Scarcity – the true cost of not having enough

scarcityEvery so often I pick up a book that gives me a new perspective and I want to dive quickly into learning as much as possible. The psychology of scarcity fascinated me immediately.

This would be a book about poverty, ie not having enough money, except that the same behaviours can be recognised in other forms of scarcity – those who are time poor, dieting (calorie poor) or lonely. In fact at the midpoint of the book, it turns to poverty and explains that the other examples have been mainly used as an empathy bridge. What a great technique – I have experienced the undermining behaviours of over-busyness and dieting but I had choices. I could drop things off my list of responsibilities and I could decide not to diet.

By contrast, a poverty trap genuinely is a trap and the psychology that drives undermining behaviours can be experienced by anyone, regardless of education. So lets have a look at some of the behaviours that I recognised in this book. I will avoid talking about poverty – this is outside my realm of expertise and I’m afraid of oversimplifying a very complex area.

Focusing and tunneling are part of the same equation. Focusing can be extremely powerful – you have a deadline (yes I respond to the most looming deadlines), you focus to the exclusion of all else, you pull it off and deliver. Even you are surprised at what you could achieve. Focusing is powerful and we do it because it is necessary.

Tunneling is where the wheels fall off a little. What else were you meant to be doing while you were focusing? You are in a tunnel with only the end goal in sight and other important components can’t enter. You forget to pick the kids up – might be a time scarcity issue. You make poor long term decisions in favour of short term solutions, essentially borrowing from the future because you are too focused on the now. The long term doesn’t get a good run inside the tunnel because it can be tossed out to re-enter our focus only when decisions become urgent.

The authors show there is essentially a mental bandwidth tax when scarcity rears it’s head. We are focused on the problem and that impairs our normal cognitive capacity – so much so that it is akin to slipping from 100 to 90 on an IQ test. No one’s brain works well in the wrong noisy environment and a scarcity worry is like an internal train track of racket continually on in our mind. It makes us dumber, more impulsive, with less executive control. I like to think of it as my “I’m not coping” moment. I can see mistakes being made, I can see myself acting uncharacteristically and fortunately for me, I know I just need to get past the deadline, or say no to the overcommitment that has tipped me over the edge. I need to reset and my worries are such that I can do so. Not everyone has this luxury – which brings us to the concept of slack.

I have always loved slack. I prefer to work in the evening when I have as much time as I need. I love the weekend, when I can fulfill a commitment anytime it takes my fancy between cob Friday and 9am Monday morning. Not every circumstance has slack though and this can be a big cause of the poverty trap never being fixed by a single input of funds. Slack is the ability to respond to a bigger than normal demand on your system. When the medical emergency hits or the big annual bill, people with slack can dip into their reserves. People without slack are straight back on the coping edge where focus, tunneling and short term decisions dominate.

But is my time ‘slack’ or ‘fat’? The definition used in the book talks about the slack that is needed to regularly cope with pressure. It gives the example of a hospital that created slack by putting an operating theatre aside for emergencies and taking the pressure off the rest of the system. productivity boomed because the emergencies were no longer having a domino effect across the rest of the overstuffed system. A highway works best under 70% capacity – at a 100% you have logjam. The need for slack is a fact of life.

Abundance can lead to waste though. Plenty of time leads you to waste until a deadline looms – three interim deadlines are better than one big one. A person will treat a $50 discount on a $100 item differently than the same $50 discount on a big item such as a laptop. A focused person with the pressure of scarcity in their life will treat the $50 savings the same way in both cases. This more rational, trade off thinking can be a hall mark of efficiency and is less available when people or organisations have plenty of abundance.

And so we come to the author’s conclusions:

  • Bring important, and not just urgent decisions into the tunnel. Reminders and checklists are great.
  • build in slack – or at least the perception of slack so that there is no borrowing from the future and domino effects.
  • recognise that neglect happens often when we are too busy focusing and tunneling so automate decisions that might be neglected.
  • vigilance is required for continued good behaviour and against impulse behaviour. How can we make our impulses good ones (eg an impulse purchase of savings) or reduce the vigilance fatigue (don’t stock up on chocolate if I don’t want to be vigilant about my level of Toblerone consumption).
  • linking and timing of decisions. trick yourself into commitments, tell friends, link to other motivators. The authors give the example of using half the horrendous fee on a payday loan as a savings device.
  • economise on bandwidth. simple decision making rules are easier than agonising over each decision in detail.
  • bandwidth varies. the authors originally attempted to write this book in the mornings but reduced their bandwidth immediately before writing by checking their email and allowing the worries of the day to flood in.
  • snags. Recognise those barriers that stand in the way. In a world of scarcity, a snag (like taking a form home to fill out) can mean something worthwhile never gets done.
  • avoid frittering abundance by artificially creating some scarcity, such as interim deadlines.
  • recognise the value of slack.

Each of the lessons above is supported by this rich book full of examples. I thoroughly recommend a read by anyone interested in behaviour changes.


About Heather

I am an energy and climate change specialist with a background in industrial energy efficiency and climate change policy.
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3 Responses to Scarcity – the true cost of not having enough

  1. Pingback: Renewables for All | changing weather by Heather Smith

  2. Pingback: Overwhelmed – work, love and play when no one has the time | changing weather by Heather Smith

  3. Pingback: Is local electricity cheaper? | changing weather by Heather Smith

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