7 Examples of a Scarcity Mindset

John Spacey, April 17, 2020

Scarcity mindset is the philosophy that life is a competition for fixed resources. This is a fundamental element of worldview that can be contrasted with an abundance mentality, the belief that there is enough for everyone. The following are illustrative examples of a scarcity mindset.

Win-Lose Competition

The belief that there is a fixed amount of value that is divided with a process of competition that produces winners and losers. This can be contrasted with the view that competition produces more and more value for everyone. Scarcity mindset is associated with win-lose strategies such as rent seeking whereby an individual tries to gain at the expense of others.

Opposition to Competition

Scarcity mindset views competition as a process of dividing up a pie as opposed to a process of baking more pies. As such, it is common for those with a scarcity mindset to view competition as a bad thing that is unnecessary based on the argument that we simply divide the pie equally. This ignores the basics of economics and life in general whereby competition drives increases in knowledge, talent, performance, value, quality, resilience and risk reduction. For example, if you have soccer games where all kids are guaranteed to get exactly one goal -- the children will fail to develop the talents and resilience of a competitive team.

False Dichotomy

Scarcity mindset is based on a series of false dichotomies such as economy vs ecology, happiness vs competition, freedom vs security and freedom vs safety whereby things are presented as necessary tradeoffs where in fact win-win strategies exist.

Pessimism

Scarcity mindset views value as fixed such that risk taking is pointless or simply an attempt to steal more of the pie from others. As such, it tends towards a pessimistic view of risk takers such as entrepreneurs.

Defeatism

As a scarcity mindset views risk taking and competition as more or less pointless, it leads to defeatism whereby an individual who is part of a risk taking endeavor views it as doomed to failure such that they make no honest effort to fulfill their role.

Envy

A scarcity mindset inherently creates the sense that successes of others diminish your own successes and opportunity. This leads to negative emotions such as envy.

Schadenfreude

Schadenfreude is a negative emotion described as joy at the failure of others. This indicates a scarcity mindset as you may feel that they failure of others improves your own chances or validates your avoidance of risk or life in general.

Notes

Constrained resources do exist and tradeoffs can be necessary. As such, it is only practical to consider constraints in any strategy or decision. However, the term scarcity mindset implies a cognitive bias whereby an individual tends to make invalid assumptions that a resource is fixed or that a tradeoff is unavoidable.