Poverty: How scarcity captures the mind and paralyzes the brain

Source: The cognitive cost of scarcity: How poverty steals the mind

"Scarcity captures the mind... The resulting intrusive preoccupation reduces mental 'bandwidth.' We found that the effect of poverty is equivalent to a loss of 13 IQ points... To put this in perspective, 13 points is the difference between an average adult and someone who is effectively a chronic alcoholic. This is also comparable to the cognitive impact of losing a full night of sleep."

(Sendhil Mullainathan and Eldar Shafir, "Scarcity: Why Having Too Little Means So Much", 2013)

Explanation: A siege on the mind: The science behind 'poverty drives a person out of their mind'

This is one of the most important studies in the psychology of poverty. The researchers demonstrated that poor people do not make bad decisions because they are less capable, but because their brain is under "siege." The Sages said, "Poverty drives a person out of their mind," and science confirms it: existential anxiety consumes all the "working memory" in the brain, leaving zero room for long-term planning.

Perspective: Existential anxiety as background noise: Why those of us who are well-fed miss the picture

How easy it is for those of us who are well-fed to judge the poor. We see someone in financial distress buying a Tesla or just an expensive phone and cluck our tongues: "If only they had financial literacy." This study proves that poverty is not the result of foolishness, but that foolishness is the result of poverty, and the remedy is a better quality of life. Existential anxiety is a relentless background noise that paralyzes the brain. Of course, voluntary poverty—let's call it histapkut be-mu'at (being content with little)—does not manifest symptoms of foolishness, and perhaps quite the opposite, because up to the line of absolute poverty, a person can choose not to be in a mental state of poverty.

Going Deeper: The Canadian experiment: When you remove the noise, humanity returns

Proof that this condition can be "cured" came from the Mincome experiment in Canada (1974–1979). For five years, all residents of the town of Dauphin received an unconditional guaranteed income. The results (analyzed only years later) were astounding: not only did poverty disappear, but hospitalization rates dropped, mental health improved, and more teenagers finished high school. The experiment proved: when you remove the "noise" of economic survival, human beings do not become lazy; they become healthier and smarter. One must bear in mind that such an experiment, when attempted on entire nations, failed, and communism only made people's situation worse.

Culture: Squid Game: A parable about logic disappearing when scarcity takes over

The series Squid Game is a harrowing parable of the "state of scarcity." The contestants are ordinary people who fell into debt. The financial pressure is so immense (their "bandwidth" is completely consumed) that they agree to enter a game with a 99% chance of dying, just for a shot at resolving their immediate distress. Logic vanishes when scarcity takes over.