Scarcity: Why Having Too Little Means So Much

Chapter 8 highlights the critical need for redesigning social and anti-poverty programs with an understanding of the scarcity mindset. Mullainathan and Shafir use the analogy of WWII cockpit design errors to illustrate how system design, rather than individual behavior, often underlies failures.

During the war, the United States military experienced a high number of wheels-up crashes, in which pilots would retract the wheels instead of the flaps. To solve the problem, they brought in an outside expert, Alphonse Chapanis, who observed that what were previously thought to be pilot errors were actually cockpit design errors: The wheel controls and flap controls were side-by-side and looked almost identical. Mullainathan and Shafir argue that while human error is inevitable, good design can prevent accidents. They suggest that many social programs fail because they do not account for the inevitable errors people make, particularly those living in scarcity.

The chapter critiques traditional welfare programs and training for the low-income population, noting high rates of absenteeism, dropout, and non-participation, often attributed to a lack of motivation or understanding among participants. The authors argue this perspective overlooks the psychological impact of scarcity, which predicts such errors as common and perhaps unavoidable.