If Frank wants berries, apples and fish, there is little point in him specialising in producing berries, if that significantly impacts his ability to produce apples and fish. But if Frank can cooperate with someone, perhaps between them, each can have more than they would otherwise have.

Labouring with another person toward a common goal is an example of cooperation. Together the individuals can achieve something, which separately, they might not. But this is not the only form of cooperation. Sharing is also a form of cooperation. Resources other than labour are combined to achieve a preferred outcome. The reason that people cooperate is because the result of the cooperative action is preferred over the isolated individual actions.

Sharing and cooperative labour are not very formal methods of cooperation. After sharing, one person may feel that another has not contributed fairly or in like quality or quantity. He may feel that he has lost in the cooperative action or perhaps not gained as much as expected. Even though his condition might be much better than it would otherwise have been with isolated action, the other parties may have benefited to a much greater extent and he may be unhappy with the outcome. His material gain, might have resulted in a psychic loss.

It’s clear that beyond the simplest forms of cooperation, people evolve a sense of “price”. If Frank shares his 50 berries with Mary and Mary shares her 10 apples with Frank, there is a sense that the berries and apple have a price. Frank might have 200 berries and be unwilling to bring his entire stock to the table for the purposes of sharing with Mary. But this sharing is a form of exchange. And the case above Frank may be exchanging 25 berries for 5 apples. If Mary eats seven of the apples and 35 berries, Frank might stop sharing. He might deem the price to be too high. Rather than referring to this as sharing, it’s more appropriate to call this an exchange. In this case the exchange might be 25 berries for 5 apples or 1 apple can buy 5 berries. Both parties to the exchange and may conduct the exchange on future occasions.

This price is dependent on cooperation. There is no theft, violence or threat of violence in the example above. This is voluntary cooperation in which the parties to the cooperation can establish a bartered price, for their engagement, in the their respective actions. This cooperation, which can establish an exchange price allows the various actors to specialise in certain activities, because they expect that others may exchange products or services in their relative areas of productive activity.

If Frank is a good berry picker, there is an incentive for him to specialise in this because he can use his surplus berries to buy apples, fish or other cooperative services that he might desire. Mary might also specialise more in apple production and Jim could get is apples and berries by exchanging his fish for the other products. Jane might thus find that enough berries, apples and fish for her own needs can also be produced, by the others in her community and she might see that her neighbours might all like some furniture to relax on. If she can make a hammock, perhaps she could exchange it for a month’s worth of food supplies. Or perhaps she could arrange for her to be supplied with food for a few months, while she makes 3 hammocks.