Perception Drives Collapse
Scarcity is as much a psychological phenomenon as a physical one
March 2020, supermarket shelves across the globe cleared of toilet tissue, pasta, sanitiser, everything that looked essential. The virus was real, the threat legitimate, but the empty shelves told a different story.
They revealed something more fundamental about human nature.
In a blink, consumers created scarcity through fear alone.
The perception of resource shortage, not the mathematical reality of it, triggers the breakdown patterns we observe across history. Widespread panic, social fragmentation, political upheaval. These emerge when populations collectively decide that essential resources are disappearing, regardless of what the inventories actually show.
In Australia at least there was never going to be a shortage of toilet tissue as supplies and transportation operated normally throughout the pandemic. But people carted out trolley loads nonetheless.
The mindful sceptic lesson is that scarcity is as much a psychological phenomenon as a physical one.
Confusing the two distorts our understanding of crises. It can even create them.
Counterpoint
Abundance cannot cure the psychology of shortage.
But the conventional wisdom follows the logic that material scarcity drives social breakdown, so material abundance prevents it.
Increase food production, secure energy supplies, stockpile medical equipment. Fill the warehouses and calm the masses.
Demonstrable abundance is a seductive narrative because it promises technical solutions to human problems. Governments can build strategic reserves, economists can calculate optimal distribution models, engineers can design more efficient systems. The problem becomes a matter of logistics rather than psychology.
But perception doesn’t work like that at all.
People hoard when they feel threatened, not when supplies are genuinely low. They riot over rumours of bread queues, not actual hunger. They elect demagogues who promise to protect them from manufactured enemies, not real ones.
The uncomfortable truth is that societies with vast material wealth still experience psychological scarcity.
The richest nations on earth watch their populations stockpile ammunition, prescription drugs, and canned goods against imagined catastrophes. Material abundance offers no protection against the stories people tell themselves about shortage.
Thought Challenge
Trace the fear cascade... Choose a recent shortage panic from, say, cryptocurrency crashes, housing markets, energy prices, food supply chains. Map the timeline backwards. When did the buying behaviour begin relative to actual supply data? Identify the gap between perception and reality.
Run the abundance test... Pick a current resource anxiety dominating headlines. If there was unlimited physical availability of this resource, would it eliminate the underlying fear? Or would the anxiety simply migrate to something else? Most scarcity fears are displacement behaviours, not rational responses to shortage.
Both exercises sharpen the sceptical instinct. Instead of accepting scarcity narratives at face value, you learn to distinguish between material constraints and psychological constructions. The difference matters because the solutions are entirely different.
Closing Reflection
Being a mindful sceptic means recognising that the most dangerous shortages are often the ones that exist only in our collective imagination. The pantry might be full while the society empties itself of trust.
Scarcity is a story we tell ourselves. The question is whether we’re writing it consciously or letting it write us.
Evidence Support
Roux, C., Goldsmith, K., & Bonezzi, A. (2015). On the psychology of scarcity: When reminders of resource scarcity promote selfish behavior. Journal of Consumer Research, 42(4), 615-631.
TL;DR… cues and reminders of scarcity—regardless of actual supply—drive individuals to behave more selfishly and hoard resources. The experimental data indicate that scarcity cues alone can reshape priorities and undermine cooperation.
Relevance to insight… central as it decouples the material reality of shortage from the psychological effect, illustrating that manipulation or observation of scarcity cues are enough to change social conduct. It corroborates the contrarian view that abundance does not immunise populations against panic.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. Times Books.
TL;DR… comprehensive book distils research showing that scarcity—especially when subjectively experienced—hijacks attention, triggers stress, and leads to irrational and sometimes counterproductive behaviour. The authors emphasise that scarcity is largely constructed in the mind, with tangible social consequences.
Relevance to insight… The volume argues for an ecosystem approach to risk management, one that places psychological feedback loops at the centre rather than mere numerical abundance. Its synthesis offers a critical challenge to the idea that enough supply alone cures collective fear.