Most people growing up in the Sixties to Nineties in India had what I describe as the “scarcity mindset”. Things started to change from late Nineties, and now young Indians in India present a vastly different mindset.
The “scarcity mindset” refers to the actual scarcity of consumer goods, combined with low incomes which did not even allow consumption of the poor quality consumer items then available in India. I would say that low incomes in a low growth country with immense potential created a generation of folks who scrimped on everything from food to foot wear, and that includes yours truly, of course.
The socialist government of India, run by the Congress Party, was instrumental in ensuring the industrial development of India while not allowing the development of consumer-oriented, open market. Since the economy grew very slowly, and sometimes not at all, the real income generated in the hands of the people was not adequate to provide even the basic necessities of a rather tough life. I always used to wonder why we could not have the items imported from overseas, if we could not produce the same ourselves in India. Why should we bring even chocolates, biscuits, and nuts from abroad? I can understand the need for bringing liquor, but not the rest of the items.
The “scarcity mindset” got strongly embedded in our psyche back then, and unfortunately, it refused to leave our being even after we had moved on in our lives – away from India in many cases, like mine. I used to joke about the “data switch” in my brain, which multiplied the price of everything by the foreign exchange conversion rate, and constantly rattled me. Well, that data switch is now gone for good, but the need to maintain a “scarcity mindset” continues in its logic and approach. This has been the case, even after I could access all those “scarcity” items at ease, even in India now!
The positive outcome is that there is always a questioning approach in my mind, seeking to establish a real value of something that I wish to procure. It could be a TV, or a new refrigerator, or a new pair of shoes. Everything goes through the same tough filter, which has been revised over the past several decades to such an extent that it is very hard for something to easily slip through. This is despite the fact that in Singapore the price of an item could be lower than that of the same item in India (it is true and it is possible), and so could have been easily justifiable. The issue is the basic necessity of an item which is not very urgently required. The “casual” manner in which we spend our discretionary income is strongly discouraged in the “scarcity mindset” environment.
The youngsters of today do not, obviously, understand the rationale or the need for a “scarcity mindset” when there is actually no scarcity of any kind even in India. It is hard for me to educate my children on this aspect of my life, which is still alive in my brain. This feeling got accentuated when a business friend of mine from India mentioned it on his own unprompted, which told me that I am not unique – there are plenty others who have the same feeling and the same challenge of dealing with the youngsters in their families.
I would argue that the “scarcity mindset” is helpful in dealing with downturns in life. I have faced downturns in life, and I could easily pass up things that others would consider essential for their livelihood. I see the “African Voices” segment on CNN and could easily visualise the poverty and lack of food that are prevalent in the African continent. The other day I saw children chasing a truck which was handing out water bottles, not unlike the scenes witnessed in India couple of decades ago, and even now in some parts of the country. These real happenings demonstrate that scarcity does exist, poverty does exist, lack of food plagues children across the world even now, and if only the world could spend 10% of their total defence expenditure on poverty alleviation, the world would become a much better place with less hunger amongst poor children. The world spent approximately USD 1.8T (1,800B) on defence last year.
I am proud that I maintained a frugal mind but not a cheap mind (!). I just do not spend on my own needs, but spend on others in my family of course. Should I get a Mont Blanc wallet or belt? The answer is a strict “No”, as the brand does not distinguish me in any way. It should be the other way around, if at all. Most of my personal items are brandless, except for my fitness watch which is a Fitbit, but Fitbit is not considered the top end of the range for fitness watches – it is every man’s fitness watch, not an Apple or a Garmin watch. Such a mindset does not mean that I would go in for a low quality product. It is just not price, it is avoidance of luxury and rejection of luxury as a mindset.
This approach has helped me throughout my life, and I have no intention of abandoning it, despite prodding from some family members. I question the need for luxury, when its sole purpose is to show off to the rest of the world that you have indeed “arrived”. It is absolutely unnecessary. I consider the only Zegna suit that I bought as an excess of a frivolous mind, influenced by a high class mentor, and have subsequently trained it to focus on suits that can be bought readymade in specialty clothing outlets, for example JC Penney or Nordstrom, while travelling in the U.S., or at outlet malls which provide brand names at 35% of the retail prices downtown.
I would strongly advise the new generation to look at the actual need for an item before spending on it. Make an assessment of the need. Make an estimate of the price that you are willing to pay. Don’t go blindly after a brand in an expensive mall. Look at alternatives. Look at online shopping. In a nutshell, do whatever is necessary to curtail discretionary spending, while investing in planned spending for yourself such as online courses on Blockchain, AI, ML, etc.,
I hear you laughing.
Have a great week ahead,
12th May 2019