Breaking Down the Scarcity Mindset | Opinion | The Harvard Crimson

• Research shows simply thinking about expensive car repairs significantly worsens cognitive performance in low-income people—poverty imposes a mental load equivalent to losing 13 IQ points
• The scarcity mindset creates a poverty trap: you can't invest in the future when present needs aren't met, leading to expensive short-term decisions (buying cheap boots repeatedly vs. one quality pair)
• Poverty's effects cascade through generations—impaired brain development in children, chronic stress-related illness, and zero-sum thinking that turns neighbors into competitors
• Ontario's UBI trial (cut short) showed dramatic improvements: better health, less substance use, more education enrollment, increased volunteering
• We have enough resources to meet everyone's basic needs—scarcity is artificial, the result of poor allocation rather than actual lack

The article presents research showing that poverty fundamentally impairs cognitive function. Studies found that low-income individuals performed significantly worse on cognitive tests when thinking about financial stress, and Indian sugarcane farmers scored much lower before harvest (when poor) than after. The conclusion: poverty reduces cognitive capacity by roughly 13 IQ points—comparable to missing a full night's sleep. This "scarcity mindset" creates a vicious cycle where limited mental bandwidth focused on immediate survival prevents long-term planning and investment.

The author argues this cognitive impairment explains why poverty is so hard to escape. People make seemingly irrational decisions not because of character flaws, but because their brains are overwhelmed. The effects extend beyond individual cognition to physical health (chronic stress increases disease risk), child development (impaired brain development and lower educational outcomes), and social fabric (scarcity thinking transforms community cooperation into zero-sum competition). The Ontario UBI trial, despite being terminated early, demonstrated what's possible when this cycle breaks: participants reported improved physical and mental health, reduced substance use, increased education enrollment, and more volunteering.

The piece concludes that universal basic income could eliminate poverty overnight and shift collective thinking from scarcity to abundance. Technology has already killed genuine scarcity—what remains is poor resource allocation. UBI would recognize inherent human value, enable better decision-making by meeting basic needs, and create a more productive, educated, healthy society built on cooperation rather than competition.