How to overcome the “scarcity mindset”

How to overcome the “scarcity mindset”

We’re surrounded by scarcity.  The day starts with “I didn’t sleep enough.” Then the rush to get the kids fed and out the door is accompanied by the nagging feeling that as parents we’re “not present enough.” Next, a commute skimming articles on our phones and listening to podcasts at double speed. There’s too much to learn and “not enough time.” A coworker gets that coveted promotion implying there’s “not enough opportunity.” Therefore the new addition to the house will have to wait another year, because obvi, there’s “never enough house.” And as bed time approaches, it’s a race towards Inbox Zero. And what’s the last thought before your head hits the pillow? “I didn’t do enough.” 

How did this scarcity mindset become so pervasive? And how can we break out of this pernicious cycle and shift to a mindset of sufficiency and abundance?

Scarcity mindset: An origin story

Our hunter-gatherer ancestors lived in a world of scarcity. A world sans Amazon and DoorDash certainly qualifies as eat-what-you-kill, forcing our forefathers to compete for the scarce resources of food and shelter.

Evolutionary psychologists posit that natural selection has a singular concern: the proliferation of our genes. When I interviewed Robert Wright (the author of Why Buddhism is True) he explained that the “elusiveness of gratification” is a feature, not a bug of human design:

By pursuing ever-elusive gratification and trying to hang onto it, we do natural selection’s bidding—we seek the things that in the past would have contributed to genetic proliferation. We seek status, sex, material resources, and more and more of all of these things. The evaporation of the gratification they bring is natural selection’s way of getting us to keep pursuing them.

We see the influence of this survivalist mindset in our economic systems, ranging from Darwin’s “survival of the fittest” or Hobbes tying “self-preservation” to “self-interest.” In turn, scarcity reinforces zero-sum thinking, the destructive “I win, you lose” that masquerades as meritocratic competition.

But is the anger you feel when you get passed over for a promotion really the result of natural selection?

The three myths of scarcity

In The Soul of Money the activist and author Lynne Twist breaks down three myths of scarcity: there’s not enough, more is better, and that’s the way it’s supposed to be. Deconstructing each myth can help shine a light on how he can shift out of scarcity and into sufficiency.

Myth 1: There’s not enough

Each day, I speak to countless ambitious and hardworking professionals who feel suffocated by scarcity. And it’s not because they want the latest Benz or Sun Valley house. In fact, it’s quite the opposite. They feel like they’re walking on egg shells at work and beat themselves up over the smallest mistakes. In their minds, the slightest screwup (like a botched Powerpoint presentation) could spiral out of control and derail their careers. And in waiting for this imaginary shoe to drop they’re unable to savor their accomplishments, take risks and be present.

Living life’s “worst-case scenario”

I wrote about how so many “successful” professionals were prisoners to this catastrophizing mindset. In The Soul of Shame, psychiatrist Curt Thompson describes a successful marketing executive bracing for the day when his business would collapse and “he and his family would one day end up living in a box under a bridge.” Then there’s ABC news anchor Dan Harris who worried that his receding hairline would impact his camera-facing career. In 10% Happier he described his irrational tendency to “immediately project forward to an unpleasant future (e.g. Balding → Unemployment → Flophouse in Duluth).”

And recently one of my coaches, Andrew Taggart sent me the following note:

I, meanwhile, am beginning to count on my fingers the number of high-powered executives who have mentioned to me their fear of finding themselves in ‘the poorhouse’ someday. (I may have to rent some more fingers.)

As long as I’m not left behind

Setting aside our primal fears of survival, why is this feeling so common? Twist argues that scarcity imposes a “fixed pie” worldview and therefore someone’s going be left out:

Everyone can’t make it. Somebody’s going to be left out. There are way too many people. There’s not enough food. There’s not enough water. There’s not enough air. There’s not enough time. There’s not enough money. There’s not enough becomes the reason we do work that brings us down or the reason we do things to each other that we’re not proud of. There’s not enough generates a fear that drives us to make sure that we’re not the person, or our loved ones aren’t the people, who get crushed, marginalized, or left out.

But we know that this just isn’t true. Having a second child doesn’t cut your love for your first child in half. When a friend gets promoted, it doesn’t reduce the global supply of promotions by one.

But… the bonus pool?

I know, there’s one thing that’s certainly fixed: the year-end bonus pool. And yes, at the end of the year if Jill gets an additional $10, that means Jack may miss out on $10. But bonus pool infighting only matters if you’re playing the short game. It’s noise. If you’re playing the long game,  your efforts will undoubtedly rise to the top.

Take the basketball coaching legend Dean Smith from the University of North Carolina. In Give and Take organizational psychologist Adam Grant describes how Smith “acted against his own interests” by encouraging Michael Jordan to leave the program early to enter the NBA draft. Grant adds that Smith had a rule:

‘We do what’s best for the player out of season and what’s best for the team in season.’ As NBA salaries skyrocketed, Smith encouraged every player who had a good shot at being picked in the top five or the to leave college early and secure his financial future, as long as he promised to come back and finish his education later.

Think about that. Basketball is a sport where five players field the floor; if one leaves it’s 20% of your output. (Furthermore, UNC had some of the best players in the country.) Nine athletes left, and seven made good on their promises. “Putting players’ interests first [helped] him recruit top talent and build trust and loyalty” explained Chris Granger, former executive vice president of the NBA:

Talented people are attracted to those who care about them. When you help someone get promoted out of your team, it’s a short-term loss, but it’s a clear long term gain. It’s easier to attract people, because word gets around that your philosophy is to help people.

Smith’s example shows that situations can initially be perceived as zero-sum are actually win-wins when you expand the horizon.

Myth 2: More is better

We recently moved to Los Angeles which forced us to dabble in the real estate scene (as renters, not buyers). And a strange thing happened. The square footage of our new home would infiltrate its way into each conversation. Some friends had more, others less, but everyone knew (thank you Zillow) to the precise square foot the size of their home. And of course, whose was the largest. The size of our homes is a powerful example of how we become Machines for More. Whether it’s Amazon purchases, new Apple products, or our bank accounts, more is better. Twist argues that More is Better is our logical response to the fear of not having enough, but it’s not without consequence:

More is better drives a competitive culture of accumulation, acquisition, and greed that only heightens fears and quickens the pace of the race. And none of it makes life more valuable.

Can more actually be worse?

I have a friend who used to own shares of a personal jet. (I promise, this anecdote will become relatable.) He owned a set amount of flight hours per year, in a use-it-or-lose-it arrangement. September would roll around and these unused hours would start to stress him out. So he’d “force himself” to book a flight to some exotic locale, by himself (he was separated) where he would then have to incur a whole slew of lodging and food costs. But here’s the catch: the entire time, all he really wanted to do was watch Netflix and eat wings in the comfort of his own home.

I know. Cry me a river. But consider your own life – are there actual instances where More is Worse? Do you realize that not only does a BMW cost way more than a Toyota up front, it’s also three times as expensive to regularly service? Are you working out more because you chose Equinox over 24 Hour fitness? Is the guest room in your house used enough to justify all the extra furniture costs? Is it possible to leave your kids too large of an inheritance?

The marginal utility of a dollar

We’d all instantly accept 30% more in our bank accounts – but would that actually change our internal satisfaction? Would we then triumphantly proclaim that our quest for more had come to an end? It turns out that we’re really bad at estimating the satisfaction that next dollar (or purchase) can bring us.

Warren Buffet has a bajillion dollars. If you gave him another $100 or $100 million, his happiness would be unchanged. (In fact, he probably wouldn’t even notice.) His utility (i.e. how much happiness the next dollar brings him) is close to zero.

But who cares? As one of the richest people in the world, he’s an outlier; he’s not caught up in the every day grind, like us mere mortals. Behavioral economist Daniel Kahneman has shown that emotional well-being (defined as the presence/absence of emotions ranging from happiness, sadness, anxiety, stress and worry) increases with income, but flatlines once you reach $75,000.

Now I know all my fellow Angelinos, Brooklynites, and Londoners are giving the double eye-roll. It’s hard to cover rent at that amount, so don’t even get me started on well-being! Point taken.

So, instead look at research from Harvard Business School professor Michael Norton who asked 2,000 millionaires two questions: How happy are you on a scale of 1-10? How much more money would it take you to get to a 10?  It turns out that “all the way across the income spectrum, basically everyone says they’d need two or three times as much [to be perfectly happy].” (Source: The Reason Many Ultrarich People Aren’t Satisfied With Their Wealth)

You’re FIRE’d

You’ve probably heard about the FIRE movement, in which ambitious millennials strive for Financial Independence and Early Retirement (often by age 30). To me, FIRE is less of a personal finance strategy and more an outright rejection of More is Better. One of its core principles is “simplifying and redesigning your lifestyle to reduce spending” which is then accompanied by the stern reminder: “Your wants and needs aren’t written in stone, and less spending is powerful at any income level.”

Myth 3: That’s the way it’s supposed to be

Finally, there’s the last myth that binds it all together: That’s the way it’s supposed to be. It’s a dangerous blend of laziness, resignation and conformity. It entrenches us into our spending habits and professional decisions and can leave us stuck and comfortably numb. Twist describes this last myth as the hardest to identify and transform:

If you can’t let go of the chase and shake off the helplessness and cynicism it eventually generates, then you’re stuck. If you’re not willing to question that, then it is hard to dislodge the thinking that got you stuck.

Here’s my challenge to you: try letting go of these myths for even a brief moment. Notice the freedom and possibility that arise. Accept, as Twist says, that you have agency in “the way we choose to act and what we choose to make of circumstances.” You have enough. You are enough.

Note: I’ve worked with numerous professionals on shifting out of a scarcity mindset. Hit me at khe [at] radreads [dot] co to learn more.

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  • Why Buddhism is True, Robert Wright: An evolutionary psychologist’s take on self-management and the origins of our anxiety.
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Khe Hy
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Khe Hy is the creator of RadReads.