While OpEdge is on a two-week hiatus, we are running some of the more evergreen columns from past years. This blog entry originally appeared on September 15, 2013.
Thanks to Cass Sunstein for reviewing Scarcity: Why Having Too Little Means So Much in the latest New York Review of Books. In Scarcity, Sendhil Mullainathan and Eldar Shafir collect and analyze an impressive amount of research to demonstrate that those who suffer a scarcity of a resource—say food or money—dedicate more of their brain to addressing that scarcity, thereby degrading their ability to attend to their daily tasks, in school or on the job.
According to Mullainathan and Shafir, scarcity “puts people in a kind of cognitive tunnel, limiting what they are able to see. It depletes their self-control. It makes them more impulsive and sometimes a bit dumb. What we often consider a part of people’s basic character—an inability to learn, a propensity to anger or impatience—may well be a product of their feeling of scarcity,” to quote Sunstein. The book cites a ton of empirical research that shows that the effects of scarcity cut across all possible types of scarcity.
The most striking study mentioned in the review tested Indian sugar cane workers before the harvest when they were broke and after the harvest when they had lots of money. The difference in scores amounted to 9 or 10 points on an I.Q. test, which measures certain intellectual capabilities correlated with success in school and in professional employment. On an I.Q. test, ten points means a lot: for example, about 28% of the population scores between 106-115, while only 9% of the population scores between 116-125.
In other words, not only do rich and upper middle class children have the advantages of classes and lessons, summer camps, trips abroad, private tutors, SAT prep courses and the doors that money and business contacts can offer. The wealthy also have an inherent advantage in that their brains are not drained by scarcity concerns as the brains of poor children are. The easiest way to improve our educational system would be to end poverty, which would enable formerly poor children to focus their brain on learning and not on the anxiety of not knowing when the next meal will be.
A few years back, the mainstream media and politicians were completely enamored by an article titled “Growth in a Time of Debt” by Carmen Reinhart and Kenneth Rogoff, which concluded that countries with public debt greater than 90 percent of GDP suffered measurably slower economic growth. In This Time Is Different, the two right-wing economists ostensibly fleshed out the theory with examples across the centuries. Mainstream politicians and journalists throughout the world embraced this “new discovery,” using it to bolster assertions that we had to deal with the debt instead of pumping money into the economy.
The problem was that Reinhart and Rogoff miscalculated in a number of places and even made typographical errors. When their bad math was corrected, it was found that there was no correlation between levels of debt and economic growth.
Many people wanted to believe Reinhart and Rogoff were right because they wanted to cut the budget, regardless of the pain and the economic havoc it caused. Of course it didn’t work out—Europe’s austerity program backfired and the U.S. limited “rescue” of its economy produced uneven and weak results. Through it all, inequality continued to grow, especially in the United States. The distribution of wealth in this country is now less equitable than it has been in more than in a century.
As of this writing, a Google key word search yields about 3,000 mentions of Scarcity, which is not even a drop in the ocean of web pages floating around cyberspace. It’s still too early to tell, but I’m betting the mainstream news media is going to ignore Scarcity for the most part and few politicians outside maybe Bill De Blasio will reference it.
But imagine if Scarcity captured the imagination of politicians and pundits the way that Reinhart & Rogoff’s bogus research did, or the way Michael Harrington’s poignant expose of poverty, The Other America, did in the early 1960’s?
What if our various governments started to create public policies and new laws to address the implications of Scarcity: Why Having Too Little Means So Much? If Scarcity is true (and the Sunstein’s extensive review makes we want to read it as soon as I can), that puts a while new light on Republican efforts to decrease funding for food stamps and unemployment benefits. The very nature of poverty distorts and weakens the thinking process, so that once people fall into poverty it is very hard to escape. It makes sense then to be as generous as possible with these benefits in times of economic distress, to keep as many people out of poverty as possible.
Widespread knowledge of the findings by Mullainathan and Shafir would lean the debate over minimum wage and health care decidedly to the left, as think tank pundits and government policy makers quoted the book to assert the need to protect Americans from the negative effect of scarcity in general, and of medical care in particular.
Scarcity also serves as an epiphany for the great challenge facing the United States in the area of education. Rich people are spending more to educate their children while their state and federal representatives continue to cut budgets for public schools. Meanwhile, a college education has become a major drain on the finances of most families. Equal opportunity movements focused on voting and jobs in the 20th century. In the 21st century, the real battle ground for equal opportunity may be over education.
For the past 30 years, we have passed laws and followed policies that increase the number of people facing scarcities of money, food, health care and now education. We have in effect degraded our intellectual stock by putting more panic into more people. Creating a more unequal society has weakened our collective ability to learn and to work. If our leaders believed the message of Scarcity they would pursue an entirely different set of policies that would resemble the policies our nation pursued in the 1950’s, 1960’s and early 1970’s. You know, when we had general prosperity, a lower rate of poverty, a more equal distribution of the wealth, strong unions, mostly great public schools—and, not coincidentally, much higher taxes on the wealthy.