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To: No One Special
Pareto's Law does apply to nearly every biological system. By the way, it's also true for any group within the group. So, for example, if you're looking at the top 20%, you'll find that 20% of them produce 80% of the top 20 percent's wealth. If you take the top five richest dudes in the world, you'd find a similar distribution, at least over time. I like to think of it like Russian matryoshka dolls.

It's like a gyroscope. You can push it one way or the other, but it will tend toward the 80/20 split.

Like I said, it relates to energy conservation in biological systems. There's a branch of economics called "econophysics" that developed from this insight.

But, it's not news by any stretch of the imagination. Guys like Krugman surely know that any system will move to the 80/20 split.

32 posted on 11/23/2012 6:41:26 PM PST by Gluteus Maximus
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To: Gluteus Maximus
Thought you'd be interested in today's quote from Cafe Hayek:
It is not the countries with abundant raw materials that have grown fastest, and often they are held back, because natural assets give rise to internal conflicts. No, the main reason for the 20 per cent [of the world's population] consuming 80 per cent of resources is that they produce 80 per cent of resources. The 80 per cent consume only 20 per cent because they only produce 20 per cent of resources. It is this latter problem we ought to tackle, the inadequate creative and productive capacity of the poor countries of the world, instead of waxing indignant over the affluent world producing so much. The problem is that many people are poor, and not that certain people are rich. - Johan Norberg
The post is here.
33 posted on 11/24/2012 2:15:07 PM PST by No One Special
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