Why it’s time to stop your scarcity mindset

The scarcity mindset is related not only to personal dissatisfaction but also to societal wealth inequality, so it’s time to put an end to it.

As time goes on, I become less interested in the things that save you $5 and more interested in the things that earn you $5,000.

Maybe that’s why I haven’t done a review of David Bach’s The Automatic Millionaire, and his “saving money on lattes will make you rich” schtick. Yes, it’s probably true, but I think it sets the wrong mindset.

Yes, mindset. I’m starting to believe that most of our society’s ills, from systemic poverty to (yes) systemic racism, can all be in some way traced back to a scarcity mindset.

And what is a scarcity mindset?

It’s the belief that there is not enough. For you, for others, for anyone.

It’s the belief that life is a zero-sum game. That the more others have, the less you can have.

This belief is everywhere. It’s most likely inside you in ways that you don’t realize.

And that’s what’s so insidious, because a scarcity mindset closes off the mind, retreats you inside yourself, and isolates you from others.

And, it might be what’s causing our world to be as terrible as it is.

A bold claim, but even if I’m mostly wrong, defeating the scarcity mindset in yourself will create massive change and ripple outward to everyone else you know.

Is money finite?

At first glance, the idea that money is finite seems, well, obvious.

If I give you a dollar, then I no longer have a dollar and you now do. The net change in total dollars is zero.

From this, it could be simply deduced, that if you want to have more, you must give away less.

But this doesn’t jive with the simple facts that the net worth of the average household has been increasing year on year.

Don’t believe me? Here is the chart from the Federal Reserve. It clearly shows the numbers increasing.

Source: Federal Reserve (Click to enlarge.)

Now, if our population is increasing (and it is), then it can’t be that it’s the same amount of wealth going around. Where is this wealth coming from? China? I thought they were getting rich off of us? (I’m joking.)

This wealth, put simply, is being generated from our economic system. (How? Don’t ask me, I’m no economist, but it’s happening.)

And even if it’s mostly going to the richest 1% in our country (which it is), it’s still dollars that “didn’t exist” at one point.

From this alone, we can deduce that dollars are not finite. Money is created, and you don’t need to understand macroeconomic policy to see that this is true.

So you need to stop thinking that money is finite. It’s not.

How the scarcity mindset makes most people poorer

Follow an ill in society, and there’s a scarcity mindset somewhere nearby.

Take wealth inequality and mass poverty. Fewer people are in the middle income ranges than in the past hundred year or so. They are either going up into the top income percentages, or down to the bottom. This isn’t up for debate; it’s just numbers.

But one can debate why this is happening, and people surely do. The way I see it, wealth and income inequality are due to economic policies that weaken the economic and social safety net for people, trapping many in a never-ending cycle of poverty.

When taxes are low, the poor get poorer but the rich get richer. When taxes are higher, the rich are still rich, but everyone else is more likely to be comfortable and not destitute.

So why is this happening? I blame the pervasive scarcity mindset.

It’s not controversial that rich people make the laws, and they make the laws that serve their interests. But why not create laws that serve everyone’s interest? With only a modest restriction on wealth building, the rest of the society could be so much better off.

Why doesn’t this happen? The scarcity model. It’s the belief that the more than others have, the less I have. “And I don’t want less, so you have to have less.” So the deck is stacked to ensure that policies give as little benefit as possible to those who might need it.

How the scarcity mindset creates racism

It’s a small step to go from how unrestricted capitalism makes people poorer to show how the same thing negatively affects Black people and other people of color (POC). And not just because these folks are more likely to be on the poorer side of the spectrum.

I just finished reading How To Be An Antiracist by Ibram X. Kendi (highly recommended, by the way). And one of the many insights in there was that racist policies were and are created from self-interest, the self-interest of the people making those policies.

But what is the self-interest at work here? No one natively hates others; that is a construction that is taught to us through society.

Self-interest comes down to power and money.

But here is the scarcity mindset again. “My self-interest has me wanting more power and money, and because there isn’t enough to go around, I must create policies that take power and money away from other people. I can use the color of people’s skin or ethnicity or place of origin as a way to divide people into those who can more easily gain power and money and those who can’t.

This is a dangerous illusion with massively damaging real-world implications. And it’s all based on the belief in scarcity.

Think about it: if those in power believed that their self-interest wasn’t in conflict with other people’s self-interest, it would be in no one’s interest to divide people based on race and try to pit groups against each other. We would all benefit.

Moving beyond the scarcity mindset?

The opposite of scarcity is abundance. The opposite of a scarcity mindset is an abundance mindset.

And with the scarcity mindset being so damaging to most corners of society, it seems to me to be of supreme and existential importance to reverse the belief in scarcity and replace it with a belief in abundance.

And obviously, it such a sea change were easy, we would have done it already. A world in which everyone believes in the natural abundance for all would benefit literally everyone.

But fear of loss is always stronger than desire for gain. So this is an uphill battle.

Ultimately, it starts with each one of us. So ask yourself, when you consider your beliefs, opinions, and actions, think to yourself

  • Am I acting in a way that promotes scarcity?
  • How would it be if I acted a different way?
  • How would my actions change given a belief that there is enough for everyone, and more for someone else doesn’t imply less for me?

It’s a small start, but an important one. Large scale defeating of the scarcity mindset will do nothing less than transform our world, to the betterment of all of us. We better start right now.

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