When we need something urgently, our mind starts
focussing on that thing instead of seeing its long-term outlook. Consumed by
what we don’t have, we often ignore other important things in life and make bad
choices.
Brandy, a thirty-something lady from Detroit, Michigan,
was fired from her job after she once mistakenly used her company credit card
to buy diapers for her child. Being the breadwinner of the household, losing
the job wreaked havoc on her financial conditions.
In America, statistics suggest poverty is decreasing, but
hunger is actually rising, and when your child is hungry, you don't care where
the food is coming from. With no solution in sight about how she was going to
meet her daily needs, credit card bills kept piling up and pushed Brandy into
heavy debt crisis. Poverty compounds itself in several ways than just incurring
debts.
An NPR’s podcast on Hidden Brain channel that I recently
listened, in which Brandy is one of the persons interviewed, also discusses about
Katie, a young girl who is too busy achieving professional successes. Instead
of spending free time on relaxing and doing other important things in her life,
she began to focus only on things related to her success at work. In Katie’s
case, scarcity was brought on by a lack of time.
One of characteristics of scarcity is that it draws
significant amount of attention to itself. Focus on oneself brings benefits,
but it has huge costs, too, and that adds up to the scarcity trap. When you are
lonely, you tend to adopt certain behaviour that in the short term aids you
manage that scarcity, but in the long term only makes things worse.
There are psychological connections between scarcity and
how we react to that crisis. Experiencing scarcity leads to biases in the mind
that only exacerbates a difficult situation. In their book Scarcity: Why Having Too Little Means So Much (2013), sociologist Sendhil
Mullainathan of Harvard University and Eldar Shafir, behavioural scientist and psychology
professor at Princeton University, explain
that ‘just as food possesses the minds of those starving, scarcity steals
mental capacity wherever it occurs—from the hungry, to the lonely, to the
time-strapped, to the poor.’
Mullainathan further suggests that ‘our solutions always
struggle because the underlying problem is so complicated’. While social
scientists focus deeply on the economist of poverty, they tend to pay much less
attention to the psychology that creates the problem. ‘The mistake we make in
managing scarcity is that we focus on one side of the calculus’, the book
concludes.
