This week, I start with a question, one that has been on my mind for quite sometime now, which is, ” Do circumstances shape our cognitive capacity or are we bound to act the way we act because we are inherently like that?” Before getting to addressing that question, I would like to begin by a show that I saw recently. For those who haven’t seen ‘Paatal Lok’, a crime-drama series that is written by Sudip Sharma, it has left a lot its viewers awed by the story that the creators have chosen to tell. What struck a chord with me while watching this series is the back-story of the four characters who get charged for an attempted murder of a famous journalist in Delhi. The thing that makes the plot compelling is because the creators of the show tried to trace the story of the circumstantial development of the motive of the four suspects-Vishal Tyagi, Kabir M, Tope Singh, and Cheeni.
The exploration of the various narratives behind each character makes us question that are these criminals in this act because they lack morality, or is their some ulterior motive behind this, or is it a tunneling effect of their circumstances. Vishal Tyagi, who is serial killer in this group of 4, got into this act after murdering his uncle’s sons in order to defend the honor of his sisters who were molested by the men his uncle had hired over some property conflict between the two brothers. Kabir’s backstory is a real but harsh depiction of religious fanaticism that exists in today’s society and, how that along with the lack of resources compounded him to be in the the situation where he is framed for an attempted murder. Cheeni’s story had to be one of the most heart breaking one as it portrays not just child abuse but also transphobia, and how hard it gets to live in a society which has such evils perpetuating at a granular level. Tope Singh’s story talks about the class differences and how toxic it could get in shaping one’s morality.
In an attempt to draw a parallel between the recurrent theme of these four narratives and a book that I read recently,” Scarcity: Why having too little means so much” by Eldar Shafir and Sendhil Mullainathan, makes it easier to understand the circumstantial nature of cognitive thinking, In the back-story of each character that is mentioned above it indicates one thing, that there is scarcity of either money, rural safety of women, lack of resources that can make future look bleak and emphasising more on now, and lastly social scarcity where you are made to feel like an outcast due to the various societal constructs.
The effect that this scarcity has makes all the difference as to why people behave the way they behave. The case in point that the authors through the book are trying to make through their various research is that people are not poor because they do not have the skillsets or adequate cognitive thinking,but it’s scarcity of resources, which in this case is money that taxes their bandwidth of fluid thinking. It’s not that the character Cheeni in ‘Paatal Lok’ wanted to be a part of the plan that involved a murder because of a distorted moral compass, but lacked the money that was needed for her gender reassignment surgery. One could argue that not everyone who finds himself/herself in such a money strapped situation would say yes to such a deal,but should approach some reliable financial aid instrument to help them out. If that were the case then loak sharks wouldn’t exist in today’s world , but the case in fact is that they thrive in not just developing but developed economies too.
Scarcity alters how we look at things; it makes us choose differently.This creates benefit: we are more effective in the moment. But it also comes at a cost: our single -mindedness leads us to neglect things we actually value.
Scarcity: Why Having Too Little Means So Much
As the authors mention that scarcity in effect draws us time and again in the tunnel where we give into ‘present biasing‘(explained here). It inhibits our most fundamental capacities where we end up in situations or as it is called ‘scarcity trap’ from where in an attempt to exit one situation leads us into another situation, importantly because, we use the other situation to get ourselves out of the existing scarcity. For example-when the low income families take loans from one money lender to pay off the other lender because they practiced what is called ‘hyperbolic discounting‘, where they didn’t plan their resources effectively to evade the situation.This is not because of lack of intelligence but inhibited fluid thinking(due to scarcity) which could lead to miscalculated decisions and the poor do not have slack or space for miscalculated decisions. They have to make a concrete trade-off, one’s that the affluent people don’t because of the abundance of space that they have which comes in with the excess of resources they posses, and this case it being money. Economists term this as marginal utility which means that the more you have of something the less you value. Hence, mistakes made by the rich do not have have any conclusive sacrifice being made. This is similar to the the stories of the two main characters in the plot of ‘Paatal Lok’, where Kabir M. and Cheeni land themselves in a situation because of lack of money and it was a miscalculated decision, where one of them had to pay the price of one’s own life. Abhijeet Banerjee along with Sendhil Mullainathan in a research paper terms this as ‘temptation tax being regressive’ which means that it levies heavily on those who have less and in an attempt to achieve it, it can have negative effects which is proportional to the lack of the resource.
The research that is conducted by the authors, Eldar Shafir and Sendhil Mullainathan, portrays that simply raising monetary concerns for the poor erodes their cognitive performance and sometimes we perceive it as lack of moral compass when they find themselves in unfortunate circumstances. It makes one more impulsive and the more scarce some resource,which could be either time,money, or social construct, the more it inhibits the fluid intelligence. Essentially because as humans we juggle our problems(again hyperbolic discounting) and not plan out a focussed approach to get out of it.
One could argue that if the cost of errors increases proportionally with the lack of resources then why not be more careful ? Since the cost of the mistake is high like, starvation, poverty, or as in this crime drama and real life situations eventual death, one would expect to be more careful. But with the rise in scarcity, it also levies more tax on the bandwidth of our cognitive thinking and increases the chances of making the error. We are likely to cave into our temptations or act impulsively.
This eventually all boils down to how we learn to value the resource, is it relatively or do we have some internal metric ? In the above mentioned web series, the story of Tope Singh, who is shown having faced abuse on the basis of his caste makes that a dominant identity to live by and measures a lot of the daily happenings with respect to that identity. Also coming from an economically adverse background the value of this identity magnifies proportionally and leads him to make poor decisions on the basis of that, The poor, as the research in the book portrays have an internal metric for the value of money as the trade-off has real value and in the case of affluent it often relies on context. This is inherently because of lack of abundance or slack and it makes you value the resource more. Like the poor values money, busy values time, marginalised class values class identity etc.
This could make us feel that the low-income families or individuals are myopic in nature and cannot think beyond a given point of time, but their careful planning of resources in-fact negates that. The poor in-fact are not so easy to cheat on by the companies with their quantity surcharge deals, but we middle-income and high-income families fall prey to those deals. The poor try to squeeze every value out of the rupee as it has to be judiciously used and our privileged abundance in-fact values less of it. Or say the incident where Cheeni is saving up money for her gender reassignment surgery wouldn’t lead one to think that she was myopic. What one could argue is that most people who find themselves in such situations are poor managers of their existing resources. Their need to go to a loan shark who charges high rate of interest shows lack of financial education. How many of us as adults who earn are aware of compounding or say the ‘magic of compounding’?
I have grown up in an environment where investment holds high value and compounding is a principle I was taught to adhere by. To break it down in simple terms, say you invest Rs 500 monthly in a SIP for 10 years with an average of return of 9% annually, you would end up with Rs 1,00,545 on a principal investment of 60,500. Most of us can spare much more than 500 if we cut back on some of our temptations and increase our chances of evading the monetary scarcity traps.I know financial education is not the solution to the entire problem and of course it can’t be, because of the various nuances that the society contains but it is definitely a start. As Ayn Rand has said “We often think that money is the root of all evil, but what is the root of all money?” It’s the want that lies beneath it that propagates all this and if mismanaged it could have dire implications, one’s that are not so easy to escape.
Weekly Musings 