Welcome to the global social economy

By Paul J. Zak , written on March 11, 2013

From The News Desk

Last year I stayed a week in the Papua New Guinea rainforest in a village of indigenous subsistence farmers. I was there to run an experiment related to the sharing economy, which has become the latest buzzword du jour in startup circles. There I was struck by how fluid the “mine/yours” concept was. Mivai (a common name there) might grow food and give it to Lilla (same), and perhaps at some point Lilla will reciprocate. Or maybe not.  This works in the rainforest because there is plenty of food for everyone, and sharing sustains social relationships, which work to everyone’s benefit.

As I see it, the Papua New Guinea approach to commerce exemplifies two forces that are changing Western economies. First, economic transactions are always social. The only reason you purchase the good or service I sell is that it will improve your life in some way. Uncoerced trade is fundamentally about service to others. Maximizing profit by shortchanging customers is a brilliant way to go out of business fast. Commerce, especially commerce via the Internet, is getting increasingly personal, which characterizes virtually all economic exchanges in Papua New Guinea. Second, even if our society has plenty, the planet doesn't, so there is no reason to waste. Conserving resources just makes good sense. This is especially true when, like the Papuans, one's resources can be used to build better social relationships.

Paul Zak in PNGCall this the “social” or “sharing” economy. The DIY movement and the maker subculture are manifestations. Nonprofits like,, and not only facilitate sharing, but have a hidden stickiness: social relationships. Even the for-profit world is using this model with businesses like, and perhaps the original social economy site Amazon's Mechanical Turk. A recent innovation in the Mechanical Turk site is free-tasking: listing jobs that do not pay anything. This wiki model goes to the heart of the social economy, gifting time to another person to help him or her achieve a goal.

Why work for someone else? This is the wrong question. The goal of free-tasking is finding an activity that is engaging. The social economy thrives on engagement, paid or not. And that is why I went to Papua New Guinea.

Papuan life is full of rituals that have been performed for thousands of years. I wanted to understand why rituals are so pervasive in human cultures, so I set up a field medical hut that included a generator, freezer, centrifuge, needles, and tubes for blood. There is no electricity or any services in the rainforest so I had to bring everything I needed. I took blood samples from 20 men before and after a ritual dance. None of these men had ever been to a doctor, and they found the process intriguing.

Participating in this traditional dance induced a majority of the men's brains to release oxytocin (a substance I have been studying for a decade). After the ritual, the men reported that they felt closer to their community and the people in it. This is the same result I have found in laboratory and field studies in the US and Western Europe. When the brain synthesizes oxytocin, people feel connected to others, including complete strangers, and will tangibly help them by sharing money.

Social intercourse in our daily lives also thrives on ritual, from coffee with friends to the mass attendance at sporting events. Commerce, too, relies on rituals: greeting the customer, the exchange of information, the transfer of money, and the thank you after the sale. The difference is that the commercial ritual occurs almost always between strangers. The social economy amps up this ritual by adding P2P intimacy. That's the engagement of the social economy.

Oxytocin is an ancient and unconscious brain signal indicating that a stranger is likely to be trustworthy and thus safe to interact with. My studies have shown that oxytocin makes us treat strangers like family – showing them compassion, trust, and generosity with resources. We might even work for them for free, or at least return stuff to them that we've borrowed.

But here's the kicker: oxytocin release is relaxing and makes us feel good through the release of another neurochemical, dopamine. We like to join others to achieve a common purpose, whether it is taking down a Mastodon or banging out a section of code.

A triumph of the human species is that we are able to extract value from social interactions with strangers, as long as we can determine who is safe. Sometimes that value is romantic, or a friendship, and sometimes it is working together on a project. The social economy taps into this desire to engage with others in pursuit of a common purpose.

The social economy democratizes commerce. Working on what, and for whom, you want has contributed to the secular reduction in the average company size. Eventually, we may all work for ourselves. Actually, it will be just the opposite: each of us may have hundreds of employers and we will be able to choose which jobs we want to do that day or that week. My lab has even shown that interacting with others through social media causes oxytocin release.

In the social economy, relationships are all the more important. What comes around goes around. Do the work well and your rep grows and more work comes your way (and you can demand a higher wage). An added benefit is that the work is produced by its owner. If you've been to a farmer's market, you know that half the fun is interacting with someone who grew your food.  I have found the same with Uber drivers; they often have fascinating lives, like the musician-driver who took me to Logan Airport in Boston recently.

Just like the millions who “work” for as sellers, there are many “owners” who work for or rent rooms through who have the pride and flexibility of being small business owners. My experiments have shown that oxytocin connects us to brands but only when the people who serve us enjoy what they do. The connection of oxytocin is the neurologic foundation for customer loyalty. It's all about the people.

It's the new social economy of us.

[Main image courtesy FriskoDude]