I was watching a lecture which discussed the Pareto Principle, otherwise known as the 80-20 rule – and it does have some depressing implications.
First is that the goal of “equity” – that is equality of outcome (not to be confused with equality of opportunity) seems to not only be a futile endeavor, but could be dangerous one too. We want to strive for the latter, not the former.
The short of the principle is that 80% of something will be distributed to 20% of the population that’s vying for it. And this phenomenon manifests itself so reliably – that it can practically be considered as a natural/physical law.
So how does this play out in the real world? All the world’s money will go to 20% of the population. And only 20% of that subset will get 80% of the wealth – and so on… until you get the statistic similar to “1% of the world’s richest have half of the world’s money.”
The sad part is that this seems to apply to practically any endeavor. So 20% of aspiring musicians get to be musicians, and 20% of those will be successful. etc. Basically 80% of the attempts at anything will fail and end up with next to nothing – and 20% will get most.
What’s sadder still, is that this happens regardless of [having malevolent] intent – its simply the product of a competence hierarchy. So while you can certainly exacerbate it by having power and abusing it, but like in the case of a free market’s preference in musical icons, it also just happens simply because people will support those who they feel are best at what they do – which is not an unreasonable preference to have.
Even if we all started truly equal, if you let this play out, the same thing will likely happen: those who are more clever get most – in fact it’s highly likely that ALL resources will ultimately consolidate to one entity if we naturally let it run its course uninterrupted. 1 The game of Monopoly was given as an example I mean it’s already kinda true with that whole 1%… just means that it’ll further likely continue to consolidate unless those people literally just give money away – and I don’t mean even on the philantrophic level. The amount of money people like Bill Gates donate is staggering, but it doesn’t seem nearly enough to “redistribute” the consolidated wealth to make it overtake the rate at which this principle tends to unravel.
Is Capitalism the Culprit?
What’s happening as far as poverty goes doesn’t seem to be a “shortcoming” of capitalism but a feature. An undesirable one (and certainly exacerbated by corruption) but a feature nonetheless. And it’s a feature that’s not exclusive to capitalism (as the free market example of musical success goes)
Unless the world can move away from the concept of “competition” – from competing for finite “resources” or the simple fact of having preference based on expertise, I don’t see how we’re getting out of this inevitability.
Why is it “dangerous” to base actions/policies on the concept of “equity”? Well, because to do that you’d also have to accept that possibility that there are a number of people better than you who simply never had the opportunity… and like I said, if absolutely everyone in the world started equal – given the inevitability of this principle – the outcome of poor/rich will likely still be the same – but this time it it might be you that’s in the 80%. Do you really want to take that risk?
Also, it undermines the whole value of a competence system (or meritocracy if you’d like) which may have negative effects on a society. For one, you literally de-incentivize your best performers.
I forget the exact details, but the lecture went on describe a point in history the where the best farmers produced most of the food (as expected from the principle) – and had naturally benefitted from their industriousness. Because of resentment generated by the inequity with regards of the “fruits of labor” (again, as expected from the principle) they were killed by fellow farmers… resulting in everyone starving.
So when someone says “instead of complaining, just be grateful” – consider that they might not be entirely devoid of compassion. It’s a pragmatically reasonable stance to take.
Giving people the false hope of “equity” frankly, might just exacerbate the resentment already present from the inevitable inequality. Because now, it’s not just about someone being fortunate enough to have more than you; now, you’ll be thinking they are undeserving of it – and take that far enough and you’ll think they stole if from you. That is a really destructive mindset to have. If you’re aware of the book of Genesis – this is a mindset similar to Cain in the story of Cain and Abel – it doesn’t end well.
Another option of “realizing equity” is to [tyrannically] compel people… like communism – and we all know how that turned out.
You get the idea. Inequality is caused by a myriad of things, but its basically inevitable given how a society functions. The only times inequality was reliably “flattened” was in the aftermath of great death. (calamity, famine, plague, war, etc.)
[Equality of] Outcome vs Opportunity
We want equality of opportunity (despite the risk of it flipping the tables on us) – not “equity.” We certainly are fortunate – but most of us would like to sleep at night knowing we actually deserve to be where we are. So striving for equality of opportunity is certainly a worthwhile goal if only to keep our sanity 😛
So context of capitalism – unless we’re ready to just give up everything we have to people who we can’t really determine are deserving, the best we can do is do what we can to help those people have the same chance as we did to prove their worth. Level the playing field – but don’t rig the prizes.
That said, what worries me is that assuming equality of opportunity has actually been realized – I can’t help but feel the inevitability of the Pareto principle still dooms us to some form a dog eat dog sort of scenario down the road. Again, like in Monopoly, everyone starts equal, but one person ultimately takes everything.
The great Equalizers
As mentioned earlier – death seemed to be the common denominator in the events that have brought a considerable amount of “equalization” – and it’s depressing to think of the implications of that fact/truth.
Like imagine if there were no wars etc. But we eventually ran out of natural resources. Will our human nature just let ourselves just “starve and die” because taking more than what could be ‘rationed’, would mean someone else would starve/die?
We probably could sacrifice ourselves, but can we do the same with our kids? Just watch them die if they happened to be “weaker” than the rest? Probably not an easy decision to make when the cards are down
It seems these “events of great death” kept most of us from crossing such moral dilemmas (because we could still blame something other than ourselves) I guess criminals have crossed this sort of dilemma one way or another out of desperation – but still, we try to dissociate our morality from theirs simply because we were fortunate enough to have a choice.
But there MIGHT come a time we’ll have to face the issue collectively as a society – a time where there will be no escape from the choice of choosing yourself (and what’s yours) over someone else(‘s)
Overpopulation seems to be an issue only because the people aren’t distributed properly to utilize the “places” that can still be cultivated and where [new] societies can flourish. It’s an issue of congestion among other things. But if we assume that we don’t find a way to balance our consumption and cultivation of (and production from) natural resources 2 Assuming we’ve stopped DESTROYNG nature as well – then overpopulation will be the immediate threat – then what are we gonna do? If we don’t find a way to restore the resources, or find another planet to colonize, the only solution will literally be culling of the population. When that day comes unlike with wars, we’ll all be complicit in the decision – and we won’t get to take any moral high ground unless we just voluntarily keel over.
I really don’t know what to conclude – this post was more of a reflection really.
I don’t think capitalism is at fault, but I do hope we find some way past “currency” or “competence” or “competition” – but I honestly can’t think of anything that might work.
Inequality exists and is a problem we really have to solve, but if we’re approaching it from the angle of gunning for equity – then it seems like we might just dig a deeper hole for ourselves.