ONE OF the main issues raised by the Occupy demonstrators is the unfair distribution of wealth. Their slogan focuses on the extreme difference between the richest and the poorest. ''We are the 99 per cent,'' say the banners and T-shirts, pointing out that 1 per cent of the world's population has somehow clawed its way to disproportionate money and power. Time to do something about this unnatural distribution, no?
The economist Edward Wolff, of New York University, has pointed out that, as of 2007, the top 1 per cent of households in America owned 34.6 per cent of all privately held wealth, and the next 19 per cent had 50.5 per cent of the wealth. This means 20 per cent of the people owned 85 per cent of the wealth, leaving 15 per cent for the bottom 80 per cent of the people. No one who is interested in an equitable society can fail to be irked by this unfairness.
But it is, unfortunately, not unexpected. What the protesters are fighting (consciously or unconsciously) is the 80-20 rule - variously called the Pareto principle, Zipf's law, the long tail or Benford's law, depending on what you are studying - a staple in scientific, economic and business textbooks. It's the go-to idea to show how the frequency of a set of natural events is not always what you might recognise as, well, natural.
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The maths underlying the 80-20 rule, known as the power law distribution, is found in many natural systems over which no single human has much influence. Its concentration of the extremes seems built into the fabric of complex systems that depend on many factors that continually change over time.
The simplest version says 80 per cent of sales come from 20 per cent of your customers; that 80 per cent of the world's internet traffic will go to 20 per cent of the websites; 80 per cent of the film industry's money gets made by 20 per cent of its movies; 80 per cent of the usage of the English language comprises of 20 per cent of its words. You get the picture.