This is a summary review of Scarcity containing key details about the book.
What is Scarcity About?
Scarcity by Sendhil Mullainathan and Eldar Shafir explains how scarcity affects our thinking and decision-making and offers strategies to overcome its negative effects. (Full Summary…)
Scarcity Summary Review
“Scarcity: The New Science of Having Less and How It Defines Our Lives” by Sendhil Mullainathan and Eldar Shafir offers a thought-provoking exploration into the intricate relationship between scarcity, psychology, and human behavior. In this captivating book, the authors delve deep into the concept of scarcity, illustrating how it affects individuals from various walks of life, transcending socio-economic boundaries and cultural contexts.
The central premise of the book is that scarcity, whether it be in the form of financial constraints, time limitations, or even social isolation, has a profound impact on the human psyche. The authors argue that the feeling of scarcity not only arises from tangible limitations but is also deeply rooted in our subjective perceptions of what we need and desire. This dual perspective – the physical constraints of scarcity and the subjective experience of it – forms the foundation of their exploration.
Mullainathan and Shafir draw upon a rich tapestry of research and real-world examples to support their claims. They discuss the parallels between time management and financial management, showcasing how busy professionals and individuals in dire financial straits both grapple with similar decision-making challenges. Through vivid anecdotes and relatable scenarios, the authors make a compelling case for the universality of scarcity’s influence on the human mind.
The book doesn’t just stop at establishing the existence of this scarcity mindset; it delves deep into the neurological and psychological mechanisms that underpin it. The authors explore studies on starving individuals during World War II and contemporary experiments that reveal how scarcity captures attention on a subconscious level. Readers gain valuable insights into the impact of scarcity on cognitive abilities, decision-making, and even social interactions.
One of the most remarkable aspects of “Scarcity” is its ability to bridge the gap between disparate fields of study. While economics traditionally tackles the concept of scarcity from a macroeconomic perspective, the authors take a more personal and psychological approach. They argue that scarcity is not just a matter of resource allocation; it’s a mindset that affects everything from our daily choices to our long-term aspirations.
Moreover, the book sheds light on the cyclical nature of scarcity. It’s not merely a matter of having less but how scarcity perpetuates itself by diminishing cognitive bandwidth. This concept has far-reaching implications, particularly in understanding why certain individuals or groups struggle to break free from the shackles of scarcity, be it in the form of financial insecurity, time constraints, or social isolation.
In conclusion, “Scarcity: The New Science of Having Less and How It Defines Our Lives” is a thought-provoking and enlightening read that challenges conventional wisdom on scarcity. Through meticulous research and a compelling narrative, Mullainathan and Shafir provide readers with a comprehensive understanding of how scarcity shapes human behavior, thoughts, and decisions. This book is an essential addition to the literature on behavioral economics and psychology, offering valuable insights for academics, policymakers, and anyone interested in the intricate workings of the human mind in the face of scarcity.
Who are the authors of Scarcity?
Sendhil Mullainathan is an American professor of Computation and Behavioral Science at the University of Chicago Booth School of Business and the author of Scarcity: Why Having Too Little Means So Much.
Eldar Shafir is a bestselling author and an American behavioral scientist. He is a professor at Princeton University, where he studies and teaches decision-making, cognitive science, and behavioral economics
How long is Scarcity?
- Print length: 304 pages
What genre is Scarcity?
Nonfiction, Psychology, Economics
What are good quotes from Scarcity?
“Being poor 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.”
“Before you criticize someone, you should walk a mile in their shoes. That way, when you criticize them, you’re a mile away and you have their shoes.”
“When scarcity captures the mind, we become more attentive and efficient.”
“Abundance means freedom from trade-offs.”
“The poor stay poor, the lonely stay lonely, the busy stay busy, and diets fail. Scarcity creates a mindset that perpetuates scarcity.”
“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.”
“We pinch pennies on small items, yet we blow dollars on big ones. Our frugality is thereby largely wasted.”
“Diets prove difficult precisely because they focus us on that which we are trying to avoid.”
“Many systems require slack in order to work well… We fail to build slack because we focus on what must be done now and do not think enough about all the things that can arise in the future… [You] should leave spaces open in your schedule just in case something unexpected comes up… When you face scarcity, slack is a necessity.”
“To attend to the future requires bandwidth… When scarcity taxes our bandwidth, we become even more focused on the here and now. We need cognitive resources to gauge future needs, and we need executive control to resist present temptations. As it taxes our bandwidth, scarcity focuses on the present, and leads us to borrow.”
“The challenges of sticking to a plan, the inability to resist a new leather jacket or a new project…and the cognitive slips.. all happen because of a shortage of bandwidth…Scarcity creates its own trap.”
“Scarcity in one walk of life means we have less attention, less mind, in the rest of life.”
“We fail to build slack because we focus on what must be done now and do not think enough about all the things that can arise in the future. The present is imminently clear whereas future contingences are less pressing and harder to imagine. When the intangible future comes face to face with the palpable present, slack feels like a luxury.”
“A standard impulse when there is a lot to do is to pack tightly– as tightly as possible, to fit everything in. And when you are not tightly packed, there’s a feeling that perhaps you are not doing enough…You have undervalued slack. The slightest glitch imposes an obligation you can no longer afford, and borrowing from tomorrow’s budget comes at high interest.”
“Bandwidth measures our computational capacity, our ability to pay attention, to make good decisions, to stick with our plans, and to resist temptations.”
― Sendhil Mullainathan, Scarcity: Why Having Too Little Means So Much
What are key takeaways from Scarcity?
Takeaway #1: Don’t be a victim of scarcity thinking
When it comes to scarcity, the sense of lacking is not just physical. If you overcommit your time or energy towards work and dieting then there’s a lose-lose situation where either he’ll have too much for what happens if something goes wrong in one area but no possibility at all if things go smoothly everywhere else; poor people are most vulnerable because they can’t freely manipulate their situations like richer folks often do–so those who suffer harshest from this link between problems (such as lack) tend also be those without any choice
Takeaway #2: We think about the things we are missing when faced with scarcity.
When we don’t feel as though we have enough, our need to satiate that lack can become a focal point in our lives. For example, at the end of World War II, experiments were conducted to help holocaust survivors who were gravely deprived of basic sustenance. The test group was tested with different feeding regimens to see what would help them live longer. The subjects became obsessed with food once they began to feel more hungry. Subjects who have gone through a traumatic event often expand the time that it occurred to try and process everything.
Takeaway #3: Scarcity can lead to focus, but also to potential dangers
We become more attentive at managing pressing needs, a process known as tunneling. When time is scarce, we tend to get the most out of it. A deadline, for example, has the ability to help us stay focused. The “tunnelling tax” occurs when someone becomes so fascinated by their work that they no longer notice other things around them, like potential dangers or opportunities for success in other endeavours.
Takeaway #4: Scarcity reduces our ability to manage and compute information.
When you are faced with a choice, bandwidth can either be spent on something important or it could divert your attention away from what really matters. The power of scarcity taxes this precious resource and makes us unable to pay close enough attention to where important decisions need to be made. Scarcity intrudes into our lives at all levels; personal relationships, romance, career paths etc.; they’re everywhere. These moments arise out of nowhere – simply because there wasn’t enough time invested beforehand.
Takeaway #5: We need to have some slack in our lives or we will never be able to escape the circle of scarcity.
When we fall into the trap of scarcity, things are never enough and we constantly move from one thing to the next without ever catching up. The inability to manage time in an organized fashion can lead to the rapid switching of tasks, which then leads to a breakdown in productivity. This can be alleviated by giving ourselves slack. Slack is like the space in your suitcase. If you pack everything, there will be no possible way to fit anything else in–unless you leave something behind. Slack is a time window between meetings that can allow you to save yourself from the hassle of scarcity.
Takeaway #6: We value small things more when they are rare.
Learning from our experiences can change how we perceive things. People living in poverty can recognize the value of a dollar more so than people who are rich because they need it to survive. People who live in poverty are more prone to save and buy things at discount rates.
Takeaway #7: In order to make wise decisions, we need to focus on the future.
With cash tight, it may be tempting to take out a loan. But before you do that think long term about what your finances will look like and how much of an impact this has on life for both yourself as well as others around us who also struggle financially but don’t have any need whatsoever in being helped by our decisions. The tone here really highlights why taking out loans without enough money isn’t so wise – even though they seem necessary right now.
In other words, when we are too focused on short-term needs, such as money or time in an attempt to make ends meet, we may end up making sub-optimal decisions which lead us down a path without much sustainability. This myopia can be seen with borrowing – not just because it’s related primarily to material values but also due to how often this kind of behavior pattern occur when there is scarcity present.
Takeaway #8: To curb the negative effects of scarcity, redesign programs to add slack and manage bandwidth.
Add slack and manage bandwidth to deal with scarcity. With slack in a system, there is plenty of space for emergencies and unplanned events in the system, so planned tasks can now go ahead without fear of disruption. Additionally, manage your bandwidth by blocking out time in advance so that you are always prepared.
Tal Gur is an impact-driven entrepreneur, author, and investor. After trading his daily grind for a life of his own daring design, he spent a decade pursuing 100 major life goals around the globe. His journey and most recent book,