Scarcity summary

When you’re hungry, food is all you can think about. This is because food – at that moment, even only for a few minutes – is scarce and the need to satiate your appetite is almost overwhelming. Even if we aren’t aware of it, when we experience scarcity of any kind, not just the kind regarding our biological needs, we become absorbed by it, obsessing over what we feel we lack.

Toward the end of World War II, as the Allies advanced further into German-occupied territories, they faced the problem of bringing back concentration camp inmates from the edge of starvation. To solve this problem, the University of Minnesota conducted an experiment with 36 male subjects in which the subjects were first starved and then underwent various feeding regimens. The findings helped the camp survivors, and also revealed some fundamental insights.

As you look through your wallet, you stumble across a coupon with no expiration date for a free meal at a restaurant. This time, like every other time you see your coupon, you think: “Eh, I can use this any time. Not today, but maybe next week.” Consequently, it never gets used.

This is actually quite common: coupons with no expiration date are less likely to be used than those that have one. But why?

The deadline for your presentation is tomorrow. But your daughter has her city championship softball match tonight. Like a good parent, you go to her match, but you just can’t focus on the game, can’t enjoy yourself – your mind keeps wandering back to that presentation. Why can’t you just enjoy the moment?

This is because scarcity taxes our bandwidth and, as a result, inhibits our most fundamental capacities, such as concentrating on that softball game.

How many times have you felt like you’re playing catch-up with your debts, only to find yourself in exactly the same hole as you were before?

Scarcity is partly the result of an aspect of human behavior known as the scarcity trap. When we fall into the scarcity trap, two things happen: we constantly juggle, moving from one pressing task to the next, and yet are continually one step behind.

Have you ever poured from an unusually shaped bottle, only to find there was far more liquid inside than you thought was possible? This is because your perception was wrong – if you were to do it again, however, you’d probably measure it more accurately. Indeed, expertise – learning from our experiences – can alter our perception.

For instance, if a layperson were to pour you a shot of whiskey from each of four differently shaped bottles, you’d likely end up with four different-sized shots. However, an experienced bartender is far less likely to be influenced by the bottles’ shapes, thus making all four whiskey shots uniform.

How many times have you considered taking out a loan when your cash has run out? While you’re certainly not the only one to toy with the idea, it’s actually the most short-sighted thing you can do.

Unfortunately, scarcity causes us to make rash decisions with little regard for their long-term consequences. When we’re intensely focused on putting food on the table, for instance, we’re less effective at planning for the future. Of course, planning in general is difficult for many, but scarcity makes the problem worse.

Whether it’s improving the lives of the poor, managing scarcity in organizations or dealing with scarcity in everyday life, the strategy is always the same: change the programs, add in slack and reduce bandwidth.

Whatever the area, you can always improve your program in a way that mitigates the effects of scarcity on everyone. Take university students, for example, who often have to manage the scarcity of time. They often miss classes because of deadlines they have for projects for other classes, but this could be solved with a simple restructuring of the classes themselves.