The Vicious Cycle of Scarcity: Here’s to You, Charles Murray and Robert Putnam
May 20, 2021
Just as many left-leaning Americans have a knee-jerk fear and loathing of ‘capitalism’, right-leaning US citizens often embody a deep and indiscriminate phobia and distrust of any organized group practice that smells even slightly of ‘socialism’. Objectively both sides of this divide are shooting themselves (and others) in the foot.
Among other things, a previous post reiterated that all humans are, at the very least, unconscious capitalists. By just breathing and eating and moving around each day, all members of homo sapiens are employing the capitalbequeathed to them by their organic and inorganic forebears, not to mention making use of the capital improvements (minus the depreciation of wear and tear) individually accumulated since birth.
Similarly, by daily breathing air, talking and thinking in a language, drinking water-based fluids, utilizing any sort of knowledge collected by other people, or driving over paths, roads, and highways, we all are using common, publicly-owned means of production. Socialism,in other words, is as intrinsic and basic to human (and other) life as is capitalism. Humans necessarily and constantly stink of both capitalism and socialism, whether they think so or not.
Granting this, why then don’t all Americans intellectually and practically embrace their ‘inner socialist’? More importantly, just what are Americans doing to themselves and their neighbors by arbitrarily keeping their inner socialist hidden away in a closet?
Scarcity and Homo Sapiens
Scarcity, not having enough of something required for maintenance of life, can lead to death. Nothing new there. However, relatively recent research has shown that, short of death, scarcity itself very materially and involuntarily reduces and impedes the unique abilities of homo sapiens to handle that scarcity. Catch-22! Vicious cycle!
The behavioral economists, Mullainathan and Shafir (2013),explain that scarcity of anything – time, money, or freedom from physical pain, as examples -- significantly reduces what they colloquially refer to as ‘human bandwidth’ for the duration of that scarcity. This bandwidth, more formally termed mental capacity, is made up of two main components: fluid intelligence and executive function.
Fluid intelligence “…is the ability to solve novel reasoning problems and is correlated with a number of important skills such as comprehension, problem solving, and learning”. Executive function or control, on the other hand, is a person’s developed ability to self-manage, regulate, and control their cognitive processes and behavior. Because executive function develops in spurts until early adulthood (i.e., ages 20-29) and limits the utility of fluid intelligence, the overall level of human bandwidth/mental capacity reached by an individual follows the same general developmental schedule as that limiting factor of executive function.
You might recall the psychologist Albert Bernstein’s observation, speaking of people that act immaturely and problematically towards themselves and others:
Usually, the difficult people discussed in this book are indistinguishable, both physically and psychologically, from everybody else. Vampires’ immature tendencies usually come out only in threatening situations. The rest of the time, emotional vampires act like normal, responsible adults. That said, I’ll also point out that vampires tend to be threatened by things that don’t bother ordinary people. [Emphasis added.]
By dint of experimentation, Mullainathan and Shafir (ibid.) and their graduate students managed to quantitatively estimate what personally-threatening circumstances do to the mental capacity of ordinary homo sapiens. One example (ibid., Chapter 2) involved merely posing a thought experiment first requiring solution of a hypothetical financial problem to both lower- and higher-income test subjects, and then measuring their post-problem-solving IQ-equivalent (Raven’s test fluid intelligence score). As long as the financial problem posed to the test subjects was within the financial means of all of the study participants, the IQ-equivalent distributions of both income classes was quite similar. However, as soon as the thought problem forced a lower income person to try to come up with a solution outside of their ordinary financial means, post-thought experiment IQ-equivalent test results of the two income groups diverged. The higher financial means group retained its characteristic IQ test result distribution, while the poorer group suffered an apparent group decrease in native fluid intelligence. As Mullainathan and Shafir report:
Because the Raven’s test is used to measure fluid intelligence, it has a direct analog with IQ. Typical studies of IQ assume a normal distribution of IQ scores, with a mean of 100 and a standard deviation of 15. (Standard deviation is a measure of the dispersion of scores around their mean. In a normal distribution, almost 70 percent of scores fall within one standard deviation of the mean.) One can calibrate the impact of an intervention by looking at how its effect compares to the standard deviation. For example, if an intervention has an effect equivalent to one-third of a standard deviation, then that effect corresponds to about five IQ points.
By that measure our effects correspond to between 13 and 14 IQ points. By most commonly used descriptive classifications of IQ, 13 points can move you from the category of “average” to one labeled “superior” intelligence. Or, if you move in the other direction, losing 13 points can take you from “average” to a category labeled “borderline deficient.” Remember: these differences are not between poor people and rich people. Rather, we are comparing how the same person performs under different circumstances. The same person has fewer IQ points when she is preoccupied by scarcity than when she is not. This is key to our story. The poor responded just like the rich when the car cost little to fix, when scarcity had not been rendered salient. Clearly, this is not about inherent cognitive capacity. Just like the processor that is slowed down by too many applications, the poor here APPEAR worse because some of their bandwidth is being used elsewhere [emphases added].
Because mental capacity or ‘bandwidth’ is a system involving fluid intelligence and self-control, experimentation reported by Mullainathan and Shafir was also able to show that scarcity temporarily increased impulsiveness to that point usually found in ‘immature’ individuals like those described by Bernstein (above) as “emotional vampires”. Mullainathan and Shafir elaborate on this general theme:
Psychologists have spent decades documenting the impact of cognitive load on many aspects of behavior. Some of the most important are the behaviors captured in these [Chapter 2] vignettes: from distraction and forgetfulness to impulse control. The size of these effects suggests a substantial influence of the bandwidth tax on a full array of behaviors, even those like patience, tolerance, attention, and dedication that usually fall under the umbrella of “personality” or “talent.” So much of what we attribute to talent or personality is predicated on cognitive capacity and executive control. The restaurant manager looks to all the usual places to explain his employees’ behavior—lack of skill, no motivation, or insufficient education. And a taxed bandwidth can look like any of these. The harried sales manager, when she snaps at her daughter, looks like a bad parent. The financially strapped student who misses some easy questions looks incapable or lazy. But these people are not unskilled or uncaring, just heavily [bandwidth] taxed. The problem is not the person but the context of scarcity.
Field work reported later in their Chapter 2 (“The Bandwidth Tax”) by Mullainathan and Shafir confirmed their lab-style experimental results described above. Indian sugarcane farmers, for example, were found to temporarily possess less intelligence and exhibit more careless impulsiveness during the parts of the year when saved income from seasonal harvests began to run out – but regained their judgment and their wits once their ‘coffers’ were filled once again by bi-annual cane sales to sugar cane processors.
So, what does this all have to do with American socialism-phobia? I’m getting to that.
The Static Viewpoint (of Charles Murray and other Americans)
In the science of economics there are two modes of problem description and analysis: static and dynamic. With static analysis of any given instant in time it is possible to identify and describe the controlling factors of the state of a system at that time instant. For example, it’s a basic law of classical economics that the interplay of demand and supply for a good or service determines the price level of that object at a particular point in history at a particular location. However, in economics (as in all other aspects of nature) things can and do change over time. For example, if an innovation comes into an economic system, supply can increase (and price level decrease) because of a reduction in production cost of that good or service. Similarly, if an innovation provides a more effective and/or durable substitute for an old product or service, demand for the old product or service will fall along with its market price level – while demand for the innovated good or service will increase. Economic problem analysis taking into account system changes that occur over time is dynamic because time permits the entry of many more controlling variables into the economic system being considered, and therefore can cause that system to change over time.
I think it can be safely asserted that most political analysis and most political views, views that control immediate and short-run group decision-making by homo sapiens, are formed from what can be described as the functional equivalent of a static economic analysis. There are many factors with many origins that account for this reliance on static analysis, but a modern business phrase that encapsulates them all is “information silo”. Because of such factors like age, education, location, health status, and occupation, each human has a necessarily narrow and partial perspective on what is going on in the human and natural worlds, including the political and economic systems of homo sapiens. As a result, human views of the world tend to be static as a technique, if for nothing else, of reducing the degree of difficulty of individual decision-making in a very busy world. This distinct tendency to follow a static view of reality, then, is just another basic condition of being homo sapiens. In this case, the basic condition is another instance of the general human reliance on heuristics used as a means of conserving that Mullainathanian and Shafirian human bandwidth.
A Controversial, Yet Influential Static (And Therefore Partial) Political Analysis of the Nature of Homo Sapiens in America
A notable example of such a static analysis that very clearly was meant to influence human political decision-making and policy-making in the US and elsewhere in the West was Murray and Hernstein’s The Bell Curve (1996). Charles Murray has kept up this work since, and his latest effort in this direction, Facing Reality: Two Truths about Race in America, is scheduled for sale this coming mid-June.
The two truths due to be once again imparted, described, and explained as staid reality in Murray’s latest written work are these:
1. The first is that American Whites, Blacks, Latinos, and Asians, as groups, have different means and distributions of cognitive ability.
2. The second is that American Whites, Blacks, Latinos, and Asians, as groups, have different rates of violent crime.
Murray further posits (ibid.), “Of the many facts about race that are ignored, [these] two above all, long since documented beyond reasonable doubt, must be brought into the open and incorporated into the way we think about why American society is the way it is and what can be done through public policy to improve it.” Note that, according to Murray’s point of view, less violent and more cognitively able white Americans and Asians (as groups) are evidently analogs to those individuals who Albert Bernstein, a one-on-one clinical psychologist, refers to as non-problematic “ordinary people” above.
Statically (and statistically) speaking, these assertions by Murray are indeed true at the present time. However, as Mullainathan and Shafir (ibid.) indicate, these sort of variations in group homo sapiens behavior and ability are quite easily explained by taking into account the degree of influence of scarcity on the American (or other national) subpopulations concerned. Ascribing these differences to, for example, group genetics or culture is not necessary. Indeed, Murray and Hernstein (ibid.) earlier showed that some subgroups of American Whites also affected by various forms of scarcity exhibited the same group means and distribution of cognitive abilities, and same high rates of violent crime as ‘non-ordinary’ financially- and otherwise-stressed American Blacks and Latinos (as groups).
As Murray’s new text in its entirety is not yet public, it is not possible to report here his public policy recommendations based on his apparently static view of American society. From the dynamic viewpoint of human nature supported by the research findings of the Mullainathan and Shafir, however, it would appear that establishing a ‘universal basic income’ like that promoted by Yang in the 2020 Presidential election cycle and like those measures currently being implemented more limitedly and temporarily by the Biden administration, is somewhat near to getting onto the right track.
American socialism phobia (socio-phobia?) be damned, following Mullainathan and Shafir’s discoveries and taking material steps to reduce the negative influence of scarcity on as many Americans as possible could incrementally and cumulatively improve things for everyone in the country by maximizing the general American level of ‘bandwidth’.After all, the greater the number of human ‘processors’ operating at full capacity and addressing in parallel the multitudinous problems and opportunities of everyday life in the US, the better for everyone.
The Chaotic and Destructive US Governmental-Industrial-NGO Complex: the Lord Giveth, and the Lord Taketh Away
The problem with the recent patchwork of Biden and Trump administration income scarcity ‘fixes’ to the system, of course, is that they are haphazardly combined with conflicting actions of similar or greater magnitude of effect that only serve to elsewhere increase the net negative influence of scarcity in America. Environmentalist-driven policy like the Green New Deal justified by a hypothesis, for example, has driven up gasoline prices by about 40% just since the start of the year. Massive disbursal of virtually-created money to American citizens and businesses, meant to counteract the previous and ongoing fumbling actions of the federal and many state governments with regard to the COVID19 virus, has also further eaten away at the purchasing power of those on fixed or limited incomes. Therefore, instead of reducing scarcity and halting its vicious cycle, governmental-industrial-NGO actions in the US during yet another presidential administration just continue to increase the penetration and velocity of that vicious scarcity cycle, and have done so at least since 1970.
For the last 50 years, governmental-industrial policies in the US are, to borrow a phrase from our similarly disorganized northern neighbors, a stomach-turning dog’s breakfast really doing nothing at all to increase the general welfare and decrease the static major problems repeatedly identified for decades by well-meaning people like Charles Murray (on the right) and Robert Putnam (on the left). Indeed things have gotten much worse over this period. The course of this externalization of scarcity cost onto the bulk of the American public is mapped out succinctly by the three following graphs gathered by Charles Hugh Smith. From these graphs it is clear that most Americans have in fact fallen under the pressure of scarcity – not just the ‘average’ (as a group) American Blacks and Latinos -- and that this pressure is continuously increasing. These graphic observations do not bode at all well for the American mental capacity (as a group) to address new and old problems now or in the future.
Capital is a broad term that can describe anything that confers value or benefit to its owner, such as a factory and its machinery, intellectual property like patents, or the financial assets of a business or an individual. From https://www.investopedia.com/terms/c/capital.asp
Mullainathan, Sendhil, and Shafir, Eldar, 2013, Scarcity – The New Science of Having Less and How It Defines Our Lives: Henry Holt and Company, New York, 288 pages.
From the Wikipedia entry just cited: “A heuristic technique, or a heuristic (/hjʊəˈrɪstɪk/; Ancient Greek: εὑρίσκω, heurískō, 'I find, discover'), is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediate, short-term goal or approximation. Where finding an optimal solution is impossible or impractical, heuristic methods can be used to speed up the process of finding a satisfactory solution. Heuristics can be mental shortcuts that ease the cognitive load of making a decision.”
To beat my favorite drum very lightly, the most rudimentary or basic form of bandwidth-increasing human socialism in America -- or anywhere else -- is marriage.