Scarcity: Why Having Too Little Means So Much. By Sendhi Mullainathan and Eldar Shafir. Time Books, Henry Holt & Company LLC, New York, NY

Scarcity is about a perceived mismatch between what is available (supply) and what is desired (demand). You pay more attention to things associated with scarcity, whether it’s scarcity of guesses, friends, time, or income. Scarcity creates a mindset affecting what we notice, how we decide and how we act. A bit of scarcity can be productive: it concentrates the mind. Too little scarcity (i.e., abundance) can lead to procrastination and general slackerdom: why do today when there’s no hurry? Why be upset about a loss when there’s a lot more where that came from? Too much scarcity (e.g., poverty) can lead to short-term thinking, impulsiveness, and tunnel vision. Extreme scarcity taxes our cognitive bandwidth: executive functions and self-regulatory resources take a real hit.

So far, so good. The authors’ thesis is compelling and well-supported and could become a prolific generator of testable hypotheses. The scarcity construct could also be profitably applied to fields of inquiry beyond economics and psychology. For instance, it would be fascinating to study how the sense of scarcity (too much or too little) influences mate-seeking behavior in areas with lopsided sex ratios.

On the other hand, the authors overstate their case. They minimize the effect of other factors (especially anxiety and environmental unpredictability) on human behavior, at one point saying that the scarcity-induced bandwidth tax “explains everything”, referring to the short-term thinking of poor farmers. The authors also indulge in a lot of “rathering” (to use Daniel Dennett’s term), e.g., saying lack of skills is not a problem for poor people; rather, it’s just that scarcity has overtaxed their cognitive bandwidth. Why not both? After all, if scarcity involves a perceived lack of resources and skills are a personal resource, then possession of skills reduces scarcity.

The authors’ tunnel vision regarding scarcity makes some of their policy suggestions woefully misguided. For instance, since the scarcity mind-set “explains everything”, they say farmer training or new crops will do little to help poor farmers. Excuse me? In the 1930s, in our own country, poor farmers made tremendous strides in productivity exactly through technical education provided by the Department of Agriculture.

(Of course, to the extent that improvements in skills, crops and technology encourage consolidation of small farms to achieve greater efficiencies, poor farmers would still suffer hardship through lack of competitiveness with larger farms. But the problem has shifted from poverty per se to the issue of whether farming small plots of land can ever be anything other than a marginal mode of existence. That is a complicated matter involving various trade-offs and is beyond the scope of this review.)

And then the authors pooh-pooh interventions to increase self-regulatory strength (i.e., "willpower"), saying there’s little evidence supporting the efficacy of such training. Say what? There’s a ton of empirical support for these kinds of interventions. For a good review, see Self-Regulation and Personality: How Interventions Increase Regulatory Success, and How Depletion Moderates the Effects of Traits on Behavior.

Bottom line: I still recommend this book. While the authors exaggerate its importance, the scarcity mindset hypothesis still has lots of explanatory value and is an important consideration when formulating possible solutions to difficult societal problems.