Dr. Paul Zak is a pioneer in the emerging field of “neuroeconomics.”

Paul Zak, 49, is a scientist, author and entrepreneur known for his groundbreaking research into oxytocin, a brain chemical he calls the “moral molecule” because it helps explain why people act responsibly, even when nobody is watching. A professor of economics, psychology and management at Claremont Graduate University, Zak is a pioneer in the emerging field of “neuroeconomics,” which studies how the brain affects economic decisions. His book, The Moral Molecule: Vampire Economics and the New Science of Good and Evil, will be published by Dutton in 2012.

How does brain chemistry affect our ability to act responsibly?

Oxytocin is a chemical released by the brain that people often think of as a female hormone because it stimulates labor and milk flow for breastfeeding. But men have it, too; it’s released during sex and is associated with cuddling behavior. Our research shows that oxytocin is also connected to many types of virtuous actions like responsibility, trust and generosity, and it motivates us to bond together to raise offspring and treat strangers like family. We help strangers all the time – no animal does that. I was in London this morning and a lady had a seizure; people rushed in to help her. If that happened in the African savanna, the gazelles would bolt because that lady just became lion food. But humans seem to be wired to be responsible to one another.

What made you decide to study oxytocin?

I’d been researching why parents invest time and money on their children when I happened upon oxytocin. At the time, few people studied it because there are no medical disorders associated with it – and it’s a very shy molecule that degrades rapidly. So I created experiments to stimulate oxytocin release. We gave college students some money and the choice to keep it or share it anonymously with other test subjects, who may or may not give money back to them. Then we drew blood from them immediately afterward. Ninety-five percent of those who received money showed an increase in oxytocin levels and were more likely to reciprocate the generosity. The receiver didn’t know who the giver was, but knew the giver was making a sacrifice, so a social contract was implied. The giver was essentially saying, “Share some back with me” and the recipient did. People acted responsibly even when no one was looking; everything was anonymous, and they had plenty of opportunities to cheat.

Why would people do that? Doesn’t traditional economics hold that people tend to act out of self-interest?

Traditional economics says that, but our experience tells us that people also help others all the time. It’s situational. There are a variety of factors that cause someone to be selfish or generous, but virtuous behavior is motivated by oxytocin. What inhibits those qualities is testosterone. In experiments where we increased people’s levels of testosterone, they were more selfish with resources and more willing to punish people for violating social norms. Another branch of economics, called behavioral economics, shows how irrational people can be with money, but I’ve rejected the word “irrational.” You could say people are irrational to give away money, but I think they’re ecologically rational because they are operating within a social system. In sexual selection, we look for mates who are generous with their resources, people who are saying, “If you marry me, look how much I’d share with you.”

Have you expanded your research beyond the laboratory?

I went to a wedding in England and took blood from the bride and groom, and their oxytocin levels were elevated. In one sense, that’s a no-brainer; but the question is, why do people spend $100,000 on a wedding? We’ve developed this ritual because it emotionally connects us to the new couple. We want them to be successful reproductively because it perpetrates the species. The wedding gets us all on board, and we feel part of a community. I’d never met the bride before, but we’re still friends, so the oxytocin release worked on a complete stranger. A similar thing happens in Papua New Guinea. These are subsistence farmers and the most isolated people in the world. I took their blood before and after a ritual dance and found that they too released oxytocin. That was a life-changing experience for me. I was so welcomed and treated like a member of the community, taken to sacred places, taken into homes and given gifts from people who had nothing.

You often speak to business groups. What’s the lesson for companies?

The first is that because we’re social creatures, we care about morality. We don’t like being around jerks. And good customer service means truly caring for people. Here’s a classic example: A salesman from a department store found that a customer had left his shoes in the store, so he drove out to the customer’s house, on his own time, to return the shoes. The customer now loves that store. The salesman created a release of oxytocin and now the customer is totally bonded to the company. The second lesson is in how to build a high-performance organization. You can lead by fear or lead by love. I can berate you, or I can empower you by being a coach and mentor. Leading by love is the oxytocin approach. It’s consistent with human nature and very low-cost. You’ll get higher morale, higher productivity, lower turnover and higher profits. You work here, but you are not an instrument, you are valuable in yourself. I run a 30-person lab and take this idea to heart. I know the names of everyone who cleans my building.

Can these techniques be used for selfish, manipulative purposes?

Sure. Five percent of the people we tested didn’t release oxytocin, and you have a sense they are psychopaths. But as social creatures, we’re good at identifying people who are lying to us. If you want to manipulate people’s oxytocin, if you’re faking it, they’ll probably figure it out. In the business world, the key is to really walk the walk and genuinely celebrate people. There are many payoffs to what we call “pro-social” behavior. In the late 1990s, I did research that showed that countries with a higher percentage of trustworthy people are more prosperous. Two-thirds of Norwegians say their countrymen are trustworthy, compared with just 2 percent of Peruvians. Trust is one of most powerful economic lubricants there is.

Is it true you have a habit of hugging everyone?

My nickname at Claremont is Dr. Love. Yeah, I hug everybody, but I announce it first. People start opening up to me even before I hug them. It’s a wonderful way to connect. I’m releasing oxytocin in the recipient of the hug, and probably in me, too. Last summer, I met with editors at publishing houses with my agent and I hugged everybody. Even in that business setting, people really connected to me. People’s faces light up. Is it cheesy? Sure. Does it work? Of course. I’m a practical guy.