachs.org/newspaper-articles/us-politics-and-the-paris-…
iii Universal House of Justice, The Promise of World Peace, 1985, I, p. 7
iv Universal House of Justice, Ridvan 2012
v Bahá’í International Community, A Governance Befitting, 21 September 2020
vi based on Universal House of Justice, One Common Faith, 2005
vii Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
viii based on Universal House of Justice, 18 January 2019
ix Reflections on the First Century of the Formative Age, Universal House of Justice, To the Bahá’ís of the World, 28 November 2023
x Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
xi ‘Abdu’l-Bahá, quoted in Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
xii Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
xiii Institute for the Study of Global Prosperity. 2012. Reflections on Governance, 21 July 2012
xiv Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
xv Universal House of Justice, To the Baha’is of the World, 1 March 2017
xvi Universal House of Justice, To the Believers in the Cradle of the Faith, 2 April 2010
xvii Eric Beinhocker. 2006. The Origin of Wealth
xviii Universal House of Justice, to the Bahá'ís of Iran, 2 March 2013
xix adapted from Bahá'í International Community, Valuing Spirituality in Development, 1998
xx Bahá’í International Community, A Governance Befitting, 21 September 2020
xxi adapted from Bahá'í International Community, Valuing Spirituality in Development, 1998
xxii Universal House of Justice, To the Believers in the Cradle of the Faith, 2 April 2010
xxiii based on Universal House of Justice, To the Believers in the Cradle of the Faith, 2 April 2010
xxiv based on Universal House of Justice, To the Believers in the Cradle of the Faith, 2 April 2010
xxv based on Universal House of Justice, To the Believers in the Cradle of the Faith, 2 April 2010
xxvi Bahá'u'lláh [to the Sultan of Turkey], Gleanings from the Writings of Bahá'u'lláh, CXIV, pp. 235-236
xxvii Universal House of Justice, To the Baha’is of the World, 1 March 2017
xxviii 'Abdu'l-Bahá, Foundations of World Unity, p. 43-44
xxix Universal House of Justice, To the Bahá'ís of the World, 1 March 2017
xxx Dahl, The Eco Principle: Ecology and Economics in Symbiosis, 1996
xxxi Bahá'í International Community. One Planet, One Habitation: A Bahá’í Perspective on Recasting Humanity's Relationship with the Natural World, 1 June 2022, para. 42
xxxii Bahá'í International Community, Rethinking Prosperity: Forging Alternatives to a Culture of Consumerism, 2010