Understanding Cooperation Effect on Economy

Cooperation is a central concept in achieving an economy which mutually benefits the masses in the cyclical supply and demand nature of economics. It is also a key concept in the natural kingdom, the animal kingdom, and the galaxy. However, human beings are too competitive and selfish to accomplished these common goals unless conditioned otherwise. Conventional wisdom suggest that individuals will work together to accomplish a common goal, if it is mutually beneficial. When you consider that in observing kids or most people, they will collaboratively strive to achieve a goal. But what motivates this drive to achieve together? Is it personal gain, a need to have positive feedback, or actual positive rewards that motivates most of us to work together. Social scientist/authors, Hardin and Olson believed instead that individuals who engaged in “collective action” would be more likely to stand by while the other members of the group work towards the goal, if it is a public good or service. However, people are much more likely to become active participants if the goods or services will be provided to participants only, or if they receive immediate gratification for their labor. This phenomenon is interesting as it alters the manner in which we perceive collaborative effort and achievement. Some believe that even more issues arise when attempting to create cooperation, which may result in various deficits (North 21; Nye 126). This is intriguing research, as it changes the variables associated with maintaining cooperation for economic growth as well.

To ensure cooperation, we need a system which rewards participants on the percentage of work performed as well as for the work performed. In the perfect world, individuals would respond positively to the opportunity to experience mutually beneficial rewards. However, research suggest that one must feel that he she is being sufficiently rewarded for their work or face the threat of punishment, unless they are more likely to depend on the work of the other group. More clearly stated, if an individual does not feel that their work will be noticed, positively or negatively, they are much less likely to perform optimally. Individual’s behavior needs to be positively reinforced through rewards. Therefore, it is integral in the growth of the United States' economy for these individuals to receive satisfying compensation, to ensure they work as hard as their peers. Adequate rewards are essential to ensure that success of cooperation. As his predecessor Mancur Olson, Hardin believed that allowing the members of a group to feel empowered was another essential key to economic growth. In order for social order to be maintained, the government plays a major role. In his book 2000 book, Prosperity: Outgrowing Communist And Capitalist Dictatorships, Olsen states that large groups will face relatively high costs when attempting to organize for collective action while small groups will face relatively low costs. Furthermore, individuals in large groups will gain less per capita of successful collective action; individuals in small groups will gain more per capita through successful collective action. Hence, in the absence of selective incentives, the incentive for group action diminishes as group size increases, so that large groups are less able to act in their common interest than small ones.” (302)

The book concluded that collective action by large groups may be impossible to accomplish even if having shared interest, and that smaller groups may dominate the larger if they are focused on the incentive. The government plays an important role in the sustaining of cooperation subsequently also sustaining the economy. The government would not only provide compensation is sufficiently disbursed, it would also monitor the cooperation by supervisory reports and site visits. The government could also protect the markets after they develop them, which may be accomplished “by protecting individual rights to property and enforcing the rights of private contracts” (Olsen 225). In his book, Prosperity: Outgrowing Communist And Capitalist Dictatorships, Olsen reported that the implementation of these constructs can be accomplished “by having a government strong enough not to undermine them.” Therefore it would be the government’s responsibility to maintain their boundaries and not undermine the cooperation of the people buy attempting to bully or interfere with the running of the machine. With this said, the presence of the state (and state-issued law) is necessary for these solutions to work, although our authors may not agree.

The main goal of government is to establish and maintain stability within a society (Olson 65). Government must also protect those smaller countries which may have less representation and clout. In addition to protecting these smaller economies, the government must also monitor and monitor and protect those countries in special economic need. These variables must be considered locally, nationally, and internationally in the attempt a system that is mutually beneficial to these vulnerable countries, while remaining fair to all of the economies involved. In order to maintain cooperation, Key trade and development issues to be tackled will include the changing environment, energy commonly associated with trade, and fair trade.

As his predecessor Mancur Olson, Hardin believed that allowing the members of a group to feel empowered was essential to economic growth. He believed that prior to feeling good about the reward which will be acquired upon completion of the project, individuals performed more productively when they felt empowered and had a sense of pride regarding what they were attempting to accomplish. This would be true if cooperation occurred globally. There is significant economic disparity between countries in the world. The large differentiation in country’s economies in the world has occurred over the past century as the Industrial Revolution significantly increased the disparity in income (Acemoglu and Robinson 5). This is the logical flow as counties who thrived after the Industrial Revolution of the nineteenth century, were those who were able to keep pace with the developments and jobs created by industries. Additionally, the country had to have sufficient manpower for industry work, knowledge of the work, and the skills to implement such work. Many underdeveloped or smaller countries had none or only one of these key ingredients, and would therefore need assistance in maintaining economically with cooperation.

Works Cited

Acemoglu, D. and Robinson, J. A. Why Nations Fail. Crown Business, New York, 2012.

North, D. Institutions, Institutional Change and Economic Performance. Cambridge University Press, Cambridge, MA, 1990.

Nye, J. “Institutions and the institutional environment”. In Brousseau, E. and Glachant, J.-M., editors, New Institutional Economics: A Guidebook, chapter 3, pages 67–80. Cambridge Univ, New York, 2008.

Olson, M. “Prosperity: Outgrowing Communist and Capitalist Dictatorships”. In Hardin, G. and Baden, J., editors, Managing the Commons, chapter 3, pages 17–30. W.H. Freeman, San Francisco, CA, 2000.

Olson, M. The Logic of Collective Action. Harvard University Press, Cambridge, MA, 1965.