Liberals (in the classical sense) emphasize the value of international division of labour as well as its elemental development. It is regarded as an emerging phenomenon and a natural consequence of mankind’s timeless pursuit to improve the world. Liberals differentiate between personal relations, based on personal dealings which go along with rules of justice for small groups, on the one hand side, and anonymous relations, as regards markets and the res publica in the political sphere, on the other. Different rules of conduct have to be applied for the latter in comparison with small groups.
Over and over again liberals are confronted with claims they would pursue an unrealistic worldview. The invisible hand is discarded as an idealistic imagination. Cooperation of anonymous people is regarded as in need of urgent protection. Only the state and centralized rules of conduct would make markets and international cooperation work.
Well, that is not true.
Cooperation develops on its own. There is no need neither for coordination nor for control by a central authority.
A remarkably powerful validation for the classical liberal insight has been put forward in the year 1984 and seems to be easily overlooked even today. The validation can be found in one of the seminal works of game theory. The renowned political scientist and economist Robert Axelrod examined in his book “The Evolution of Cooperation”, the conditions under which cooperation can develop in a world of egoists without central authority. Furthermore Axelrod was in search of the best strategy to pursue individually as well as collectively.
Axelrod’s findings and insights rest on experiments. A vast number of participants contested for the first place in computer tournaments providing individual strategies to beat out their competitors. The results are very encouraging: encouraging für social cooperation as well as the liberal proposition of cooperation of one’s own will.
The mayor finding was and still is: cooperation can be initiated by a small group of individuals, even if nobody else cooperates and without central control. Once established, cooperation is robust and prevails even against uncooperative strategies. The winning strategy can be labeled Tit for Tat with permanent cooperation and reciprocity resting on two premises: never be the first one to defect and defect only after the second time your counterpart did not cooperate.
Why is this strategy so successful and predominant? Cooperation improves your own state of affairs as well as your counterpart’s. Defection not prior than after the second time and only once serves two purposes at the same time: It serves as a barrier and protects against non-cooperative behaviour as well as it encourages cooperation. Even bacteria pursue this strategy successfully.
Robert Axelrod confirmed the classical liberal position of international division of labour and the invisible hand as well as the advantages of decentralized competition in a very practical sense.
The American journalist and scholar Henry Hazlitt coined the term “mutualism” or rather “cooperationism” as regards the natural phenomenon and ethically desirable pattern of human conduct., i.e. cooperation. His book “The foundations of morality” was published 20 years prior to Axelrod’s seminal book.
How can cooperation be vitalized? Actions to be taken are quite simple: 1. Make the future, i.e., consequences of cooperation as well as non-cooperation visible in the present. 2. Increase longterm benefits instead of short-dated ones and the related shortsightedness. 3. Encourage people to care about one another and make use of reciprocity. As regards cooperation partners and the state it is very useful, following Axelrod, to act in a flexible way. That means consider the counterpart’s interests and capabilities, instead of pursuing maximal demands and word-for-word accuracy of laws and legal ordinance. Thus “You must!” gives way to “I want.” (to cooperate and even comply).
Everybody who reads Axelrod today and reflects upon his insights will perceive how in a blatantly obvious way how much our statist society has gone astray already.