Market Place interview with author.
At first blush, there is little in common between a Harvard economics professor who's very busy and a poor person from India, struggling to simply put food on the table. But according to Sendhil Mullainathan, the Harvard economist, what they have in common is an idea: Of scarcity.
"Both of us are touching on the exact same psychology," Mullainathan says. "There is actually something primitive that happens to the human brain when experiencing very little."
In a book he's written, with Eldar Shafir, about this topic, called "Scarcity: Why Having Too Little Means So Much," Mullainathan says that scarcity can focus the mind.
"Everyone has had the experience of two weeks left to do something, and you doddle," he adds. "One day left to do something, wow, you are focused."
He says this same focus applies to people with limited money.
"They become incredibly focused on every little dollar, every little penny," he says.
Mullainathan says, that scarcity doesn't always work to focus the mind sometimes it leaves people thinking about time and money even when they don't want to. He calls this the "bandwidth tax." He gives an example of a person who is procrastinating on work to go to their child's softball game.
From Tim Hartford's review:
Here is a flawed but intriguing book with a compelling thesis: being short of time is fundamentally similar to being short of money, or friends, or food, or indeed being short of space when packing for a trip. In each case, the feeling of scarcity comes to the front of the mind. It makes us focus on the immediate problem, which can make us remarkably effective – but also over-anxious, short-termist or blinkered.
From Publishers Weekly
Starred Review. The struggle for insufficient resources—time, money, food, companionship—concentrates the mind for better and, mostly, worse, according to this revelatory treatise on the psychology of scarcity. Harvard economist Mullainathan and Princeton psychologist Shafir examine how scarcity in many forms, from poverty and scheduling pressures to dieters' food cravings and loneliness—a kind of social scarcity —force the brain to focus on alleviating pressing shortages and thus reduce the mental bandwidth available to address other needs, plan ahead, exert self-control, and solve problems. The result of perpetual scarcity, they contend, is a life fixated on agonizing trade-offs, crises, and preoccupations that impose persistent cognitive deficits—in poor people they lower mental performance as much as going a night without sleep—and reinforce self-defeating actions. The authors support their lucid, accessible argument with a raft of intriguing research in psychology and behavioral economics (sample study: We recruited Princeton undergraduates to play Family Feud in a controlled setting ) and apply it to surprising nudges that remedy everything from hospital overcrowding to financial ignorance. Mullainaithan and Shafir present an insightful, humane alternative to character-based accounts of dysfunctional behavior, one that shifts the spotlight from personal failings to the involuntary psychic disabilities that chronic scarcity inflicts on everyone. 8 illus. Agent: Katinka Matson, Brockman Inc. (Sept.) Review
"The struggle for insufficient resources—time, money, food, companionship—concentrates the mind for better and, mostly, worse, according to this revelatory treatise on the psychology of scarcity . . . The authors support their lucid, accessible argument with a raft of intriguing research . . . and apply it to surprising nudges that remedy everything from hospital overcrowding to financial ignorance . . . Insightful."—Publishers Weekly (starred review)
"Scarcity is a captivating book, overflowing with new ideas, fantastic stories, and simple suggestions that just might change the way you live."—Steven D. Levitt, coauthor of Freakonomics
"Sendhil Mullainathan and Eldar Shafir are stars in their respective disciplines, and the combination is greater than the sum of its parts. Together they manage to merge scientific rigor and a wry view of the human predicament. Their project has a unique feel to it: it is the finest combination of heart and head that I have seen in our field."—Daniel Kahneman, author of Thinking, Fast and Slow
"Sendhil Mullainathan and Eldar Shafir show how the logic of scarcity applies to rich and poor, educated and illiterate, Asian, Western, Hispanic, and African cultures alike. They offer insights that can help us change our individual behavior and that open up an entire new landscape of public policy solutions. A breathtaking achievement!"—Anne-Marie Slaughter, professor emerita, Princeton University, and president and CEO of the New America Foundation
"Here is a winning recipe. Take a behavioral economist and a cognitive psychologist, each a prominent leader in his field, and let their creative minds commingle. What you get is a highly original and easily readable book that is full of intriguing insights. What does a single mom trying to make partner at a major law firm have in common with a peasant who spends half her income on interest payments? The answer is scarcity. Read this book to learn the surprising ways in which scarcity affects us all."—Richard H. Thaler, University of Chicago, coauthor of Nudge
"With a smooth blend of stories and studies, Scarcity reveals how the feeling of having less than we need can narrow our vision and distort our judgment. This is a book with huge implications for both personal development and public policy."—Daniel H. Pink, author of Drive and To Sell Is Human
"Insightful, eloquent, and utterly original, Scarcity is the book you can’t get enough of. It is essential reading for those who don’t have the time for essential reading."—Daniel Gilbert, Edgar Pierce Professor of Psychology, Harvard University, and author of Stumbling on Happiness