Scarcity: Why Having Too Little Means So Much

by Braden

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My Thoughts

Key concepts I like:

  1. Bandwidth: A measure of mental capacity that includes things like fluid intelligence and executive control.
  2. Tunnel vision: Good for focus, bad for decision making. It lowers fluid intelligence and executive control functions, leading to more shorterm-ism and impulsiveness.
  3. Scarcity trap: What happens when we get tunnel vision that leads to mental juggling that taxes bandwidth, which leads to more stress and poor decision making.

We’ve all made decisions in times of stress only to look back and think “why did I do that?”. I love this book because it provides keen insights into the psychology and neuroscience of this part of the human condition — making bad decisions under stress.

The main point is that the brain is designed in a way that leads to tunnel vision when we’re under stress, which causes a bandwidth tax that can result in a scarcity trap. When in this state we make sub-optimal (i.e. bad) decisions. Getting out requires planning and discipline — i.e. willpower. And evidence shows that willpower is a muscle that depletes as we use it. The problem is that people living in a constant state of scarcity (e.g. poverty) suffer a larger bandwidth tax constantly depleting their willpower leading to a downward spiral of bad decision-making.

The scarcity mindset extends to organizations as well in the form of constant firefighting. Firefighting leads to predictable errors: important but non urgent problems are neglected. As a result, structural problems never get fixed. The problem with this is that we don’t see those problems until something pressure tests us and when that happens it normally carry bigger downsides and the type of problem-solving is more time consuming and expensive.

The key thing we can do to combat getting suck in the scarcity trap is to prepare for it through habit formation. This is hard because most good behavior requires vigilance (i.e. persistent repetition) while bad behaviors are often one time actions. And non-adherence, the vagary of human behavior, leads to one stumble after another towards achieving our goal of getting out of the scarcity trap!

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