TOTD 2018-7-19: Karl Marx and the Pareto Principle

What if Karl Marx had known about the Pareto Principle? The Pareto Principle is better known as the 80/20 rule.

From the Wikipedia link:

It is an axiom of business management that “80% of sales come from 20% of clients”.[4] Richard Koch authored the book, The 80/20 Principle, which illustrated some practical applications of the Pareto principle in business management and life.

Marx analyzed the unfair distribution and blamed capitalism. The rich are robbing from the poor. (The money had to come from somewhere.) This makes superficial sense. The problem is how does one explain the unfair distribution in every aspect of life. Are good movie actors stealing the audience of bad movie actors? Were the Beatles oppressing all the struggling musicians to get ahead? Do tall basketball players oppress short basketball players? No. These groups have more talent therefore succeed.

As someone has written earlier, there are “hate facts”. Is the Pareto distribution a “hate fact”? The very essence of it is explaining the inequality in the distribution of things. People hate inequality. The Marxist says that the problem is the capitalist. Money causes the problem. Do they ever see the problem is the unfair distribution of college professorships? Why are there so few PhDs? Out of those PhDs, why are so few published widely? Are they stealing journal space from the lesser professors? “Adjunct professors and grad students of the world arise!”

I am thankful for getting this insight from a Jordan Peterson video. He also relates the other unfair distribution principle called the Matthew Effect. I will leave that one for another post.

Maybe just maybe if Marx had known about the Pareto Principle all the blood shed could have been avoided in communist regimes. He could have explained that the unfair distribution was a fact of life and not due to oppression.

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12 thoughts on “TOTD 2018-7-19: Karl Marx and the Pareto Principle”

  1. 10 Cents:
    The very essence of it is explaining the inequality in the distribution of things.

    It’s important to observe that the Pareto distribution and power laws are not just a property of human behaviour and institutions but are ubiquitous in nature.  The distribution of stellar masses follows a power law (there are many more small stars than large bright ones—around 75% of all stars in the galaxy are red dwarfs), as does the size of bodies in the solar system (a few large planets, many more asteroids, and far more dust particles), and the distribution of sizes of species in biology (a few large animals, many more insects, and enormously more bacteria), the frequency of extreme weather events, and on and on and on.  Power laws are a genuine law of nature, just as much as Gaussian distributions and the central limit theorem.

    When I was helping Rudy Rucker with some background research and fact checking for his nonfiction book The Lifebox, the Seashell, and the Soul, we had numerous conversations about power laws in nature and their origin in physical processes and I coined the saying, “Once Pareto gets into your head, you’ll never get him out.”  It’s been a foundation of how I look at things ever since.

    Once you realise how central power laws are to everything, any attempt by collectivists to repeal them by coercion seems just as silly and doomed to failure as repealing the law of gravitation in the legislature.

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  2. There is the corollary of not being able to get this quote, “Once Pareto gets into your head, you’ll never get him out.”, out of your head once you’ve heard it.

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  3. Tenth of a Buck, if this is “extra hot”, I’d hate to try to classify any discussion of the intemperance and idiocy of John Brennan, a.k.a. Mephistopheles.

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  4. Trinity Waters:
    Tenth of a Buck, if this is “extra hot”, I’d hate to try to classify any discussion of the intemperance and idiocy of John Brennan, a.k.a. Mephistopheles.

    Trinity, please go to your local campus and share these mild truths and report back to us. 🙂

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  5. Another power law closely related to the Pareto principle is Zipf’s Law, which states that in a corpus of natural language text, the frequency of words is inversely proportional to their rank in a table of frequency.  Restating this in Pareto terms, 80% of the text is composed of 20% of the words.

    In 2006, AOL (remember them?) released a database of twenty million search terms entered by 650,000 of their customers, who had no idea that this information would be disclosed.  This happened near the height of my obsession with things Pareto and Zipf, and I did an analysis to see how well it was modeled by Zipf’s law.

    The answer: almost perfectly.

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  6. John Walker wrote:

    Once you realise how central power laws are to everything, any attempt by collectivists to repeal them by coercion seems just as silly and doomed to failure as repealing the law of gravitation in the legislature.

    But they still try to outlaw “gravitation”. Is it because they are anti-science? Maybe before sharing this concept one should ask, “Are you pro-science?

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  7. 10 Cents:
    Maybe just maybe if Marx had known about the Pareto Principle

    More likely he would have hidden the knowledge, certainly from others and possibly from himself. After all, he stiffed his landlord, cheated on his wife, did not comb his hair or trim his beard, did not work, and probably went easy on the soap. So why should he challenge his own assertions?

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  8. jzdro:

    10 Cents:
    Maybe just maybe if Marx had known about the Pareto Principle

    More likely he would have hidden the knowledge, certainly from others and possibly from himself. After all, he stiffed his landlord, cheated on his wife, did not comb his hair or trim his beard, did not work, and probably went easy on the soap. So why should he challenge his own assertions?

    He might have realized that his ideas were not going to make sense. It is harder to sell flat earth maps when you have round the world cruises. It is harder also to sell the book, “The Impossibility of Flight” after a Wright Brothers’ demonstration.

    Funny, how those who want to better the world aren’t very nice people.

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  9. 10 Cents:
    Funny, how those who want to better the world aren’t very nice people.

    Funny you should say that just now! I am reading Serious Mr. Rogers for Grownups, aka Dr. Jordan Peterson, who admonishes us (in paraphrase) to clean your room before you try to fix the world.

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