personal finance

Is ‘Scarcity Brain’ Making You Broke?

Photo-Illustration: by The Cut; Photo: Getty Images

Most of us are a little bit addicted to a lot of things — Instagram, our email, whatever show we watched way too late last night. It’s human to crave more of what we like, and for the most part, pretty harmless. But sometimes it seems like the entire world is stacked against moderation. That’s what led Michael Easter, a science journalist, professor, and author of the forthcoming book Scarcity Brain, to investigate a tendency known as “the scarcity loop” — a pattern that leads humans (and many other animals) to repeat excessive behaviors that can harm us in the long run.

Here, Easter discusses how the scarcity loop relates to money, shopping, and other tripwires embedded in modern consumption. It’s not all bad — as Easter puts it, easy access to things you want is a fortunate problem to have. The key to reining it in is being aware of it in the first place — and knowing when to walk away.

How did you learn about the scarcity loop, to begin with?
I started learning about the scarcity loop because I’m really interested in bad habits. My background is in science journalism, and writing about health and wellness. People always focus on building good new habits, but I’ve noticed that if you haven’t fixed your worst habits, you still have your foot on the brake. Basically, bad habits hurt people more than good habits help people. And there’s no better place to see this than Las Vegas, which happens to be where I live. This town is built on getting people to do excessive behaviors that often hurt them in the long run. Slot machines are the weirdest. They’re everywhere and people play them around the clock. I started digging into what makes slot machines so appealing, and that eventually led me to interview the guy who designed them. He’s the person who introduced me to the scarcity loop.

Describe it to me. How does it work, and how does it relate to things we do beyond gambling?
It’s like the serial killer of moderation — it’s designed to get us to repeat behaviors over and over and over. It consists of three parts: The first is opportunity, the second is unpredictable rewards, and the third is quick repeatability. To break it down more, you start with an opportunity to get something of value, something that improves your life. In the case of a slot machine, it’s money. Number two is that you have unpredictable rewards. You may get the thing of value at some point, but you don’t know when and you don’t know exactly how valuable it will be. With the slot machine, it could be a dollar, it could be nothing, it could be a million dollars. And then the third part is quick repeatability, meaning you can repeat the behavior immediately. The average slot-machine player plays 16 games in a minute, which is about the same amount of times that we blink. The loop feeds itself.

Gambling is just one example. The same scarcity-loop design has now been applied to lots of different technologies and things we do in our lives. Social media is one; there’s easy opportunity, uncertain rewards — what am I going to see next, how will people respond to my post — and quick repeatability. Robinhood, the investing app, blew up because it increased quick repeatability with stock trading. And it’s also how dating apps work. You swipe, swipe, swipe, match — opportunity, unpredictable rewards, and quick repeatability.

I can definitely relate to being my own worst enemy with certain habits — shopping, especially. But why do we do this? It’s so frustrating to keep doing things that we know we’re going to regret.
It’s a natural human impulse that evolved to help us survive in the past when food and other things that we needed to live were scarce. And in that context, repeating the instinct to chase a reward — like food — kept you alive. Of course, now most of us don’t have to do that, because we have an abundance of food and other necessities. But we still fall into that random rewards game that is the scarcity loop, because it’s part of how we’re wired.

How has studying this changed your own behavior? 
The awareness has changed me, definitely. When I find myself scrolling for ages, or mindlessly eating, I can say to myself, “Oh yeah, that’s my ancient brain doing this thing that would’ve kept me alive a million years ago, but now the game has changed and this is not helping me anymore.”

But then, how do you break the loop and stop it?
Part of it is to understand why you’re doing it in the first place. People don’t do anything that is irrational; the scarcity loop evolved to help us. The reason we do almost anything is that it rewards us in some way. As an outside observer, when I look at slot machine players in Vegas, I think, “That doesn’t make any sense to me. They’re just losing money.” But to them, it does make sense, on some level. Maybe it’s giving them entertainment. Or it’s providing an escape from whatever they want to escape from.

I also don’t want to shame anyone for this. People do things that give them a benefit, even if it’s a small one. It becomes a problem when the short term benefit comes with a bunch of long-term downfalls. For example, most people who gamble aren’t addicted to it; they’re just having a good time. But I think a lot of people can identify something that they do repeatedly that’s counterproductive, or that they wish they did less of. It’s a sliding scale. Like, I don’t know many people who would say, “I’m spending the perfect amount of time on my phone.” And once you become more aware of why you’re doing this, and the formula that’s at play, you can tweak it or change it.

I, too, fall down the phone hole. What do I do about this?
Once you become more aware of the behavior you want to change, you can take away at least one of the three parts of the scarcity loop. For example, most people look at their phone because they’re bored. It’s a reflexive thing. But it becomes problematic when you spend three hours on TikTok instead of the three minutes you wanted to spend. It’s the lack of conscious choice that’s an issue. You could start by removing the opportunity — putting your phone in another room, or farther away from you so you can’t reach it. But a lot of us need our phones to work and communicate, so that’s not always possible. You could also slow down the process of opening TikTok. At first, to me, the idea of downloading an app so I could use another app less was ridiculous. But there are apps that make you wait a certain amount of time before you can open another app. Delaying a reward is a very effective way to disrupt a behavior.

I find that when I order stuff online, the delay between when I order it and when it arrives often allows me to think better of my decision, and then I return it. Which is not entirely positive — it would be better if I didn’t order that thing in the first place, obviously — but it is better than keeping it, usually. How else would you apply these concepts to money and spending habits?
If I see something I want online that’s not absolutely essential, I try to give myself a week before I buy it. And most of the time after a week I’m like, “Wait, what was that thing I wanted to buy? Oh, right. I don’t need that.” A lot of the issue is how we deal with boredom. Boredom is neither good nor bad — there can be upsides to boredom. It’s really what you do with your boredom that matters. A lot of us are a little bored when we decide to shop. Shopping is at our fingertips. It’s integrated into social media. And it has all the hallmarks of the scarcity loop. There’s opportunity, uncertain rewards — will this thing be exactly what I want, and make my life better? — and quick repeatability. It taps into our drive to get more status, to get more stimulation, to get more belongings. And over time, that leads to problems. The problems of abundance are great problems to have, but they’re still problems. The more you train your attention towards hyperstimulating stuff, the harder it is to deal with yourself if you don’t have it.

A lot of people today, especially those in their 20s and 30s, do feel a sense of financial scarcity that is very real. Maybe part of that is a mindset issue, but I also think that it can be very hard for people to pay for things they need to pay for, like housing and food and student loan bills. Knowing what you know about scarcity, what are some things that could be helpful for people who are really feeling pinched?
One message that I want people to get is that we all have different needs, but we are all greatly affected by feelings of scarcity. Experiencing the scarcity loop is not a personal failing. There are larger forces at play that push us to repeat habits that can hurt us. Getting out of that pattern is going to look different for everyone, but across the board, it’s almost never easy. Ultimately, figuring out what you need — financially or otherwise — is hard, but it’s much more rewarding than following a set of rules that may not work for you or give you tools to ask the right questions of yourself.

For example, there was some widely shared research that came out a while ago that linked addictive behaviors to lacking social connections — the popular saying was, “the opposite of addiction is connection.” And that was not something that I related to at all. Before I got sober a number of years ago, I still had plenty of friends. I felt totally connected when I was drinking. The reason I drank had nothing to do with feeling isolated. So I think it’s more useful to grapple with a wide range of ideas, and figure out what applies best to you, even though it might be more complicated in the short term. I could probably sell more books if I said, “Do exactly X, Y, Z,” but I don’t think that works.

It sounds like there are some common themes, though, in what you learned about getting out of the scarcity loop.
That’s true. For instance, I think removing yourself from the influence of others can be underrated and incredibly powerful. Obviously we need social connection to be well, but sometimes the people in our life aren’t giving you what you need in a particular moment. Disconnecting and having some time away from them, on your own, to think, process, figure out how you feel about things, that’s essential. Humans have been doing that for as long as we’ve been writing things down. And it’s free. Anyone can do it.

You also recommend thinking more about the utility of things that you buy, as part of the effort to accumulate less stuff. I can understand the appeal of that, but also, most of us buy things simply because we will enjoy them, not because they’re utilitarian. Is there a way to translate “utility” in a way that feels more realistic?
Maybe a better question is, “What will I actually use this for?” With a lot of the purchases that we make, we have a story in our heads about what kind of person it will help us become. In my book, I lay out the three reasons why people buy stuff they may not technically need. One is to accomplish a goal — it helps us achieve something. The second is to gain status. And the third is to belong socially, and put yourself in a certain group. None of these things are inherently wrong. But I think it’s important to be aware of the reason you’re purchasing something. Ask yourself, “What is this purchase doing for me?” Maybe the answer is, “I’m buying this watch because it looks amazing.” And that’s okay! Amazing watches are one of the many wonders of living in 2023. But I think if you insert that equation into more of your purchases, you will end up purchasing less. And most people would probably say they own too much rather than too little when it comes to random items.

I think one of the hardest aspects of managing money is dealing with friends and family and their expectations for what you’re willing to spend to be with them. It’s not about stuff; it’s about relationships. How does the scarcity loop relate to that?
My goal is for people to be able to make more conscious choices about why they’re doing the things they do, including spend money. And your environment — which includes your friends and other relationships — determines a lot. When I got sober, there were certain friends who were awesome. And there were other friends who acted like I’d grown a third head. They didn’t know how to deal with me.

My point is, as you make positive changes in your life, whether it’s in regards to your finances or your drinking or something else, you’re not always going to be able to perfectly maintain every single relationship. For me, the most important thing I’ve ever done in my life is get sober. It affected many of my relationships, most of them positively. But there are a few people who I don’t really keep in touch with anymore, because we live differently. And I’m okay with that. Because by giving up drinking, I got something much bigger.

It would be lovely if every problem could be solved without any repercussions, but the reality is, when you make a change, there’s going to be other changes, and they won’t all be great. I can look back and remember how stressful it was to step away from certain relationships at the time. But sometimes you have to choose short-term stress for the sake of long-term growth.

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Is ‘Scarcity Brain’ Making You Broke?