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Oxytocin is good for business and prosperity, says author and neuroeconomist

NEW YORK

In their models, economists often invoke the idea of "rational self-interest."

After years of experiments, neuroeconomist Paul Zak says that concept is "bupkes when it comes to real people."

In the lab, Zak has participants play a game in which the only way to make money is to give some of what you have to a stranger. He found consistently high levels of trust and trustworthiness.

What's at the root of this virtuous circle? Oxytocin.

Zak's experiments show that the influence in the bloodstream of oxytocin, long known for its role especially in childbirth and breastfeeding, goes much further.

In The Moral Molecule: The Source of Love and Prosperity, Zak explores oxytocin's larger role in all kinds of human endeavors.

How does oxytocin work?

It's a very short-acting brain chemical that is released, we found, for a variety of stimuli. We discovered when someone trusts you, your brain releases oxytocin and motivates you to reciprocate.

We also found that a variety of moral or prosocial behaviors are stimulated by oxytocin.

What's the connection between oxytocin and morality?

We're hypersocial creatures. Moral behaviors put the other person equal to or above ourselves, while in "sinful" behaviors we put ourselves first. The seven deadly sins separate you from your group, which is nonadaptive for social creatures like us.

We have a very specific mass of oxytocin receptors in the front of the brain that essentially makes it feel good to do good.

How does prosperity fit into this picture?

The original work I did that led me to do these experiments was showing that interpersonal trust levels across countries strongly predicted which countries are rich or poor.

High-trust countries are rich countries, low-trust countries are poor countries. And I built some mathematical models to explain biologically, socially, institutionally where trust comes from, why Norway is very high and Colombia is very low.

Trust is the engine of prosperity?

When trust is high, there are more transactions that create wealth and therefore there's a greater increase in prosperity.

And if you're in a situation in which you are very stressed out, your environment is very uncertain, who do you trust? A very small group.

Greed is not the best strategy?

For social creatures, it's almost never adaptive to have a very short-term strategy, which is to take all the marbles and run.

There are people who do that. About 5 percent of the population we've tested are unconditional nonreciprocators, or as we commonly call them, "bastards."

How would you describe Wall Street?

There is some evidence that there's an overrepresentation of them on Wall Street.

Most economic transactions are win-win. Financial transactions on Wall Street in particular kind of modulate toward a win-lose. That's a very testosterone-driven behavior. And who are most professional traders? Young males.

Testosterone makes you selfish?

The neuroscience of that is if you're making tons of money, your social status goes up and your body produces more testosterone in men and women.

We've shown in experiments that when you administer testosterone to men, they become more selfish and more entitled. The body is responding to the environment, saying: "You won the resource lottery! It's all about you. You have the best genes on the planet. You rock!"

You note that being on top turns people into jerks. Why does that happen?

You can lead two ways. You can lead by fear, testosterone. The problem with fear is that people acclimate very quickly and they give up — it's called learned helplessness. You've got to keep raising the stakes and then people just leave.

Or you can lead by love, oxytocin, and see what happens. There's no evidence that I found in my lab that people acclimate to oxytocin release. The more you do it, the more you lower the threshold for it, and there's this feedback loop with dopamine that says, "Oh, keep doing this. This feels good."

I think if you're a hard-nosed businessperson, this is the smartest lesson you can learn. Don't be a jerk. It's counter to our social nature, and people just hate it.

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