What's Your Scarcity?

The drooping figure on the left seems to be making a metaphorical statement about income inequality and the difficulties of climbing out of poverty:

A book that offers a great consideration of the difficulties of climbing out of poverty from a fairly unique perspective is Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir.  My review and an excerpt:

Chances are, you've experienced scarcity. Not just a moment of lack, but a lengthy, chronic situation of less time, money, caloric intake (either starvation or dieting), or human contact (i.e. loneliness) than you need. If you're like most people, when you found yourself in that situation you found yourself feeling completely wrapped up in your condition of scarcity--your thoughts dominated by your lack of time, money, food, or contact and your inability to ever get enough or break the cycle of lack.

The reason chances are good that you can relate is because these are common situations--even those who've never struggled financially are likely to have struggled with time, weight, or contact at some point--and they all share a common mindset. The authors have gathered a wealth of evidence--both their own and others'--to show that, regardless of type, there is a particular psychology to scarcity. The successful, wealthy business person who is always harried for time deals with the same thing as the minimum wage worker struggling to make ends meet, just for a different reason. A person dealing with a scarce resource in the present moment finds so much of his or her mental attention occupied by that scarcity that less brainpower is left for everything else--he or she will experience a significant drop in operational intelligence and impulse control, and will experience a self-perpetuating dynamic that creates a scarcity trap (as the large, middle section of the book is titled, "Scarcity Creates Scarcity").

This is not to say that scarcity is determinant and people have no ability to alter their situations, but it is a very important acknowledgment that scarcity makes things more difficult. This is a psychological reality that effects everyone--some people may have more willpower than others, but everyone experiences a drop in their willpower when in a state of scarcity, not in comparison to others, but in comparison to their own capacities when not dealing with scarcity. Study after study, across numerous fields, indicates it is so, the drop in willpower, operational intelligence, and helpful reactions. Scarcity, whatever its source, makes things harder for you, whoever you are. You still have the power to change your situation, but doing so will be a bigger challenge for you than for those who have no scarcity.

The simple awareness and acknowledgment of this fact as a reality is hugely important, and I believe the book matters immensely simply for that. In addition, the third, final section offers strategies for countering the ways scarcity impacts us, both personal ideas for individuals and policy ideas for companies and government programs. The authors admit at the end of their introduction that they are exploring new territory and offer the book as a launching pad not a conclusion, so there is ample room for more discovery, reflection, and reaction; nevertheless, I find this a highly valuable book.

-----

Because we are preoccupied by scarcity, because our minds constantly return to it, we have less mind to give to the rest of life. This is more than a metaphor. We can directly measure mental capacity or, as we call it, bandwidth. We can measure fluid intelligence, a key resource that affects how we process information and make decisions. We can measure executive control, a key resource that affects how impulsively we behave. And we find that scarcity reduces all these components of bandwidth—it makes us less insightful, less forward-thinking, less controlled. And the effects are large. Being poor, for example, reduces a person’s cognitive capacity more than going one full night without sleep. It is not that the poor have less bandwidth as individuals. Rather, it is that the experience of poverty reduces anyone’s bandwidth.

When we think of the poor, we naturally think of a shortage of money. When we think of the busy, or the lonely, we think of a shortage of time, or of friends. But our results suggest that scarcity of all varieties also leads to a shortage of bandwidth. And because bandwidth affects all aspect of behavior, this shortage has consequences. . . . The challenges of sticking to a plan, the inability to resist a new leather jacket or a new project, the forgetfulness (the car registration, making a phone call, paying a bill) and the cognitive slips (the misestimated bank account balance, the mishandled invitation) all happen because of a shortage of bandwidth. There is one particularly important consequence: it further perpetuates scarcity. . . . Scarcity creates its own trap.

This provides a very different explanation for why the poor stay poor, why the busy stay busy, why the lonely stay lonely, and why diets often fail. To understand these problems, existing theories turn to culture, personality, preferences, or institutions. What attitudes do the indebted have toward money and credit? What are the work habits of the overly busy? What cultural norms and constructed preferences guide the food choices of the obese? Our results suggest something much more fundamental: many of these problems can be understood through the mindset of scarcity. This is not to say that culture, economic forces, and personality do not matter. They surely do. But scarcity has its own logic, one that operates on top of these other forces.