Reddit reviews Scarcity: Why Having Too Little Means So Much

Scarcity: Why Having Too Little Means So Much

Sadly, the book isn't about bees and wasps for the most part. It was only used as an example of how scarcity effects different things. The rest of the book is about its effect on people. But if you're into that kind of thing, you should check it out!

This book addresses this: Scarcity: Why Having Too Little Means So Much They do a much better job than me, so go read it.

The short of it is that being in poverty causes you to make short-sighted decisions in order to have "enough". This could be enough time, money, friends, food, etc... It also notes that people change over time as stresses are applied to them. Subtle changes in your mind that occur over time as you adjust to living with just barely enough. What many of the people who are falling prey to these predatory practices are experiencing is different from those who have enough "slack" in their lives, so it seems to us like they are acting irrationally.

Lets play a game. A money game you can play in your head. Lets say that your bed, and all the beds in your home were ruined by the family dog. What would you do? The many of you who have money than you need can just go out a buy a new one. But lets say that someone did some credit fraud on you, and your account is suspended until they sort that out, so for 2 weeks your bank account is locked out. How about now? Would you sleep on the floor, or on a chair, and go into work every day bright eyed and ready to go? What if you had children? Would you expect them to sleep on the floor for a couple weeks?

You would probably look for help, maybe from friends and family, but whoa, their beds ALSO got destroyed by the family dog, and they are experiencing credit fraud too! No help there. But you just HAVE to get some sleep, you'll fall apart at work if you don't. That's when you remember that the nice furniture store down the street is offering financing; you too can get a good night's sleep for you and your family, and for only $50 a week!

My point is that some of these decisions are addressing real short term need. Many people don't have slack in their lives, and to them all problems are big problems. There are no small problems that just go away when you swipe a credit card or sign a check. They sign up for credit, or financing, which sucks their future bank accounts dry, because they don't have the choice of just pulling out an overstuffed wallet. Anyone who has enough food, water, clothes, housing, heating, etc... isn't going to idly pick up a %15 loan for the fun of it. But the people taking these loans don't have a choice to take it or not. They have a choice to sleep on the floor.

(re-reading this I think I sound a bit bitter. IMHO some people keep making attribution errors, and assuming that poor people are poor solely because they make stupid decisions)

TL;DR: Try living for a week without touching your wallet, checkbook, or bank account. HARD MODE: do this for your whole life.

I'd argue that it being a scam or it being dangerous are mutually exclusive. /u/rustedtrombone seems to discuss the dangerous aspect elsewhere.

Phrased nobly, a wholesaler is factoring or brokering (in a dictionary sense) real estate between an interested seller and an interested buyer, both of whom prioritize speed and ease of transaction. The wholesaler don't use your own money because it's sort of a placeholder for the buyer's money, and the profits are in effect commission for connecting two parties who but for the wholesaler's efforts wouldn't have met.

Phrased ignobly, the wholesaler is targeting a certain class of person, generally poor, generally uneducated, ideally with cheap, wholly or mostly owned, poorly maintained home. The process plays off of their economic and social insecurities, the former of which are frequently real because they're poor and so have minimal ability to weather economic shocks. Much like with a payday lender or a pawn shop, that speedy cash-in-hand sometimes overrules good fiscal choices. Instead of a commission for bring an willing buyer and seller together, profits are half exploitation, half 30 pieces of silver from the end investors for keeping the blood off of their hands.

Noble version says it's helping an underserved market that the ordinary broker model doesn't work for. Ignoble suggests that Canada Bill's adage doesn't make it right.

The easy way out is to say that the truth lies somewhere in between, but I think that's bullshit. There are definitely more scammy deals and definitely more scummy wholesalers. I don't know and do not presume to know how you do your business, and I certainly come from a profession with more than it's fair share of slime and people presuming they're being slimy for merely standing on one's rights (i.e. pretty much anything landlord-tenant, whether landlord side or tenant side). It's the sort of job that can present a number of "between you and your Creator" sort of decisions.

And to be extra clear, I'm not calling it a scam, but looking to explain why people call it a scam when they call it a scam.

I'm going to say Some Consequences of Having Too Little by Shah, Mullainathan and Shafir. Although that's 2/3rds of a psych paper.

There's lots of correlational evidence that being poor is correlated with poor decision-making. Most people have assumed that causation flows from bad decisions to bad outcomes. This paper (and related papers such as Poverty Impedes Cognitive Function and the book Scarcity) presents compelling evidence that a great deal of causation flows the other the way.

The basic idea is that the condition of poverty imposes a cognitive load. A good way to think about this is what it means to have a very constrained budget. If you can't fit everything you need, you end up with the Knapsack problem. If you've got a little bit of slack, budgeting is substantially less cognitively intense. Rather than tradeoff among all possible allocations, you just have to think about comparing any given purchase to savings.

Right now I do not have time to write a bit more exhaustive reply.

Anger is motivator, definitely. And as well, man have to be angry. Channelled right, anger is great masculine emotion.

I think that people who develop narcissism and strong personality even without material wealth, are doing that on the basis of valuating their worthiness on their inner qualities, and belief that human being is worth because of what he is, not because of what he possess.

And that is more in depth, or maybe even more profound way to see and live life. Persons who develop their self worth regardless of material possessions, can not be anything else then strong and more important, congruent and real persons. Which is, should be, normal way of being a person. Connecting self respect to material possessions is utter display of emptiness inside.

Also, this belief of mine may be hard to understand for someone who never saw relative nature of material possessions. Wealth can be lost very quickly, especially today when, even nobody like to admit it, more and more people are wage slaves, unemployment is increasing, and job is harder to keep. This is especially obvious once when you leave America and travel Europe and far east (or I have misconceptions about America).

But, I am talking about something that may be called mid - poverty. Even I had tough times, I have high school education, plus some extra courses, I speak two languages besides my native, I can afford to buy nice stuff I do not need, bassicaly I do not differ from majority (especially since I moved to Germany) and I have some hope to create better future, if I stay persistent in my intentions.

But real poverty, when you do not have for basics - which are home, education, and medical insurance, surely have other, bigger impacts on one. I can understand when from that situation, one never recovers.

Also, as I already mentioned I think it is wrong to be broken just because you are not extra or even moderate wealthy. I recall here speech from Fight Club, which I agree with: we are raised to believe that we must be special. Rock stars, executives, rich, famous. And when guys see reality, they are pissed off.

Someone have to work basic and low level jobs. And I do not think that nobody want it and that one would be down because he works at a gas station - it is the fact that sallary you get from working plain normal job, is not enough for something everybody strive - middle class life. Normal life. There is upper class, poor, and extra poor people today.

Just today I stumbled upon a great book, which you might be interested in. Link is at the end of my reply.

http://www.amazon.de/Scarcity-Having-Little-Means-Much/dp/0805092641

Cheers

links
http://www.amazon.com/Scarcity-Having-Little-Means-Much/dp/0805092641/ref=sr_1_sc_1?ie=UTF8&qid=1377839873&sr=8-1-spell&keywords=book+sacarcity