The 1987 film Wall Street is famous for popularising the phrase "Greed is good." Well, it turns out that Gordon Gekko had a pretty good understanding of society, if new scientific research is to be believed. Far from being the root of all evil, money is an essential component to a prospering modern society due to its ability to foster cooperation between strangers.
Photo: 20th Century Fox
The human species has always depended on cooperation for survival. In prehistoric times, this was achieved by banding together in small, close-knit groups.
This is in stark contrast to sprawling modern societies which chiefly comprise of strangers, even within individual communities (how many of you are chummy with your next-door neighbours, eh?) And yet, the species continues to thrive. According to an international research team, this paradigm shift was achieved through the advent of money, which helps modern societies prosper by fostering cooperation between strangers:
Our research suggests that norms of voluntary cooperation are difficult to use in a society of strangers, unless they are mediated by some institution. In the experiment, monetary exchange, one of the most basic economic institutions, emerged endogenously and supported a stable level of cooperation in small as well as large groups.
To test their theory, the researchers devised a series of experiments to examine how money affects human behavior and willingness to cooperate. Participants were tasked with aiding anonymous counterparts, first for no tangible reward and secondly in exchange for tokens.
They found that the introduction of tokens encourages larger groups to cooperate far more readily. In large groups, the frequency of cooperation was 28.5% in the first condition and 51.7% in the Tokens condition when trade was possible; a difference of almost 25 percent.
The researchers believe that their findings demonstrate how the influence of monetary systems extends beyond economic performance and is intrinsic to sustaining cooperation and trust between strangers:
Inherently worthless tokens acted as a catalyst for cooperation, acquiring value because of a self-sustaining belief that they could be exchanged for future cooperation. Trust in others is a bridge between the present and the future. When trust is missing, the exchange of tokens for cooperation acts as a substitute way to link the present to the future.
In other words, money helps to preserve cooperation as groups get larger and less familiar. Proponents of globalisation are sure to be pleased.