Scarcity: The New Science of Having Less and How It Defines Our Lives

Image of Scarcity: Why Having Too Little Means So Much
Release Date: 
March 23, 2015
Henry Holt and Company
Reviewed by: 

The basic thesis of this book, which modestly sets out to present a “science in the making,” is that “scarcity is not just a physical constraint. It is also a mindset.” Scarcity of time, money, and social interaction result in a similar mindset, the understanding of which “can help to explain many of the behaviors and consequences of scarcity.”

Scarcity focuses the mind; this is called “the focus dividend” which results in “tunneling” or a narrowing of the cognitive field onto the scarce good. Tunneling can have positive effects of increasing efforts to respond to the scarcity issue in question, though is equally liable to have negative consequences—“the tunnelling tax” known also as the “bandwith tax”—as we neglect other activities. The “bandwidth tax” reduces our “fluid intelligence” and “executive control” which means that while we may be efficiently focusing on the problem in hand we are dealing much less efficiently with a host of other issues.

So far, so good. Probably most people would concede that when they have an overwhelming preoccupation they are by definition giving less attention to other things. But is this book telling us anything we do not know already, despite the introduction of new “concepts”? Possibly the bar should be raised on what is considered a concept.

Into this mix the authors introduce “the concept of slack [which] cuts to the core of the psychology of scarcity. Having slack allows the feeling of abundance. Slack is not just inefficiency; it is a mental luxury.” This “concept” is illustrated by the constraints and trade-offs demanded of anyone packing a smaller suitcase—with no slack those extra shirts and underwear must be left behind.

The authors apply their basic conceit to a number of different situations, one of the most striking being that of the fireman who is focusing on getting to his fire forgets to fasten his seatbelt and is flung from the fire-truck with fatal results.

In the early chapters where they are setting out their scarcity stall authors Mullainathan and Shafir focus on a subjective definition of scarcity, only “combining subjective and objective” in later chapters dedicated to the analysis “of poverty for example.”

In real life, however, “objective” contextual factors cannot be excluded; and the analysis and recommendations of the later chapters show the paucity of their “science of scarcity.” While they are to be commended for bringing together economics and psychology, the exclusion of the contribution of other disciplines—sociology, anthropology, “even marketers”—takes its toll. The introduction of the concept of bandwidth does certainly not constitute a radical rethinking of poverty policy.

The anecdotes and neologisms are entertaining and sometimes enlightening, though almost all generalizations and illustrations can be overturned if “objectivity” is allowed to seep in. Time pressure can be helpful or an impediment; trade-offs are good or bad; slack can deteriorate into abundance, and so forth.

The various diagrams and tests are poorly reproduced, though accepting the invitation to test the “checker-shadow illusion by Ted Adelson of MIT” in Chapter Four “Expertise” is highly recommended.

At several points the question arises: Is this whole thing just some kind of geeky—and it has to be said: male—spoof? The anecdotes and examples are almost all about men . . . with the exception of course of a woman driver causing back up, and some women entrepreneurs who separated home money and business money by keeping “one wad of cash in their bra’s left cup, and the other in the right cup.”

To paraphrase Miss Jean Brodie in her prime, “For those who like this sort of thing, this is the sort of thing they like.” People who enjoyed the bestselling Freakonomics by Stephen J. Dubner and Steven D. Levitt will find this book equally fascinating.

This book could be an amusing gift to a friend, though not to someone objectively and subjectively struggling with “scarcity”; or it could be mined for anecdotes to share in a management seminars . . .  “don’t think that your employee is poor just because s/he’s dumb . . . s/he’s also dumb because she’s poor.”

Otherwise, reading this book from cover to cover is liable to induce a sense of retrospective scarcity relative to all the other things left undone.