Scarcity: Summary Review & Takeaways
This is a summary review of Scarcity containing key details about the book.
What is Scarcity About?
Scarcity discusses the role of scarcity in creating, perpetuating, and alleviating poverty. The authors define scarcity as the feeling someone has when they have less of a resource than they perceive they need. They explain that scarcity forms a common chord across all of society's major problems. They emphasize that scarcity is hardly transient, but instead a concept that constantly absorbs people and has profound effects on human behavior, emotions, and thinking.
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
Book details
- Print length: 304 Pages
- Genre: Nonfiction, Psychology, Economics
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.
What are the chapters in Scarcity?
Introduction
The scarcity mindset. Focusing and tunneling; The bandwidth tax
Scarcity creates scarcity. Packing and slack; Expertise; Borrowing and myopia; The scarcity trap; Poverty
Designing for scarcity. Improving the lives of the poor; Managing scarcity in organizations; Scarcity in everyday life
Conclusion.
What are some of the main summary points from the book?
Here are some key summary points from the book:
- Scarcity refers to a condition where resources, such as time, money, or food, are limited relative to the demand for them, leading to a sense of lack or deprivation.
- Scarcity imposes cognitive burdens on individuals, affecting their decision-making abilities, attention, and overall mental bandwidth.
- When people experience scarcity, their focus narrows to address the immediate needs that are lacking, leading to tunnel vision and a reduced ability to consider long-term goals or alternative options.
- Scarcity creates a sense of urgency and increases the value placed on scarce resources, often leading to impulsive or suboptimal choices.
- Scarcity mindset can perpetuate a cycle of scarcity, as the cognitive load and limited resources make it challenging to escape the immediate demands and plan for the future.
- Scarcity affects various aspects of life, including finances, education, health, and time management.
- The book explores how scarcity impacts the poor and those facing socio-economic challenges, highlighting the vicious cycle created by limited resources and cognitive strain.
- Scarcity can lead to increased stress levels, reduced self-control, and impaired judgment, influencing both personal and professional performance.
- The authors propose that by understanding the psychology of scarcity, individuals and policymakers can design interventions to mitigate its negative effects.
- The book suggests several strategies for managing scarcity, such as prioritizing and planning, building slack or buffer resources, and fostering a mindset of abundance rather than scarcity.
- Scarcity can also have positive effects by sharpening focus and driving innovation when individuals and organizations are motivated to find creative solutions to overcome limitations.
- By recognizing the effects of scarcity, individuals can cultivate empathy and understanding toward others facing similar challenges, leading to more compassionate and effective interventions.
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.” (Meaning)
“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 Quotes
What do critics say?
Here's what one of the prominent reviewers had to say about the book: “Compelling, important...A handy guide for those of us looking to better understand our inability to ever climb out of the holes we dig ourselves, whether related to money, relationships, or time.” — The Boston Globe
* The summary points above have been concluded from the book and other public sources. The editor of this summary review made every effort to maintain information accuracy, including any published quotes, chapters, or takeaways
Chief Editor
Tal Gur is an author, founder, and impact-driven entrepreneur at heart. 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, The Art of Fully Living, has led him to found Elevate Society.
