Scarcity: Why Having Too Little Means So Much, by Sendhil Mullainathan and Eldar Shafir
Reviewed by Richard B. Grose
In 2013, Sendhil Mullainathan, a Professor of Economics at Harvard University, and Eldar Shafir, a Professor of Psychology and Public Affairs at Princeton University, published Scarcity: Why Having Too Little Means So Much. It explores what the authors call the “scarcity mindset,” which afflicts a person whenever there is too little of a vital resource, whether that resource is money, time, or friends. Although it seeks to delineate a common psychology among all three situations, it focuses mainly on the problem of too little money, putting forward a view of the “scarcity trap” as a major constituent of the psychology of poverty. One of its main goals is to describe a psychology of poverty that moves past previous explanations for poverty, such as the idea that a “culture of poverty” perpetuates itself as a value system (as first argued by Oscar Lewis in 19591) or the idea that the poor are poor because of a genetic deficiency (as argued by Richard Herrnstein and Charles Murray in 19942). As an effort to open up the question of the psychology of poverty beyond such theses, Scarcity, for this general reader, is a laudable contribution to an important public discussion. Nevertheless, as a psychology it represents a theory of mind, thus opening it to comment from psychoanalysis, a field that has been developing a theory of mind for over a century. In the first part of this review, I will lay out the idea of the authors’ psychology of poverty as one with significant strengths and one large weakness. In the second part, I will discuss that weakness.
The central thesis of the book is that scarcity preys on the mind so as to reduce the mental energy available for life, needed specifically for problem solving, emotional flexibility, and self-control. When the mind is occupied by questions of how to pay pressing bills, how to find time for too many obligations, or how to deal with having too few friends, then there is less mind available for the above-mentioned capacities. In one study, sugarcane farmers scored 9 or 10 points higher on IQ tests after a harvest, when they were flush with cash and therefore had few money worries, than before a harvest, when they were strapped and struggling. By reducing your cognitive capacity, scarcity traps you, the authors argue. The condition reduces your ability to get out of the condition. They introduce the concept of tunneling as the process of focusing on the scarcity situation in a way that causes you to neglect other important parts of reality. They develop the concept of “bandwidth,” a term taken by analogy from digital technology, in this case denoting the ability of the mind to exercise these capacities. Diminished functioning as the result of scarcity they term a “bandwidth tax.”
In psychoanalytic terms, these capacities are ego functions. Indeed, the concept of bandwidth tax could conceivably be useful in clinical work as a descriptor for a patient who is distracted by something or is blocked from engaging with something in the usual way. I can imagine a treatment in which analyst and patient together employ a concept of compromised bandwidth to describe such phenomena as diminished alertness, ability to think, and emotional flexibility. Of course, in a psychoanalytic treatment such a term would only serve to set up the question: What is going on? In this case, the idea of bandwidth tax is mostly used to explain the suboptimal functioning of poor people.
As a description of the psychology of poverty, the scarcity trap and bandwidth tax make palpable the experience of a poor person, and they allow policymakers to think about that experience in ways that avoid condescending or crudely negative characterizations. The weaknesses of the book, though, begin to appear when the question of how to address these difficulties is raised.
One example makes the point. The authors describe at some length the situation of vendors in an open-air market in India. These vendors are in a scarcity trap because they only make 100 rupees a day, but in order to borrow the 1,000 rupees (about $20) needed to purchase the stock for sale, they have to pay 50 rupees in interest, or half of their gross earnings. We learn that if a vendor were able to set aside only 5 rupees each day, then at the end of 30 days, with compound interest, he would have accumulated the 1,000 rupees that he now is required to borrow. The authors note that although all of the vendors could in theory do this, none do. To see what might be involved in exiting the scarcity trap, the authors conducted the following experiment. They assembled a group of vendors, and for one-half of the group they simply followed their finances during the course of a year, but to the other half they gave each 1,000 rupees, thus making it unnecessary for this group to borrow the money, and immediately doubling their daily income. The authors wanted to test various theories for what keeps people in a scarcity trap. What they discovered was that not immediately but over the course of the year one by one the vendors in the experimental group fell back into their original condition, namely having to borrow 1,000 rupees every day at 50 rupees interest.
Why is this, the authors ask?
They respond, “The core of the problem is a lack of slack.”3 If a person has slack—that is, unused capacity—then when shocks (unexpected and unplanned-for claims on resources) come along, he or she can respond without impairing future functioning, e.g., by borrowing. This is how the authors attempt to understand why the vendors fell back into their dependent position in the course of a year, having been allowed to be free of debt at the beginning.
“We should deepen our notion of scarcity,” they say.4 “The present discussion . . . says that periods of scarcity can elicit behaviors that end up pulling us into a scarcity trap. And with scarcity traps, what would otherwise be periods of abundance punctuated by moments of scarcity can quickly become perpetual scarcity.”
They conclude, “This discussion highlights the need for instruments for buffering against shocks.”5 It is at this point in their account that the absence of any concept of the unconscious becomes glaringly evident, for they can only conceive of their subjects from an ego point of view. From that point of view, vendors are always trying to do better, and if they fall back into previous traps it’s because they did not have sufficient “instruments.” The authors cannot imagine that there might be something powerful operating within these vendors that needs to be in a scarcity trap or that finds it emotionally difficult to exit the scarcity trap.
A psychoanalyst, of course, has no difficulty in imagining this. It is what she deals with every day. Clearly these two professors, one of economics and the other of psychology and public policy, have no interest in imagining unconscious forces that would make economic improvement difficult, nor do we live in an intellectual world in which the existence of the unconscious is generally accepted. Indeed, positing unconscious forces would immeasurably complicate their task. If poor people are poor partly because unconscious forces make it hard for them to change, what then? If the trapping force in the scarcity trap is partly unconscious, what remedy could address the problem? Should the poor be psychoanalyzed?
Now, the idea of providing free psychoanalysis to poor people on a massive scale is a part of the history of psychoanalysis, and it has been tried, briefly.6 Without intending it, the authors have laid down significant elements of the argument for doing just that. By describing the impairment of ego functioning so clearly, they unwittingly reveal the absence of a theory of the unconscious.
That absence is even more palpable in a later chapter called “The Elephant in the Room,” which concerns the ways in which people living in poverty do not act in their own clearly defined best interest. The examples they give are patients who not take medications that are essential to their health; farmers who do not weed despite knowing that weeding dramatically increases crop yields; and finally, parents whose lack of bandwidth makes it hard for them to be good parents. Generalizing from “decades of research,” the authors say,
[Parents living in poverty] are harsher with their kids, they are less consistent, more disconnected, and thus appear less loving. They are more likely to take out their own anger on the child; one day they will admonish the child for one thing and the next day they will admonish her for the opposite; they fail to engage with their children in substantive ways; they assist less often with the homework; they will have the kid watch television rather than read to her. We now know more about what makes for a good home environment, and poor parents are less likely to provide it.7
Their point is that the poor do not have the freedom of mind, the “bandwidth,” to be good parents. The authors intend this to be a description of one more tragic consequence of the scarcity mindset. However, if they had had any concept of the unconscious—more generally, if psychoanalysis had not disappeared from American intellectual life—they could not have written that paragraph without wondering about the long-term effects of such parenting on those children. For if this is the parenting these children receive—inconsistent, unengaged, with little apparent libidinal investment in them—then once they become adults, where would they be expected to get the positive self-concept that would allow them to transcend their parents’ situation and behavior?
Without intending to, in writing the paragraph above the authors were actually answering the earlier implied question about why one generation repeats the poverty of their parents. A mass diagnosis may be problematic, but we know that the repetition compulsion is very strong. We know that in order not to feel completely abandoned, children of disengaged, seemingly unloving parents identify with treating their own children this way, thus perpetuating the cycle. Trauma is transmitted from generation to generation, as psychoanalysis has been exploring for decades.8 We know that, for this reason, the hardest parenting to transcend can be precisely inconsistent, disengaged, and apparently unloving. The predominant tendency in situations where children do not feel loved is for them to identify with their parents and to identify with precisely those characteristics in their parents that are most difficult. They repeat this parenting, both by becoming like their parents themselves and by resisting a transformation that would mean leaving their parents behind, economically and emotionally. This is well known in psychoanalysis and is clearly called for in the account put forward in Scarcity, and yet these insights are not found there.
It is always striking to observe that an explanation that is well documented and well understood in one field is absent in an adjacent one. In this case, two professors seeking to address the causes of poverty develop a theory of mind in which psychoanalysis is not reflected at all. In one sense, this is not a surprise; in another sense, it should be. Psychoanalysts for decades now have watched while allied fields such as psychiatry have jettisoned psychoanalytic understandings. It’s been as if mining engineers suddenly persuaded themselves that chemistry was irrelevant to their work and that ores, gases, and effluents could be adequately understood by observing and smelling them; no account was necessary of what might be going on beyond what is perceivable.
The one-sidedness of this account of the mind—acknowledging only the ego—can be seen in the authors’ frequent use of a term of art in marketing and economics: “top of mind.” Top of mind denotes a person’s first association in response to a category or a brand. Marketers want their product to be top of mind when people set out to buy something. For example, if they are marketing Clorox bleach, they want you to think of Clorox whenever you think of bleach. But if there is a top of mind, where’s the bottom? These authors write as if the unconscious either does not exist or is unimportant. The phrase itself suggests the one-sidedness of their approach. To paraphrase Ronald Reagan: Where’s the rest of the mind?
Lewis, O. (1975). Five Families: Mexican Case Studies in the Culture of Poverty. New York: Basic Books.
Herrnstein, R. J., & Murray, C. (1996). The Bell Curve: Intelligence and Class Structure in American Life. New York: Free Press.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why Having Too Little Means So Much. New York: Times Books/Henry Holt and Company, p. 135.
Mullainathan & Shafir, p. 137.
Mullainathan & Shafir, p. 137.
Danto, E. (2005). Freud’s Free Clinics: Psychoanalysis and Social Justice, 1918-1938. New York: Columbia University Press.
Mullainathan & Shafir, pp. 152-153.
Faimberg, H. (2005). The Telescoping of Generations: Listening to the Narcissistic Links between Generations, London and New York: Routledge.