Scarcity upon Scarcity

Cass Sustein reviews Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir in the latest NYRB . The book focuses not on the reality of scarce resources but rather on the psychology of scarcity – the feeling of scarcity, which, the authors argue, has damaging consequences that pile up on top of each other: “They know that the feeling of scarcity differs across various kinds of experiences and that people can feel ‘poor’ with respect to money, time, or relationships with others. But their striking claim, based on careful empirical research, is that across all of those categories, the feeling of scarcity has quite similar effects. It puts people in a kind of cognitive tunnel, limiting what they are able to see. It depletes their self-control. It makes them more impulsive and sometimes a bit dumb. What we often consider a part of people’s basic character—an inability to learn, a propensity to anger or impatience—may well be a product of their feeling of scarcity. If any of us were similarly situated, we might end up with a character a lot like theirs. An insidious problem is that scarcity produces more scarcity. It creates its own trap.”

The feeling of scarcity deepens exponentially:

“Because they lack money, poor people must focus intensely on the economic consequences of expenditures that wealthy people consider trivial and not worth worrying over. Those without a lot of time have to hoard their minutes, and they may have trouble planning for the long term. The cash-poor and the time-poor have much in common with lonely people, for whom relationships with others are scarce. When people struggle with scarcity, their minds are intensely occupied, even taken over, by what they lack.”

When you lack food, for instance, you obsess over the lack to that food, and the lack of it, dominates your life. The authors note: “Obsessions developed around cookbooks and menus from local restaurants. Some men could spend hours comparing the prices of fruits and vegetables from one newspaper to the next. Some planned now to go into agriculture. They dreamed of new careers as restaurant owners . . . . When they went to the movies, only the scenes with food held their interest.”

They use the metaphor of “bandwidth” to express how people who feel lack tend to become obsessed, and suggest that this leads to rude and unruly behavior: “A depletion of bandwidth also reduces people’s capacity for self-control. After being asked to try to remember eight-digit numbers, people are more likely to be rude in difficult social situations. The general lesson is that when people’s attention is absorbed by other matters, they are more likely to yield to their impulses. With this lesson in mind, Mullainathan and Shafir insist that certain characteristics that we attribute to individual personality (lack of motivation, inability to focus) may actually be a problem of limited bandwidth. The problem is scarcity, not the person. Compare a computer that is working slowly because a lot of other programs are operating in the background. Nothing is wrong with the computer; you just need to turn off the other programs.”