SCARCITY: THE TRUE COST OF NOT HAVING ENOUGH

Reviewed by Sudhirendar Sharma
Getting the most out of what we have!

Scarcity: The True Cost of Not Having Enough, by Sendhil Mullainathan and Eldar Shafir, Penguin, 2014

When an economist and a psychologist come together to undertake an intellectual endeavour, the outcome can shatter many myths about everyday living. Together they manage to explain the most fundamental problems in all walks of life viewed through the science of scarcity, which the authors claim is still in the making. The lonely are lonely, dieters are plump and the busy are busy because they are caught in the ‘scarcity trap’.

The authors stretch the notion of fiscal scarcity to include social scarcity and cognitive scarcity as well as scarcity of time and calories. The multiple implications of scarcity not only make us dumber, but cloud our cognitive abilities. Far from making people more effective, as many would believe, scarcity leaves us with reduced fluid intelligence and more impulsive actions. Not without reason, scarcity leads us to borrow, and pushes us deeper into scarcity. Using stories from daily existence and studies from diverse social settings, Sendhil Mullainathan and Eldar Shafir conclude that the feeling of ‘less’ distorts our vision and judgment.

Scarcity is loaded with fresh insights. The idea of scarcity offers clues to managing our lives better during abundance such that there is no slackness when scarcity confronts us. Scarcity can make us wiser provided clear-headed thinking about trade-offs is thoughtfully applied. After all, scarcity is largely an outcome of environmental conditions that can be managed. Scarcity should make us experts, even if in a limited manner.

In a way, the idea of scarcity offers good news because it can help us organize our lives better and design more efficient systems.

Scarcity is a real page turner, overflowing with fresh insights and simple suggestions to transform the way we live and manage ourselves. If you think traffic on the road is clogged, you have fallen into a scarcity trap. You may need to put on your ‘scarcity cap’ to wriggle out of it. The authors argue that if all the cars went at the same speed, not only would the traffic flow smoothly, but more cars could be accommodated. It is the variation in the speed of the cars that causes congestion, as drivers vie for limited space (a reflection of scarcity).

Scarcity is often associated with dire consequences.  But,  Mullainathan and Shafir consider it a perfect trigger to enhance our abilities to make better choices. Scarcity is a must read, brilliant and engaging.


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