The 80/20 rule for almost everything
inequality is inherent to everything in life. And its not a 50/50 ratio, rather more like a 80/20 setup.
The Pareto principle, also known as the 80/20 rule, states that roughly 80% of effects come from 20% of causes. This rule is applicable to almost every aspect of life: business, economics, time, decisions, resources and politics to name a few.
The principle comes after Italian economist Vilfredo Pareto observed in 1906 that 80% of the land in Italy was owned by 20% of the population.
Following such principle can help us identify the most important decisions in our lives and prioritize them accordingly. By focusing on the vital few, rather than the trivial many, we can achieve more with less effort. Many people apply it to daily life by wanting to become more efficient, productive, and fulfilled.
It is also a powerful tool to view the world with. for example it can identify power concentration, resource allocation, and most importantly leverage. If you take the top 20% of performers and look within that group, you'll find that 80% of their output comes from 20% of them. And again within that 20%. It recurses infinitely.
Broadly, life isn’t symmetrical — it’s fractal. The inherent inequality perhaps is not man made, instead it is a law of nature attributed to an error in design.
A list of how the principle is observed in our life
Note: 80/20 is metaphorical. The goal here is to shed light on power concentration of cause and effects. To add, such examples are not static.
Wealth & Economics
20% of the world's population owns 80% of its wealth. 20% of landowners hold 80% of the land. In business, 20% of customers or products generate 80% of a company's profits. In investing, 20% of your holdings drive 80% of your portfolio's growth.
Work & Productivity
20% of your tasks produce 80% of your results. In meetings, 20% of participants make 80% of the key decisions. 20% of your skills shape 80% of your employability.
Learning & Growth
20% of the material you study accounts for 80% of your understanding. 20% of the people in your life are responsible for 80% of your happiness.
Health & Wellbeing
20% of your habits and behaviors drive 80% of your wellbeing — or the decline of it.
Society & Environment
20% of cities generate 80% of a country's economic output. 20% of emission sources are responsible for 80% of total CO2 output.
Culture & Entertainment
20% of songs make up 80% of what plays on the radio. 20% of all films released take home the majority of box office profits. 20% of all books generate 80% of total book sales.
Physics & Energy
Only 20% of generated energy, whether from a combustion engine, an electricity grid, or a solar panel is actually put to use. The remaining 80% is lost as heat, friction, or transmission waste.
Wait…does that mean that there could never be equality in our world?
I leave that for you to ponder…