Much Ado About Next to Nothing

An economist and a public affairs professor­ say that scarcity is more pervasive, troublesome and significant than previously thought.

Scarcity: Why Having Too Little Means So Much. Sendhil Mullainathan and Eldar Shafir. 304 pages. Times Books.

Our perception that we have less than we need can help explain things like poverty cycles, institutional and governmental incompetence and credit card debt, say the co-authors of Scarcity: Why Having Too Little Means So Much.

Sendhil Mullainathan and Eldar Shafir focus on “the logic and the consequence of scarcity: What happens to our minds when we have too little, and how does that shape our choices and our behaviors?” Mullainathan, a Harvard economist, and Shafir, a Princeton public affairs professor, contend that scarcity creates its own trap, providing a disparate explanation “for why the poor stay poor, the lonely stay lonely and diets often fail. To understand these problems, existing theories turn to culture, personality, preferences or institutions. 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. … But scarcity has its own logic, one that operates on top of these other forces.”

Here’s how the scarcity web is spun. I’ll create Carol, a hypothetical freelancer in a big city who is single mother of an elementary school-aged child. Carol suffers from scarcity overload. Because she is self-employed, she can never say no to work and finds herself running out of time on deadlines that constantly back up to each other. Money is tight, so she’s trapped into covering bills with frequent payday loans.

She’s lonely, but between caring for her daughter and meeting deadlines, she has few places to go and few people to meet. She knows shedding 15 pounds would make her more attractive, but dieting fails because it’s overwhelming to constantly count calories and to juggle rewards for sacrifices, so she often succumbs and binges.

In every instance, Carol suffers from scarcity—of time, money, friendship and restraint. The consequence is unhappiness and suffering.

The authors clearly explain how scarcity sets traps. First, it captures the mind—the brain sees only a deadline at noon tomorrow. This can set up one of scarcity’s few positives, what the authors term the “focus dividend.” In the right circumstances, scarcity can make us work more clearly and precisely toward a successful ending.

… sugar cane farmers in India fared better on intelligence tests after harvest (when they have money) than before (when money is running out).

But it also (too often) sets up tunneling—boring in on the matter at hand to the point where it obliterates everything else in life. You can’t enjoy watching your son’s basketball game because you’re fretting over tomorrow’s deadline. At this stage, scarcity disrupts our bandwidth, or mental capacity, and makes serious threats to our executive control, our restraint.

A reader quickly sees that scarcity is everywhere and imposes a way of thinking that is unlike stress, depression or angst, though these are byproducts. The authors present abundant, original, peer-reviewed research from multiple countries and cultures, sprinkled with (occasionally light-hearted) anecdotes that nicely illustrate their points, making the book accessible to a broad audience.

In one study, the authors and their colleagues found that sugar cane farmers in India fared better on intelligence tests after harvest (when they have money) than before (when money is running out). Unlike workers in other disciplines, these farmers might get paid only once or twice a year: at harvest. Such a study shows how scarcity taxed the farmers’ bandwidth when they were flush and when they were broke.

To those who insist that individuals or institutions are to blame for scarcity, Mullainathan and Shafir respond:

Scarcity creates a mind-set that perpetuates scarcity. If all this seems bleak, consider the alternative viewpoint: the poor are poor because they lack skills. The lonely are lonely because they are unlikable; dieters lack willpower; and the busy are busy because they lack the capacity to organize their lives. In this alternative view, scarcity is the consequence of deep personal problems, very difficult to change.

The scarcity mind-set, in contrast, is a contextual outcome, more open to remedies. Rather than a personal trait, it is the outcome of environmental conditions brought on by scarcity itself, conditions that can often be managed.

The authors contend that individuals can “scarcity-proof” their environments. For instance, they tell about a foundation president whose days are packed with back-to-back meetings. To avoid inevitable spillover, the president has his assistant interrupt the meeting to announce when five minutes are left. Thus the president isn’t hampered by a time scarcity. The assistant, the authors say, prevents the psychology of scarcity from doing harm. It’s like putting rumble strips on streets to change driver behavior.

Scarcity is certain to gain popularity and generate discussion because it hits home. Everyone has experienced scarcity, and the research cited will likely alter every reader’s worldview.

Tony Fitzpatrick is an author, science writer and essayist who lives in Webster Groves, Mo.