Money is time

The absurdity of having had to ask for an extension to write this article wasn’t lost on Maria Konnikova, writing recently in the New York Times:  “It is, after all, a piece on time and poverty, or, rather, time poverty — about what happens when we find ourselves working against the clock to finish something.In the case of someone who isn’t otherwise poor, poverty of time is an unpleasant inconvenience. But for someone whose lack of time is just one of many pressing concerns, the effects compound quickly.images

“We make a mistake when we look at poverty as simply a question of financial constraint. Take what happened with my request for an extension. It was granted, and the immediate time pressure was relieved. But even though I met the new deadline (barely), I’m still struggling to dig myself out from the rest of the work that accumulated in the meantime. New deadlines that are about to whoosh by, a growing list of ignored errands, a rent check and insurance payment that I just realized I haven’t mailed. And no sign of that promised light at the end of the tunnel.

“My experience is the time equivalent of a high-interest loan cycle, except instead of money, I borrow time. But this kind of borrowing comes with an interest rate of its own: By focusing on one immediate deadline, I neglect not only future deadlines but the mundane tasks of daily life that would normally take up next to no time or mental energy. It’s the same type of problem poor people encounter every day, multiple times: The demands of the moment override the demands of the future, making that future harder to reach.

“When we think of poverty, we tend to think about money in isolation: How much does she earn? Is that above or below the poverty line? But the financial part of the equation may not be the single most important factor. “The biggest mistake we make about scarcity,” Sendhil Mullainathan, an economist at Harvard who is a co-author of the book “Scarcity: Why Having Too Little Means So Much,” tells me, “is we view it as a physical phenomenon. It’s not.”

“There are three types of poverty,” he says. “There’s money poverty, there’s time poverty, and there’s bandwidth poverty.” The first is the type we typically associate with the word. The second occurs when the time debt of the sort I incurred starts to pile up.

And the third is the type of attention shortage that is fed by the other two: If I’m focused on the immediate deadline, I don’t have the cognitive resources to spend on mundane tasks or later deadlines. If I’m short on money, I can’t stop thinking about today’s expenses — never mind those in the future. In both cases, I end up making decisions that leave me worse off because I lack the ability to focus properly on anything other than what’s staring me in the face right now, at this exact moment.

“Under scarcity, you devote a lot of resources to the thing you’re lacking,” says Eldar Shafir, a psychologist at Princeton who has been studying poverty for over a decade and is Mr. Mullainathan’s co-author on “Scarcity.” “When people are juggling time, they are doing something very similar to when they’re juggling finances. It is all scarcity juggling. You borrow from tomorrow, and tomorrow you have less time than you have today, and tomorrow becomes more costly. It’s a very costly loan.”

“When Mr. Shafir first began to study poverty, he came in with an overarching assumption: The poor made the same mistakes in judgment as everyone else, except theirs ended up being more costly. He soon learned he was wrong. “They were making mistakes that were different. They weren’t the typical decision errors. They were worse,” he recalls. “When you don’t have enough, you focus on the little you have, and it leaves you with less attention.” And the “little you have,” he found, didn’t have to come from financial hardship.”

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