I disagree with a lot of what the Churchland's say. However, I think what she says about oxytocin playing a role in adding to empathy in human beings and then culture and society enhancing that effect is on the right track.
An excerpt from a review of Patricia Churchland's Braintrust:
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Oxytocin's primary purpose appears to be in solidifying the bond between mother and infant, but Churchland argues—drawing on the work of biologists—that there are significant spillover effects: Bonds of empathy lubricated by oxytocin expand to include, first, more distant kin and then other members of one's in-group. (Another neurochemical, aregenine vasopressin, plays a related role, as do endogenous opiates, which reinforce the appeal of cooperation by making it feel good.)
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From there, culture and society begin to make their presence felt, shaping larger moral systems: tit-for-tat retaliation helps keep freeloaders and abusers of empathic understanding in line. Adults pass along the rules for acceptable behavior—which is not to say "just" behavior, in any transcendent sense—to their children. Institutional structures arise to enforce norms among strangers within a culture, who can't be expected to automatically trust each other.
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Recognizing our continuity with a specific species of animal was a turning point in her thinking about morality, in recognizing that it could be tied to the hard and fast. "It all changed when I learned about the prairie voles," she says—surely not a phrase John Rawls ever uttered.
She told the story at the natural-history museum, in late March. Montane voles and prairie voles are so similar "that naifs like me can't tell them apart," she told a standing-room-only audience (younger and hipper than the museum's usual patrons—the word "neuroscience" these days is like catnip). But prairie voles mate for life, and montane voles do not. Among prairie voles, the males not only share parenting duties, they will even lick and nurture pups that aren't their own. By contrast, male montane voles do not actively parent even their own offspring. What accounts for the difference? Researchers have found that the prairie voles, the sociable ones, have greater numbers of oxytocin receptors in certain regions of the brain. (And prairie voles that have had their oxytocin receptors blocked will not pair-bond.)
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I think your question about how immaterial values materialize in a sentient cell is a much more difficult question. I believe that biochemicals like oxytocin and social interactions can create "moral" behavior in p-zombies (theoretical human equivalents that lack any phenomenal experience) - perhaps something comparable to the mating and parenting behaviors of the different voles.
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