Book Review: Scarcity


Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir

There is no shortage of material in the media blaming those in poverty for their situation. The poor are accused of ineffective parenting, inefficient budgeting and poor decision making. Those of us offended by this anti-beneficiary rhetoric can easily find any number of examples of welfare recipients we know who do not fit this description. In my research with lone mothers I have seen women parenting with more patience than I could ever dream of possessing, have heard examples of budgets creatively stretched to accommodate all of a family’s needs, and witnessed the making of some very rational, well thought out decisions. Yet there is also research linking poverty to risk of child-abuse and neglect, of increased reliance on cash or payday loans, and a plethora of bad decisions (e.g. poor self-care).

While many in the media may use this research as evidence that poor choices result in poverty, implicitly (or explicitly) holding the poor accountable for their situation, Mullainathan (a Harvard professor of economics) and Shafir (a Princeton professor of psychology) argue the opposite. Poor choices do not lead to poverty: instead, it is poverty that leads people to make poor choices. Scarcity, they contend, impacts on a person’s ability to think. Simply asking poorer people to consider a hypothetical $1,000 car repair, the authors demonstrate, can change their performance on subsequent intelligence tests by 13 to 14 IQ points. This is a significant amount in most measures of IQ, moving someone from “superior” to “average” IQ, or from “average” to “borderline deficient”. Distracted by concern about the scarcity of money, people have less mental resource to concentrate on other aspects of their lives. Furthermore, the authors propose, focusing the mind on specific economic crises, not only affects a person’s intelligence, but also reduces their executive control, constraining automatic responses and making them more impulsive. In another study subjects who had their minds focused on memorising an eight-digit number were unable to maintain their social composure when offered food that they found disgusting. Focusing intently on a task made that person very efficient at that task (in this case memorising a long number) but it consequently lowered their ability to restrain themselves from making inappropriate comments.

The authors don’t just consider scarcity in relation to poverty. They argue their theory of scarcity can be applied to time-scarcity for busy people, food-scarcity for dieters, and scarcity of social contact for lonely people: people’s minds function in a different way when they feel they are missing out on something. This unified theory of scarcity is intriguing, but seems a little piecemeal in places. Had the authors focused on poverty alone, building an argument around their own original research, it may have felt more robust. That aside, the two insights noted above – that scarcity of money may impact a person’s fluid intelligence and their executive control – offer an antithesis to the prevalent culture of blaming those in poverty for being poor. The authors’ message is clear: resist the urge to judge those in poverty, in the same situation you’d no doubt make the same mistakes.


  1. Great review Claire. I am reading it once Ro has finished!
    Most of my clients are surviving on benefit and day to day and have to constantly justify why they are on it. They are pushed into work by Winz when they are not mentally ready. This only adds to their distress and makes recovery take even longer.

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