Scarcity: Why Having Too Little Means So Much (2 page)

And it does so on a subconscious level. The tiny time scales in this task—outcomes measured in milliseconds—were devised to observe fast processes,
fast enough to remain beyond conscious control
. We now know enough about the brain to know what these time scales mean. Complex higher-order calculations require more than 300 milliseconds. Faster responses rely on more automatic subconscious processes. So when the hungry recognize
CAKE
more quickly, it is not because they
choose
to focus more on this word. It happens
faster than they could choose to do anything. This is why we use the word
capture
when describing how scarcity focuses the mind.

This phenomenon is not specific to hunger.
One study finds that when subjects are thirsty
, they are much quicker (again at the level of tens of milliseconds) to recognize the word
WATER.
In all these cases, scarcity operates unconsciously. It captures attention whether the mind’s owner wishes it or not.

Now, both thirst and hunger are physical cravings. Other, less visceral forms of scarcity also capture the mind. In one study, children were asked to estimate from memory, by adjusting a physical device,
the size of regular U.S. coins
—from a penny to a half-dollar.
The coins “looked” largest to the poorer children
, who significantly overestimated the size of the coins. The most valuable coins—the quarter and half-dollar—were the most distorted. Just as food captures the focus of the hungry,
the coins captured the focus of poor children
. The increased focus made these coins “look” bigger. Now, it’s possible that poor children are simply unskilled at remembering size. So the researchers had the kids estimate sizes with the coins in front of them, an even simpler task. In fact, the poor children made even
bigger
errors with the coins in front of them. The real coins drew even more focus than did the abstract ones in memory. (And with no coins around, the kids were highly accurate at estimating similarly sized cardboard disks.)

The capture of attention can alter experience. During brief and highly focused events, such as car accidents and robberies, for example, the increased engagement of attention brings about what researchers call the
“subjective expansion of time
,
”
a feeling that such events last longer, precisely because of the greater amount of information that is processed. Similarly, scarcity’s capture of attention affects not only what we see or how fast we see it but also how we interpret the world. One study of the lonely
flashed pictures of faces for one second
and asked subjects to describe which emotion was being expressed. Were the faces conveying anger, fear, happiness, or sadness? This simple task measures a key social skill: the ability to understand
what others are feeling. Remarkably, the lonely do
better
at this task. You might have thought they would do worse—after all,
their loneliness might imply social ineptitude or inexperience
. But this superior performance makes sense when you consider the psychology of scarcity. It is just what you would predict if the lonely focus on their own form of scarcity, on managing social contacts. They ought to be particularly attuned to reading emotions.

This implies that the lonely should also show greater recall for social information.
One study asked people to read from someone’s diary
and to form an impression of the writer. Later they were asked to recall details from the diary entries. The lonely did about as well as the nonlonely. Except in one case: they were much better at remembering the entries that involved social content, such as interactions with others.

The authors of this study relay an anecdote that nicely summarizes how loneliness changes focus: Bradley Smith, unlucky in love and lacking close friends, finds his perception changes after a divorce.

Suddenly, Bradley cannot escape noticing connections
between people—couples and families—in exquisite and painful detail. At one time or another, Bradley’s plight may have befallen most of us. Perhaps, similar to Bradley, a romantic relationship ends, and you find yourself noticing lovers holding hands in the park. Or your first days in a new school or job place you in a world of strangers, in which each smile, scowl, or glance in your direction assumes added significance.

Bradley, you might say, is the social equivalent of the starving men, leafing through his own cookbooks.

When we told an economist colleague that we were studying scarcity, he remarked, “There is already a science of scarcity. You might
have heard of it. It’s called economics.” He was right, of course. Economics is the study of how we use our limited means to achieve our unlimited desires; how people and societies manage physical scarcity. If you spend money on a new coat, you have less money for a dinner out. If the government spends money on an experimental procedure for prostate cancer, there is less money for highway safety. It is remarkable how frequently otherwise clever discussions tend to overlook trade-offs (an oversight that our theory helps explain). Other economic insights come from the recognition that physical scarcity responds to prices, sometimes in unexpected ways.
European paleontologists in nineteenth-century China
learned this the hard way. Seeking to acquire scarce dinosaur bones, they paid villagers for bone fragments. The result? Supply responded. More bone fragments. When peasants found bones, they would smash them to increase the number of pieces they could sell. Not quite what the paleontologists were hoping for.

Our approach to scarcity is different. In economics, scarcity is ubiquitous. All of us have a limited amount of money; even the richest people cannot buy everything. But we suggest that while physical scarcity is ubiquitous, the feeling of scarcity is not. Imagine a day at work where your calendar is sprinkled with a few meetings and your to-do list is manageable. You spend the unscheduled time by lingering at lunch or at a meeting or calling a colleague to catch up. Now, imagine another day at work where your calendar is chock-full of meetings. What little free time you have must be sunk into a project that is overdue. In both cases time was physically scarce. You had the same number of hours at work and you had more than enough activities to fill them. Yet in one case you were acutely aware of scarcity, of the finiteness of time; in the other it was a distant reality, if you felt it at all. The feeling of scarcity is distinct from its physical reality.

Where does the feeling of scarcity come from? Physical limits, of course, play a role—the money in our savings account, the debts we owe, the tasks we must complete. But so does our subjective perception of what matters: how much do we need to accomplish? How
important is that purchase? Such desires are shaped by culture, upbringing, even genetics. We may deeply desire something because of our physiology or because our neighbor has it. Just as how cold we feel depends not only on absolute temperature but also on our own private metabolism, so
the feeling of scarcity depends
on both what is available and on our own tastes. Many scholars—sociologists, psychologists, anthropologists, neuroscientists, psychiatrists, and even marketers—have tried to decipher what accounts for these tastes. In this book, we largely avoid that discussion. We let preferences be what they are and focus instead on the logic and the consequences of scarcity: What happens to our minds when we feel we have too little, and how does that shape our choices and our behaviors?

As a blunt approximation, most disciplines, including economics, say the same thing about this question. The consequence of having less than we want is simple:
we are unhappy
. The poorer we are, the fewer nice things we can afford—be it a house in a good school district or as little as salt and sugar to flavor our food. The busier we are, the less leisure time we can enjoy—be it watching television or spending time with our families. The fewer calories we can afford, the fewer foods we can savor. And so on. Having less is unpleasant. And it can have repercussions, for example, on health, safety, or education.
Scarcity leads to dissatisfaction and struggle
.

While certainly true, we think this misses something critical. Scarcity is not just a physical constraint. It is also a mindset. When scarcity captures our attention, it changes how we think—whether it is at the level of milliseconds, hours, or days and weeks. By staying top of mind, it affects what we notice, how we weigh our choices, how we deliberate, and ultimately what we decide and how we behave. When we function under scarcity, we represent, manage, and deal with problems differently. Some fields have studied
mindsets created by particular instances of scarcity
: how dieting affects mood, or how a particular cultural context might affect the attitudes of the local poor. We are proposing something much more universal: Scarcity,
in every form, creates a similar mindset. And this mindset can help explain many of the behaviors and the consequences of scarcity.

When scarcity captures the mind, we become more attentive and efficient. There are many situations in our lives where maintaining focus can be challenging. We procrastinate at work because we keep getting distracted. We buy overpriced items at the grocery store because our minds are elsewhere. A tight deadline or a shortage of cash focuses us on the task at hand. With our minds riveted, we are less prone to careless error. This makes perfect sense: scarcity captures us because it is important, worthy of our attention.

But we cannot fully choose when our minds will be riveted. We think about that impending project not only when we sit down to work on it but also when we are at home trying to help our child with her homework. The same automatic capture that helps us focus becomes a burden in the rest of life. 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 aspects of behavior, this shortage has consequences. We saw this with Sendhil and Shawn. 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. It was not a coincidence that Sendhil and Shawn fell into a trap and stayed there. 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.

Analyzing these scarcity traps together does not imply that all forms of scarcity have consequences of the same magnitude. The scarcity mindset can operate with far greater import in one context than in another.
The structure of human memory
, for example, can be used to understand everything from the trivial (why we forget our keys) to the important (the credibility of eyewitnesses) to the tragic (the onset of Alzheimer’s). Likewise, though the logic of scarcity can be similar across different domains, its impact can be quite different. This will be particularly true when we analyze the case of poverty. The circumstances of poverty can be far more extreme, often associated with contexts that are more challenging and less forgiving. The bandwidth tax, for example, is likely to be larger for the poor than for the busy or for dieters. For this reason, we will later pay special attention to the poor.

In a way, our argument in this book is quite simple. Scarcity captures our attention, and this provides a narrow benefit: we do a better
job of managing pressing needs. But more broadly, it costs us: we neglect other concerns, and we become less effective in the rest of life. This argument not only helps explain how scarcity shapes our behavior; it also produces some surprising results and sheds new light on how we might go about managing our scarcity.

This book describes a “science in the making,” an attempt to unravel the psychological underpinnings of scarcity and to use that knowledge to understand a large variety of social and behavioral phenomena. Much of the book draws on original research conducted in settings ranging from university laboratories, shopping malls, and train stations, to soup kitchens in New Jersey and sugar cane fields in India. We also revisit older studies (such as the hunger study) through the lens of our new hypothesis, reinterpreting them in ways that the original authors probably did not anticipate. We use this evidence to build our case, to put forward a new perspective.