Behind every Conservative promise to "get tough on single mothers", behind every Daily Mail story about Britain's "handout culture", or Mitt Romney's notorious comments about "the 47%", there lies an assumption: that being poor is a failure of character. Awkwardly, for those who find this obnoxious, the research sometimes makes it seem true. People who are less well-off really do appear to give in more readily to temptation, making the very purchases they can't afford; to make unwise financial decisions; to use less effective parenting techniques; or to fail to take life-saving drugs, even when they're free. Is this a deep-seated weakness of will, made worse by a "culture of dependency"? The Harvard economist Sendhil Mullainathan and the Princeton psychologist Eldar Shafir reject that idea, and some of the most familiar leftwing responses, too. Poverty, they argue, is indeed a matter of willpower and bad decisions, but the Mail has it back-to-front. It's not that foolish choices make you poor; it's that poverty's effects on the mind lead to bad choices. Living with too little imposes huge psychic costs, reducing our mental bandwidth and distorting our decisionmaking in ways that dig us deeper into a bad situation.
Of course, it's hardly news that poverty creates a vicious cycle. Not having money is expensive, thanks to credit card late fees, high interest rates on payday loans, the extra cost of buying in instalments, and so on. But the alarming conclusion of this book is how completely scarcity colonises the mind. Merely asking poorer people to contemplate a hypothetical £1,000 car repair, one study by the authors shows, impairs their performance on intelligence tests as much as missing a night's sleep – about 13 or 14 IQ points. In another study, Indian sugar cane farmers performed worse pre-harvest, when money was tight, compared to post-harvest. "Scarcity captures the mind," explain Mullainathan and Shafir. It promotes tunnel vision, helping us focus on the crisis at hand but making us "less insightful, less forward-thinking, less controlled". Wise long-term decisions and willpower require cognitive resources. Poverty leaves far less of those resources at our disposal.
Their most arresting claim is that the same effects kick in – albeit not always with such grave implications – in any conditions of scarcity, not just lack of money. Chronically busy people, suffering from a scarcity of time, also demonstrate impaired abilities and make self-defeating choices, such as unproductive multi-tasking or neglecting family for work. Lonely people, suffering from a scarcity of social contact, become hyper-focused on their loneliness, prompting behaviours that render it worse. (..) To use the authors' favourite metaphor, life under such conditions is like packing a tiny suitcase for a trip. It entails a ceaseless focus on difficult trade-offs: the umbrella or the extra sweater? The greatest freedom that money can buy is the freedom from thinking about money – or, to quote Thoreau, "a man is rich in proportion to the number of things he can afford to let alone".
