{
    "href": "/post/2013/12/12/the-8020-rule-leads-to-the-1/",
    "relId": "2013/12/12/the-8020-rule-leads-to-the-1",
    "title": "The \"80/20\" Rule Leads To The 1%",
    "author": "pmjones",
    "markup": "html",
    "tags": [
        {
            "href": "/tag/economics/",
            "relId": "economics",
            "title": "Economics",
            "author": null,
            "created": null,
            "updated": [],
            "markup": "markdown"
        }
    ],
    "created": "2013-12-13 00:15:31 UTC",
    "updated": [
        "2013-12-13 00:15:31 UTC"
    ],
    "html": "<p>The 80/20 rules, formally known as the <a href=\"https://en.wikipedia.org/wiki/Pareto_principle\">Pareto Principle</a>, is a common rule-of-thumb in lots of situations.  In general, it says that 80% of all effects in a particular situation comes from only 20% of the causes in that same situation.  If you can eliminate the right 20% of the problem <em>causes</em>, then you can get rid of 80% of the <em>effects</em> from those problems.</p>\n<p>Reading Taleb's <a href=\"http://www.amazon.com/Antifragile-Things-That-Gain-Disorder/dp/0812979680/\">\"Antifragile\"</a>, he points out that the complaint against \"the one percent\" holding 50% of the wealth in the country is a natural outgrowth of the 80/20 rule.  There's no conspiracy, it just works out that way.  Of the top 20%, 20% of them will hold 80% of that wealth; of that subgroup, another 20% will hold 80% of that wealth, and so on.  Eventually we find that about 0.8% of a population will hold about 51.2% of the wealth, just as a rule-of-thumb.  So, a baseline point of 1% of the population holding half the resources doesn't seem that out of line to me, mathematically and statistically speaking.</p>\n"
}