Review: “Scarcity: why having too little means so much”

I found Scarcity so striking in its surprises, and so valuable in its insights, that after a few months, I went back to read it a second time.

The authors—a Harvard economist and a Princeton psychologist—joined their distinct approaches to explore scarcity in its many forms. Scarcity of money is the bedrock of economics, of course, on both personal and grander scales. But the authors look at the broader picture: scarcity of time (oh those deadlines!), scarcity of calories (from wartime starvation to dieting or even challenges faced just before lunch), and the scarcity of companionship (loneliness). All these share common elements, and affect us in ways we do not and perhaps cannot even recognize while in their coils.

Here is a simple scenario. Driving home after a long day, you notice every restaurant you pass, and the enticing smell as you go by that grilled steakhouse sets your mouth watering. You don’t even hear the question your daughter asked from the back seat until she asks it a second time. That grip on your mind is scarcity (minor hunger), and examples like this abound. If an expensive car repair is what preys on your mind instead of what to have to dinner? The problem is the same. You miss the question, and can’t quite explain why little Jimmy was mean at recess while fretting over the car repair situation. Then OOPS, you just ran a red light, and snap at the child for distracting you. It’s the scarcity monster.

Scarcity has some benefits. When you’re running out of time on a deadline, you focus and tunnel in until the job is done. The authors call this The Focus Dividend. But it has a cost: the Tunneling Tax when your mental bandwidth is overwelmed. Chasing that deadline, you forget that you promised to spend time with a lonely friend. You only remember at 3am when you’re beating yourself up in an insomniac night. How could you be so stupid?

But actually, one of the things scarcity does is make you stupider. In repeated examples, the authors show that we act more impulsively, make poorer decisions, and are less capable of solving problems. It doesn’t matter if the abundance/scarcity is pixelated blueberries being shot at targets in a video game, or more significantly if it is money, or time, or calories.

Let me make this very clear: these results are about the same individual being tested under different circumstances. We aren’t poor or time-stressed because we are stupid, we are functioning more stupidly once scarcity sets in. The authors have plenty to say about how and why this is so, with evidence to back up their observations.

The effect is not small, either. Have you ever had to stay awake for 24 hours straight? Do you think you were in top shape then, making smart decisions? No? But even hypothetical scarcity leaves you dumbed-down in that manner! The real thing? The effect is worse and lasts longer.

I have one big criticism of the book. It is exploring new territory; the authors say that right up front to emphasize that they don’t have all the answers. So reading the book delivers a whole lot of goshwow and I repeatedly exclaimed “Really? Are you kidding me?” What’s weak is any answer to “What can I do about this in my personal life, and “What can society do with this information?” It’s like reading a great book on the physics of engineering, but there is no easy takeaway for how to build a bridge. You’ll have to work that out for yourself, or wait for the authors’ next book. I hope there is one.

Read more of Liz D.'s reviews in our catalog here!

Also available in audiobook format here: Scarcity.