Building a Caring Economy

DAVOS – Today’s mainstream economic models are based on two fundamental assumptions: first, humans are essentially selfish actors who act rationally to advance their own utility – so-called homo economicus; but, second, as Adam Smith’s metaphor of an “invisible hand” was intended to suggest, self-regarding behavior can inadvertently advance the common good. Both assumptions are patently false.

In order to address pressing global problems like climate change and inequality, the predominant economic models must be rethought, incorporating other motivational systems that can induce different human behaviors. Such realistic models, based on empirical research in psychology and the neurosciences, would allow societies to cultivate their sense of compassion and build a new kind of “caring economics” that reflects more fully what it is to be human.

Neuroscientific studies have shown that humans can be motivated by care and systems of affiliation just as easily as they can be by power and achievement or consumption and desire. After all, we have evolved to be able to form stable relationships, build trust, and care for children, all of which requires a capacity for compassion and empathy. Once we recognize that these caring motivational systems are common to all humans – indeed, most are shared with other animals – the world begins to look very different.

It is important, however, to distinguish between basic empathic responses and a more universal capacity for compassion. Empathy alone does not necessarily prompt pro-social behavior; empathizing with the suffering of another may not drive you to help that person. In fact, empathy can result in distress, which may even lead to withdrawal or burnout.

Compassion, by contrast, is concern for another person that is linked to a strong motivation to alleviate their suffering. If, say, a mother sees her child crying after a fall, she may first empathize with the child, feeling its pain and sadness. But, rather than succumbing to feelings of distress, she will take the child in her arms to soothe and comfort it.

Both empathy and compassion seem to come naturally to humans. But both responses are fragile, and can be quelled or reversed by a large number of factors – including the degree to which we identify with the person who is suffering.

Humans tend to find it easy to empathize with and care about members of their “in-group” – people with whom they share features, whether real or socially constructed, like race, gender, age, or religious affiliation. Empathy and care toward out-group members does not come quite as easily. Such universal or global compassion – caring about people who are very different from us – probably requires the involvement of higher cognitive functions, and thus may be unique to humans.

It may also require some training. After all, living in a world that assumes we are homo economicus can encourage selfish habits. Fortunately, research suggests that such habits can be broken.

The largest such study is the recently completed ReSource project, in which my colleagues and I subjected almost 300 people, over 11 months, to an intense mental-training program, developed by a team of experienced mediation teachers, scientists, and psychotherapists. The goal was to cultivate a broad range of mental capacities and social skills, including attention, mindfulness, self-awareness, perspective-taking on others, empathy, compassion, and the ability to cope with difficult emotions like anger or stress. Progress was assessed by measuring changes in participants’ brains, hormones, health, behavior, and subjective sense of wellbeing.

The project’s preliminary results reinforce a key finding of previous, smaller studies: just as we can strengthen and transform a muscle through physical exercise, we can develop our brain and behavioral capacities – from attention and emotional regulation to trust and donation behavior – through regular mental training.

Of course, mental exercises must be honed to develop particular skills and behaviors; mindfulness practice alone is not adequate to improve, say, socio-cognitive skills. And lasting changes occur only after a prolonged period of regular training. But, with the right approach, it may well be possible to foster the kind of altruistic and pro-social behaviors that are needed to improve global cooperation.

On the basis of these findings and those from other psychological, neuroscientific, and economic studies, my colleagues and I are now working with the president of the Kiel Institute for the World Economy, Dennis Snower, to formulate new motivation-based computational models of economic decision-making. These models will enable us to make clear, testable predictions about expected monetary-exchange behavior in an economic context, including in addressing common-good problems. In fact, several of these experiments are already underway.

The secular, ethical mental-training exercises used in the ReSource project could be applied in businesses, political institutions, schools (for both teachers and students), and health-care settings – in short, in all areas where people experience high levels of stress and related phenomena. Young children, in particular, could benefit considerably from such training programs, which could enable them to use mental skills and compassion to regulate stress and emotions.

Policymakers should take the lead in promoting this science-based approach to learning and working, such as by redesigning institutions to emphasize collaboration. Several governments – including that of the United Kingdom – have developed so-called “nudge units,” which seek to encourage people to make better choices for themselves and society by providing subtle hints, cues, and other suggestions.

A lack of compassion is arguably the cause of many of humankind’s most devastating failures. Our success in tackling the enormous challenges we face will depend not only on our willingness to work actively and cooperatively to advance the common good, but also on our ability to foster the attributes needed to do so.