Overtaxing Our Bandwidth

Overtaxing Our Bandwidth


Scarcity – Why Having Too Little Means so Much” by Sendhil Mullainathan & Eldar Shafir, 2013, 304 pages


Ever been in the situation where it seems like there is just not near enough resources to make ends meet? Not enough budget, time or other resources? And while constraints in budget, time and resources may help creative solutions come about in some scenarios; persistent, serious “underfunding” produces strains and frustrations that can really pull down our performance and general well-being.

Sendhil Mullainathan and Eldar Shafir, who hail from the subject areas of Economics and Psychology respectively, have written a very interesting book dealing with the effects of scarcity on our lives and on organizations. It provides food for thought both in terms of how our society is organized, but also on how we choose to structure our organizations.

Tunnel Vision

Having only a (very) limited supply of key resources usually results in our becoming very focused on managing how this limited supply influences our lives. If we are short on money, we typically become very conscious of the cost of items vs. the value they bring to us. Shortage of money in a way makes us purchasing experts, always paying attention to the best possible way to spend the money that we do have access to.

If we are short on time, we tend to become very focused on managing the time we do have, creating schedules, trying to multi-task and improving our overall effectiveness. Often we end up busy but not really producing terribly much long-term value.

It is certainly better to be money conscious and to do smart scheduling of our time if we are short of those resources. However, by focusing on these areas we tend to overlook the bigger picture. We can become quite obsessed with managing the short-term issues at the cost of missing opportunities and forestalling other, future difficulties.

Bandwith Tax

What does this short-term, tunnel vision focus mean for us? Mullainathan and Shafir talk about a concept they call “Bandwith Tax”. Whenever we have to focus on managing a particular shortage, we pay a bandwith tax. Our bandwith is reduced, making it difficult for us to handle other important things if these fall outside of our immediately pressing needs. A severely time-pressed person will have difficulty in learning and using new information. Not through ill-will or lack of skills, but because their processing power is severely compromised by the amount of attention they have to give to managing their time.

The thing about scarcity is that it usually has its roots in times of relative affluence and good bandwidth. We fail to make provisions for times with a smaller budget and more time pressure during times when we have sufficient budget and adequate time. What is more, once we experience scarcity, the way we handle it, focusing on short-time management, tends to perpetuate scarcity into the future. We may borrow from future budget or time to make ends meet now. Thus when the future rolls around, we are equally, if not worse, strapped for money or time. Sound familiar to anyone?


One way to prevent scarcity from ruling our lives is to have enough slack built into our lives; a buffer to absorb the small chocks that life and business is bound to send our way from time to time. With a buffer, the tightening of money flow or an increased demand on our time will not tip us into the scarcity tunneling response. Or at least the buffer will allow us to recover from it instead of remaining stuck in it.

What is interesting is that slack has acquired a bad reputation. Slack is often seen as equal to excessive fat that needs to be trimmed. In our quest for ultimate efficiency, we actually make ourselves very vulnerable to the unpredictable events that increase demands on our resources.

Lack of slack also makes it much more difficult for us to seize opportunities when they present themselves and prevents us from taking a long-term view of matters. Lack of slack sees us stuck in the limitations of the here and now: in fact and in thought. So, while it may appear a good idea in the here and now to remove slack to save costs, all we may be doing is set ourselves up for future problems.


Recent years have seen our organizations increasingly create the conditions for falling into the tunneling, short-term thinking that comes with experiencing scarcity. As budgets, processes and man-power have been cut to remove what is considered undesirable slack, we have become much more vulnerable to the unforeseen events that occur and demand additional resources and time to handle. Not only that, but the slack that has been removed makes it harder for us to respond in a timely manner to opportunities that present themselves.

The times they are always a-changing – and there are no signs of the rate of change slowing down, quite the opposite. So, if we want to be able to make the most of the changes that come our way, we need to build ourselves some wiggle-room in our organizations and in our personal lives.