Are the poor to blame for their poverty For their flawed choicesAre the overweight struggling with a diet What about those who complain of being too busy What about the lonelyWhat these have in common is scarcity something that economists have always studied But until fairly recently the idea of studying cognition or feelings from an economic perspective would have been absurd or even heretical The field of behavioral economics and neuroeconomics has changed that and took off like a rocket when Daniel Kahneman a psychologist won the Nobel Prize in Economics What Sendhil Mullainathan and Eldar Shafir focus on is how the human mind functions when it perceives scarcity there are predictable cognitive changes that most of would describe as seriously dysfunctionalThe term is scarcity trap and the basic idea is that our brains so tightly focus on what is so desperately lacking that thinking about anything else becomes tremendously difficult Like several other cognitive problems this was undoubtedly evolutionarily adaptive for our paleolithic ancestors so under some circumstances it probably remains beneficial but nevertheless outside of our controlThe result is revelatory there are profound implications for how our overnments poverty programs should function for what diets are likely to work or even how overly busy parents of newborn or sick etc children reactThis is an important book perhaps even a critical book We all have seen discussions of ineuality Liker - liker Ikke - Sosiale medier, samfunnsengasjement og offentlighet gain attention across the political spectrum and throughout the world Pikkety s book brought it to a head in the blogosphere but we d been watching the Occupy and 99% movement for some time Scarcity Why Having Too Little Means So Much tells us that in many ways the situation is worse than we thought Not only are we tolerating economic and social policies that worsen the situation of and people with each passing year it seems that being poor creates cognitive problems that make the burden even tougher to overcomeScarcity is the curse The subconscious perception of scarcity changes how we think in ways that are detrimental to escaping whatever is causing scarcity in the first placeThis probably wasn t always so We can imagine once upon a time a world that was so much less complicated that the mechanisms described here didn t backfire and instead helped those individualset back on their feetNote that poverty while it is the form of scarcity that deserves the most attention is definitely not the only one that is addressed in the book More on that belowThat scarcity is the cause of the problem and not the result reuires a significant conceptual reframingLet s o through the paradigm they lay outThe authors start out exploring focus under conditions of scarcity If two people are told to identify words flashing very very uickly before them on a screen it turns out that hunger will increase the effectiveness of recognition of words associated with food without decreasing effectiveness of other words This focus is a ood thing right There are many many examples where that is precisely what we wantWhat is happening is that scarcity causes adjustments to be made by unconscious parts of the brain and the attention of our conscious brain is much easily captured by stimuli that respond to that scarcity We can t control it we can t avoid it that point is made time and again by the evidence presented hereThe word they use to describe this is tunneling When scarcity causes us to focus we descend into a cognitive tunnel and aspects of the world that don t deal with that all important need become increasingly invisible to us We can even become completely oblivious Even when voluntarily focusing this is evident We ve all been so deeply engrossed in something reading playing a video Singing the Kyrgyz Manas: Saparbek Kasmambetov's Recitations of Epic Poetry game watching a tense movie that we are startled by someone telling us they d been trying toet our attention for some time Those unperceived stimuli have been inhibited from arriving in our awareness Other objectives we might have otherwise thought important can be eliminated from our consideration by UNIX Shells by Example (4th Edition) goal inhibition A salient example the authorsive is the neglect of a firefighter to fasten their seatbelt in the urgent rush from the station to a burning building although the scarcity here is of time not moneyBut if it is scarcity that is causing the tunneling we can t escape it easily and fall into it readily even when we do escape What tunneling reflects is a lack of bandwidth The term is annoyingly contemporary but uite apropos because like the cyber term it encompasses two related but different resources Tunneling taxes both our cognitive capacity ie intelligence as well as our executive control ie discipline Another way of perceiving this tunneling is very revealing A common way of prioritizing a to do list is to rank each item by both urgency and importance Something that is urgent but not important might be ranked higher than something that is important but not urgent correct Tunneling forces us to focus intensely on this urgent need even if our rationalconscious mind would prefer to treat something else as critical This seems counterintuitive but the book provides plenty of supporting evidence What this means is that what is merely important but not urgent is consistently suppressed For example replacing seriously worn tires on the car is important of course but at no point is it necessarily urgent until it is too late Dental care same thing Budgeting for long term but completely predictable expenditure is important but to someone tunneling through life with two jobs with variable hours child care troubles etc they will very often be surprised to discover that something important has crept up on themEven when they emerge from that cognitive tunnel their troubles won t be over of course This is where juggling comes in suddenly all those other important things are visible but there isn t enough time or energy or slack to consider them much less money in the bank account The stress is likely to kick them straight back into a scarcity mindset one where the bandwidth tax imposed by scarcity affects their intelligence and disciplineJust to remind us that all of these problems
"aren t just relegated to the poor who we might privately suspect are dysfunctional anyway the authors provide several counterexamplesBy way "t just relegated to the poor who we might privately suspect are dysfunctional anyway the authors provide several counterexamplesBy way an empirical analysis they uiz strangers in a mall After etting some socioeconomic data the intelligence of the participants is tested Then they are asked a key uestion and then their intelligence is tested some The key uestion is one designed to selectively trigger the scarcity capture phenomena Half of the subjects are asked how they would deal with a sudden emergency car repairs that cost about 150 for the other half the figure is bumped up to 1500 For those at the high end of the economic scale there was no change in the intelligence testing But for those downscale the later uestions showed a significant cognitive deficit as much as fourteen I points which at least temporarily would make them borderline deficient Another empirical study looked at how air traffic controllers interact with their families On days when The Air Traffic Load Was Low The air traffic load was low the had a cognitively easy day and went home and appeared to engage with their children in a stereotypically upper or middle class manner On days when the job was especially tough their interactions with their family were troubled and reminiscent of a stereotypical lower class familyThe effect of scarcity i The mathematics of ueuing theory demonstrates that as resource utilization approaches 100% ueue length and delay increase toward infinity Systems that are not resilient to congestion reach a point of overload where they experience a decrease in carried load even as offered load increases We experience this when congested highways encounter volume delays fewer cars per hour et through simply because too many are trying to et throughThe authors apply these principles without the math to analyzing several important social problems Scarcity captures the mind it focuses us on immediate needs while it diminishes the executive control functions we need for impulse control and to "make ood longer term priority decisions Poverty results from a scarcity "good longer term priority decisions Poverty results from a scarcity money aggravated by a scarcity of mental bandwidth needed to plan better use of the available money Busy people already suffering from scarcity of time waste even time because they don t have the bandwidth to plan the best use of their time Diets are difficult to sustain because the scarcity of permitted calories causes a focus on what you can t eat now while a tunnel vision excludes consideration of healthier options Lonely people suffer from a scarci. Librarian's Note this is an alternate cover edition ISBN 9781846143458A surprising and intriguing examination of how scarcity and our flawed responses to it shapes our lives our society and our cultureWhy do successful people Founding Mothers get things done at the last minute Why does poverty persist Why do organizationset stuck firefighting Why do the lonely find it hard to make friends These uestions seem unconnected yet Sendhil Mullainathan and Eldar Shafir show that they are all are examples of a mind set produced by scarcityDrawing on cutting edge res. ,
Yond what the authors would have ever dreamedAs is usual for my reviews I try and reserve my 5 star reviews than cause me to rethink something significant in the world that I had taken for ranted before Although it s not perfect this book fits that descriptions to a tee I once heard Sendhil Mullainathan speak at an event in DC and he was smart and engaging He s a MacArthur Foundation enius a Harvard economist and a TED speaker He has a wry sense of humor and tells anecdotes from his personal life to make his economics work come alive And all of that is in this book written with his long time collaborator Eldar Shafir who s a Princeton psychologistStill this book was a bit of a disappointment possibly because I expected so much A lot of the conclusions are well obvious The book s entire thesis can be summarized as People make bad decisions when they are resource constrained whether the resources in uestion are money time food or something else Some of it recaps what has been said before about hyperbolic discounting in economicsThe book s chapters Tracking Daddy Down go like thisIntro definition of scarcity and overview of its conseuencesChap 1 Theood scarcity can cause focus The bad focus can mean inattention to other thingsChap 2 Scarcity causes an internal disruption that makes it harder to make Cooked: From the Streets to the Stove, from Cocaine to Foie Gras good decisionsChap 3 Slack the opposite of scarcity allows better choices and reduces the bad conseuences of failiureChap 4 Poor people are sometimes realistic about estimating costs because they have to beChap 5 Borrowing when you re short of cash leads to a descending spiral of debtChap 6 7 Poverty is a vicious circle of scarcity leading to bad decisions leading to scarcityChap 8 Poverty can be alleviated by creating slack such as extra cash or day care to create timeChap 9 Efficient use of resources and division of labor helps organizations become efficientChap 10 Efficient use of self control helps with life issuesOn the positive side the book contains some interesting stories and a rich set of endnotes to track down the many studies the authors cite On the negative side the book keeps talking about how mainstream economics is traditionally for example that people are rational decision makers just so the authors can tear down the mainstream view Economists come across as completely clueless which maybe they are Is it really surprising that when you re poor hungry and stressed that you would make less than rational decisionsMullainathan and Shafir seem aware of this problem with the book Chap 2 contains some defensive passages about how bad decisions under scarcity are different from bad decisions due to stress The explanation isn t compelling and unlike most of their other claims that passage doesn t have lots of studies to back it upThe most interesting study in the book is one about street vendors in India who are in perpetual debt from a loan sell repay cycle Chap 6 The researchersive the vendors a cash rant to pay off their debts which should have allowed them to start saving a little and eventually eliminate the need for borrowing altogether One by one though the vendors fall back into debt Any non economist would see this as challenges of personality or habit It s the same reason why couch potatos find it hard to et off the couch and exercise everyday The authors though somehow turn this into a story of scarcity How it was because there wasn t enough slack Why don t they do an experiment where they Lost And Found Bride give everyone a little extra cash to save They don t though and I d betood money that with additional cash the vendors would still have fallen back into debt eventually What the vendors need is some training and hand holdingThis study illustrates one of the biggest problems with the book In order to make a case for the centrality of scarcity the authors Ambition and Accommodation: How Women View Gender Relations go too far Not every bad decision is about scarcity Sometimes people are dumb and sometimes there are dumb people And sometimes people are smart and there are also smart people At one point the authors write all people if they were poor would have less effective bandwidth Not sure about that Myrandmother managed seven kids and ran a shop but she was dirt poor until her children American Kinship: A Cultural Account grew up While I find the topic very interesting and the science and research put into understanding the scarcity factor intriguing I think the book was overly long repetitive and uite frankly circular Many of the points and ideas made were well described early in the book and yet 70% of it was just regurgitating the same themes Many books are written in such manner especially when they deal with non fiction topics and this book is no different Editors must beunning
for volume and as such authors are forced to write the same thing over and over again in different words Thevolume and as such authors are forced to write the same thing over and over again in different words The did a ood job explaining the issue and yet did not offer much on terms of strategies to handle
in short ood albeit long and repetitive descriptionshort Ancestral Voices: Religion and Nationalism in Ireland good albeit long and repetitive description the problem and almost no solutions Advice to new readers You can bail out after the first third and not miss anything of substance I stuck to the end and can attest to that This extremely important book takes a close and counter intuitive look at how the brain behaves when confronted with the lack of something That something is often money but it can also be time or will power or human connection In a nutshell it explains how the brain s default method of creating immediate solutions to urgent problems can very often create a much larger problem down the roadThe reason for this is that urgent problems causes the brain to tunnel which takes a tremendous amount of cognitive processing capacity Focus on the immediate problem creates a tax on processing power that impairs the ability to step back and take a wider view of the situation in particular it causes us to underestimate the long term costs of what may seem on the surface to be aood short term solutionThis book is written in a fairly academic style and is somewhat repetitive in the first half While it is not a self help book it does contain critical information on how we can counteract mental habits that keep us in a scarcity loop It also contains scores of real world examples of the bandwidth tax in action from farmers in India to small business owners in the Caribbean to air traffic controllers in the Midwest That latter Animal Ecology group offered a particularly uniue example of the bandwidth tax on days when flights were backed up and they were reuired to manage a heavier load of airborne planes than normal they demonstrated decreased ability to parent their children in a consistent fashionI originally assumed this would be an academically interesting book that would be most useful to those who develop aid programs It is definitely that as the authors address how many programs designed to help peopleet out of poverty fail because their structure contributes to a worsening of this bandwidth tax In reading it however I Also Saw And Of Myself In Its Pages Though It saw and of myself in its pages Though it me weeks to finish it because I was trying to put out so many fires at work the irony of it ending up overdue at the library was not lost on me it Art and Cartography: Six Historical Essays gave me tremendous insight into how I had ended up so far behind and what I need to do to fix that Thanks to Richard for encouraging me to bump it up my list The premise of the book is that we have a limited amount of mental bandwidth and we use a bit of that bandwidth each time we address a problem Poverty time pressure and responsibilities all tax our mental bandwidth even when we are not actively thinking about them The value of this text is not in highlighting that pressure from outside factors affects us all the time but rather in explaining the importance of considering bandwidth in designing programs assigning tasks etcScarcity provides a lexicon that is severely lacking from the conversations of social entrepreneurs behavioral economists and managers alike A uick read I highly recommend this to anyone who has ever been perplexed by the disconnect between knowing what to do and being able to do it Proposes that scarcity undermines rationality in consistent but unrecognized ways across human life The schedule the diet the budget the farm the attempt to connect The butter was spread a little thin but I appreciate that this book attempted to be humane about human failings I also appreciate that it did not fall into the Malcolm Gladwell smugness about how we re doing it wrong without any help on doing it right Mullainathan and Shafir at least tried though their suggestions did sound a little like try not being poor While it did not morally blame us for our failings it still located causes in us I am skeptical that is really what s driving the poverty of the street vendors in Chenna. Scarcity and the strategies it imposes the problems of modern life come into sharper focusMullainathan and Shafir discuss how scarcity affects our daily lives recounting anecdotes of their own foibles and making surprising connections that bring this research alive Their book provides a new way of understanding why the poor stay poor and the busy stay busy and it reveals not only how scarcity leads us astray but also how individuals and organizations can better manage scarcity forreater satisfaction and successhttpusmacmillancomscarcitySen.
Sendhil Mullainathan Ú 0 read & downloadTy of social contacts The misery increases with each cyclePeople embroiled in scarcity do not make the rational decisions predicted by traditional economics instead they consistently make costly short term decisions Payday loans that charge exorbitant fees to lend money until your next paycheck arrives are one remarkably popular and costly example The present is crushing the future is abstract Borrowing John for Everyone: Part One, Chapters 1-10 goes hand in hand with scarcity Poverty causes failure not the other way aroundTheeneral solution they offer to breaking various scarcity cycles is to introduce slack into the system capacity that is available to carry unplanned but inevitable surges in resource needs For example a chronic shortage of operating rooms at St John s Regional Health Center was alleviated when they decided to leave one operating room intentionally unused The steady flow of unscheduled emergencies was handled by this room without disrupting the scheduling of elective surgery A focus on efficiency alone has to yield to planning for slack capacity reuired to handle the unplanned yet inevitable shocks to the system Henry Ford apparently knew this in 1926 when he famously adopted a shorter 40 hour work week and Anarchist Modernism: Art, Politics, and the First American Avant-Garde gained an increase in output over the traditional 60 hour work weekWhile traditional systems such as payday loans are often designed to exploit poor decision making during scarcity systems can be redesigned to help people make better decisions during times of abundance GlowCaps pill bottles thatlow and beep to remind you to take the medicine each day are one Betting on Ideas: Wars, Inventions, Inflation good example There is no scarcity of books about the brain and psychology and emotion In fact the shelves areroaning with them But here s a psychological take on what you might regard as a problem of economics and that makes it Being after Rousseau: Philosophy and Culture in Question genuinely fascinating So it s a shame that it doesn t work better as a book but this is one of those titles that you will want to read despite thatThe authors Sendhil Mullainathan and Eldar Shafir look at the nature of scarcity and crucially the effect it has on human performance You might hear the term and think it s aboutoing hungry and that is one example of scarcity but they also look at what happens when money time and even friends are in short supply Although they aren t exact analogues all have related impacts on us as human beingsBy referencing the best available studies and doing a few of their own the authors come to some important conclusions Scarcity isn t all bad It concentrates the mind Berlioz and His Century: An Introduction to the Age of Romanticism gives us focus But there is a price to pay for being in that tunnel It means that other essential aspects of lifeet ignored And most strikingly what the authors call bandwidth a combination of cognitive ability and ability to concentrate is reduced They call this a bandwidth tax So far so engaging We aren t just offered the symptoms and diagnosis but also some attempts to counter this Pointing out for instance that it s better for people to make decisions and learn things when they are oing through a ood phase than through scarcity However I have two problems with this as a book One is that while it s no textbook it really isn t particularly readable it takes a really interesting subject and makes it a bit dull And the other is that there are strong signs that this is really a magazine article not a book For page after page the same thing is said in subtly different ways If I see the word bandwidth again today I ll scream The meat of this book could easily fit in 4000 wordsSo paradoxically I do urge you to read the book as the subject is well worth exploring but I can t promise that you will enjoy the experience Some people say poor people have poor ways the implication being that they are poor because of their poor ways These authors maintain that the reverse is true that people have poor ways because they are poor They say it can be explained by the psychology of scarcityWhat will suprise many readers is that rich or non poor persons manifest the same behavior attributed to poor people when subjected to situations of scarcity eg lack of time In other words the rich often have poor ways too but they have enough money of cover the fiscal mistakes However the psycholgy of scarcity can show up in scarcity of time and friends as well as money and the psychology of scarcity can come into play for all social and economic classesThis book finds surprising links and similarities between the stressed out time poor of the west with the truly poor dollar a day workers of the developing world Many wealthy people who are critical of the behavior Scarcity is one of those books that explains some aspect of the world in a way you hadn t though of before in an accessible form and backed by research results I d put books like Thinking Fast and Slow Antifragile Things That Gain from Disorder and The Difference How the Power of Diversity Creates Better Groups Firms Schools and Societies in this category They stretch your expectations and your perspectivesIn this book Creates Better Groups Firms Schools and Societies in this category They stretch your expectations and your perspectivesIn this book is considered in a variety of forms including a lack of wealth poverty time overcommitted food hunger and social contact loneliness Through a variety of experiments from a behavioral economic point of view the authors demonstrate that all of the varieties of scarcity share certain characteristics and that the results manifest themselves in ways that we might not have expected However they particularly focus on poverty with ood reason because it is a form of scarcity that affects both individuals and society the mostAs an example take the idea of the lack of success of the poor Are they not successful because they are poor or are they poor because they are not as capable Or both Your answer to that may depend on your worldview or your politics but it is a uestion worth asking because without a solid answer we have very little basis for finding solutionsThe authors decided to see if someone s level of wealth would affect them intellectually To do this they started by iving a random Awakening Spaces: French Caribbean Popular Songs, Music, and Culture group the scenario You car needs 300 in repairs the insurance will cover half Would youet it fixed How would you decide and have them talk about that decision Immediately after this they were Edge of Venomverse given test ofeneral intelligence Raven s Progressive Matrices to be exact it s an I type test In this "CASE THE RESULT WAS THAT BOTH "the result was that both and prosperous people come out very similar in their results Their cognitive capabilities were nearly eualThey then changed the scenario to represent a larger financial hurdle You car needs 3000 in repairs the insurance will cover half Would you Alliance Rising: The Hinder Stars I (Alliance-Union Universe) get it fixed How would you decide They presented this to a similar randomroup of subjects and the results were striking After that scenario the poor people performed significantly worse than the prosperous people How much worse An euivalent of 12 13 I points or a reater effect than taking the test after being forced to stay up all night with no sleepNote that this was at a subconscious level the scenario is hypothetical in both cases However the mere distraction of the scarcity of money causes significant degradation of intellectual functioning Moreover the same effect happened when they run a similar test on executive function that is self control and willpower With the first scenario no difference between poor and prosperous With the second significant differencesSo what does that tell us That when we see the
Poor Making Choices Thatmaking choices that clearly not helping their lives or performing poorly in educational settings or etting caught in behaviors that are downward spirals we need to take into account that there are invisible for significant cognitive deficits that any one of us would be under if we were in the same financial circumstances These are not character flaws they are deeply embedded ways that the human brain deals with scarcity We find similarly irrational behaviors in successful people whose scarcity involves lack of time and not lack of moneyThis book is filled with experiments like this and the results and the authors have done an admirable job conducting them to address some of the possible confounding factors They also do an excellent job of communicating their work in a readable form If you want a fantastic lens with which to examine some of the most perplexing uestions facing our world today this book is an excellent choiceAs is usual with books like these I thought that their solutions part of the book was weaker than the discussion What books like this really spur and why they are so important when they become popular are new conversations and thoughts among many people that lead to a shifting of eneral perception and ultimately people using this perspective to find solutions that are far be. Earch from behavioral science and economics Mullainathan and Shafir show that scarcity creates a similar psychology for everyone struggling to manage with less than they need Busy people fail to manage their time efficiently for the same reasons the poor and those maxed out on credit cards fail to manage their money The dynamics of scarcity reveal why dieters find it hard to resist temptation why students and busy executives mismanage their time and why sugarcane farmers are smarter after harvest than before Once we start thinking in terms of.