6 ideas
Scarcity captures attention and focuses the mind on the pressing shortfall. This produces a real 'focus dividend', so deadlines make people more productive. It also pushes everything outside the tunnel out of view, so people neglect important but non-urgent things like maintenance, insurance and long-term planning.
Preoccupation with scarcity uses up mental bandwidth, meaning both fluid intelligence and executive control. Less remains for reasoning, planning and resisting impulses. The poor are therefore not less capable but cognitively taxed by their circumstances, and the same person decides worse when scarcity is present.
Sugarcane farmers in Tamil Nadu are paid once a year, so the same farmers are poor before harvest and relatively flush after it. On cognitive tests they scored markedly worse before harvest than after, a gap comparable to losing a night's sleep. Because the same individuals were measured, the drop reflects the effect of scarcity rather than fixed traits of poor people.
Abundance creates slack, spare room that lets people absorb shocks and make mistakes without serious consequences. Under scarcity every trade-off becomes explicit and one miscalculation cascades, because there is no buffer to absorb it. Slack is often mislabeled as waste, but it is what makes a system resilient.
Tunneling leads people to fix today's shortfall by borrowing from the future, through high-interest loans, missed payments or postponed tasks. That makes future scarcity worse and keeps the person perpetually one step behind.
Policies should treat bandwidth as a scarce resource. That means reducing the cognitive demands they impose, defaulting good choices, building in slack, and making it cheap to fail. Punishing missed classes or complex paperwork taxes the very capacity scarcity depletes, so forgiving and simple designs outperform incentives that assume full attention.