Author: Elma Berisha, Independent social and industry researcher based in Kuala Lumpur
It would not be far-fetched to propound that much of the proven wisdom circulating in realm of motivational psychology and self-help craftsmanship at individual or business level, may potentially extend to and find fruition on a social scale. At times, perhaps even more so to that effect. For instance, communities and societies with closed, xenophobic mindsets are far more detrimental than standalone individuals experiencing similar issues. Thus, the widely-known contemporary mantra ‘Operate from a mindset of abundance not scarcity’ resonates well with my understanding of the scarcity principle in social psychology. However, I was staggered to come across the news that ‘the principle of scarcity’ is seen as the bedrock of modern conventional economics. The British economist L. Robbins has defined economics as the science of scarce resources. This scarcity-based definition is widely accepted today, although, when it appeared in 1932 provoked controversy. In 1962 the American economist M. Friedman endorsed Robbins’ definition, while in 1971 another American economist G. Becker published his ‘Economic Theory’, in which he defined economics as ‘the study of the allocation of scarce means to satisfy competing ends’. The bottom line here is that, the conflict between limited resources and unlimited human needs forms the basis of conventional economics. Perhaps this quote by the American economist Th. Sowell would sum it up: ‘The first lesson of economics is scarcity: there is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics’.
In economics, social psychology as well as in the domain of personal development, the idea of how perception of scarcity stirs things up comes across as appealing. This as far as the interplay between demand and supply in relation to scarcity is concerned. Needless to say human beings knew for ages that the harder certain resources are to obtain, or the scarcer they get, the more in demand they become, and vice versa. Today’s market advertisers and price strategists know this all too well. However, it is one thing to rightfully acknowledge the role of scarcity perceptions in influencing human behaviour, among other innumerable factors; it is quite another to setting it as a default foundation of all human economic activity! Moreover, this is a question of being able to distinguish between what is naturally heritable to human species versus what is socially-constructed or could be culturally cultivated over time. In these instances whereby what’s socially-constructed is taken for natural, many often the big picture is thus turned on its head: what’s periphery becomes the centre and what’s a partially contributing factor becomes the main axis. Parallel instances with scarcity vs abundance mindset can be found in the treatment of other dichotomies such as conflict and competition vs cooperation and alignment, monopoly and control vs sharing and solidarity, trust and social capital vs social deficit and distrust, and more. Typically, the narrative is tilted towards genetic predisposition for the side that stirs trouble, hence, extra efforts are presumed to be allocated to socially regulate it. As it stands, what we have here is not an argument against the claim that these are all part-and-parcel of our social and market realities; rather, to emphasize the need and the opportunity to recast the whole discourse in more positive mould. There is everything to win and nothing to lose if we socially and culturally, at least for nurturing and developmental purposes, conventionally emphasize the positive side of the equation.
And this is just what entrepreneurial and motivational gurus have been doing for quite some time: ditching the scarcity mindset and couching others to do the same. Tony Robbins, an acclaimed life-couch guru and a successful business strategist has figured: ‘You never get beyond scarcity, you have to start beyond it’. It is motivational psychology 101 that ‘the only scarcity we face is in our own minds’. The scarcity mindset focuses on limitations and obstacles, while abundance mindset focuses on what’s available from accessible resources and feasible solutions. Acknowledging that not all needed resources may be available at a certain point in time, the person with an abundance mindset sets to leverage on the existing resources. The abundance mindset operates from a position of possibility, while the scarcity mindset operates from a position of impossibility. The scarcity mindset defines everything through not-enough psychological lenses, hence, nothing will ever be satisfactorily sufficient to accomplish anything, unless the not-enough attitude is changed. This applies across the whole spectrum of resources: time, energy, wealth, knowledge, networks, and more. Changing the scarcity mindset to an abundance one does not change the objective reality around the individual in a deus ex machina fashion, but it definitely and significantly changes it in the long run.
Just as individual mindset creates the reality of the world around a person, so does the culture of a group, a community fashion their surrounding ecosystems. Oftentimes, scarcity is perceptual in nature. This including the perceived scarcity at consumer level. On the same footing, the objective scarcity is what we create in our socially-constructed, not-so-level-playing fields. In a scarcity modus operandi there is never enough to fulfil any plan; if it appears that there is enough today, yet, all sorts of scarcity potentialities are haunting the not so distant future. Financial growth targets are moving targets, never to be completely reached. In a scarcity mindset there is no win-win, for in a world with scarce resources and limited opportunities, any one’s win spells loss for some other. Accordingly, market segments, groups and countries are supposedly fighting for a fixed quantity of diminishing resources, and if generations of children grow up with this Hobbesian mindset of brute competitiveness, it cannot bode well for long-term prospects of economic sustainability and societal wellbeing. Ultimately, like every other systemically nurtured and reinforced culture, it turns in self-fulfilling prophecy at macroeconomic level. Which is another way of saying that, at a level that affects lives of millions of people, scarcity is mainly artificially created, either through the way distribution of wealth and resources is handled, or through induced financial crisis, or through wars that destroy physical goods and natural resources, and so on. In the same vein, perpetual growth business models can be seen as both cause and effect of engendered scarcity realities. Weighty criticisms has already been raised against both growth-obsessive economies and scarcity-driven policies at both corporate and social scale.
The Holy Qur’an’s emphasis on charitable giving, sharing, creative collaborating and healthy competition, as opposed to hoarding, lack of solidarity and scarcity-driven competition is monumental. In multiple instances reference is made to increased multiple returns for charity behaviour and admonishment of hording practices. So awe-inspiring and plentiful are the abundance metaphors in its verses, that the below has been etched on my memory forever:
“Example of those who spend their wealth in the way of Allah is like a seed [of grain] which grows seven spikes; in each spike is a hundred grains. And Allah multiplies [His reward] for whom He wills. And Allah is all-Encompassing and Knowing”. (2.261)
In fact it was this verse that triggered my initial pondering on scarcity economics. Verses like this have been a firewall against any scarcity-mindset for ages. The spiritual principal of abundance promotes the belief that not only is there enough to go around, and that the planet has room for us all to coexist, but also mandates people to share what they have. Traditionally Muslim communities, as many other traditional communities, have been very giving and sharing. Giving and sharing was a way of life, not just to say, an isolated belief, devotional attitude or an obligatory ritual. Helping others, not only with monetary resources but all sorts of resources and social support, has been proven time and again as best practice for a scarcity-proof karma.
The above Qur’anic abundance metaphor of multiplier effects for charity endowments, may inadvertently remind one of the Keynesian multiplier: short-term government spending boosts the economy by more than what is spent. This once well-accepted model envisages a virtuous circle with government spending stimulating direct and indirect employment and increased consumer demand, which in turn will contribute to further employment and economic growth. However, the scarcity-defined conventional economy may account for the opprobrium attached to Keynesian model, just as the one directed at the welfare state. On the contrary, decades-long austerity policies are a brainchild of scarcity school of thought. Mounting evidence points to its failure. But, failure may not be sufficient reason to revisit certain deeply entrenched discourses. For instance, there are those that consider the so called Malthusian trap as the precursor of scarcity-driven economics. The infamous Malthusian trap maintains that population growth dooms societies to poverty. As it turned, his model was out of date working with land resources and agricultural system in mind, failing to account that human creativity in terms of new production models ie industrial technology would offset the scarcity of land, as it did. This is just an example. Malthus was wrong but his ideas have resurfaced in the shape of today’s overpopulation myth edging the limits of capacity of Earth and its natural resources. As many are trying to counterargue that it is not the number of people per se in the planet, nor its limited resources, that are detrimental to climate change. Rather, it is our wrong-headed, unsustainable ways of managing and abusing the natural and social resources.
Albeit, what stands as a theoretical utopia, be that of scarcity-defined economics or others, is always ameliorated in practice. There are countless of examples in the current corporate world as well as market playing field where scarcity mindset is circumvented in favour of collaborations and solidarity. Opportunities for collaboration in leveraging of ideas and resources are not missed for accuracy backlash with some textbook definition. This is intuitive, close to human nature, and without exception, always with satisfactory pragmatic results. Long-term sustainability of organisations and national economies is a function of the degree to which the indicators of poverty eradication, healthy competition, alliances, etc are fulfilled. Recent Covid19 response entailing much human sacrifice, solidarity, helping hand and aid packages by governments, organisations and leading personalities, is a another testimony to this. As was the increased social awareness for sustainable economy, the hype for ‘sharing economy’, the successful open digital resources, the organically grown sharing reality in start-up ecosystem, and more. After all, even at macroeconomic scale, Easterlin Paradox has shown that the economic indicators are not only the sole determinants of social wellbeing, and that, in the long run, people’s happiness does not increase as a function of increased wealth.