Wednesday Wisdom

WHO?

Vilfredo Federico Damaso Pareto was an Italian economist, sociologist, and philosopher, who lived from 1848 to 1923. Pareto was also a professor of law and social sciences and published works on sociology and political science. He was a member of the Italian Senate and was a prominent figure in Italian politics during his lifetime. While working in his garden, he noticed that 20% of his plants produced 80% of his green beans. As an economist, he noticed that 80% of the land in Italy was owned by 20% of the population. He continued to find this pattern across many aspects of life in what is known as Pareto's law/principle or the 80/20 rule.

What he produced

Pareto was also a proponent of the idea that wealth and income distribution in society follow a power law distribution, now known as the Pareto principle or the 80/20 rule. According to this principle, approximately 80% of effects come from 20% of causes. This principle has been applied to many fields, including business, economics, and personal productivity.

In business and economics, the Pareto principle suggests that a significant portion of a company's profits may come from a relatively small number of its customers, products, or services. Therefore, businesses can use the principle to identify their most profitable customers, products, or services and focus their resources on them. This can help them maximize their profits and improve their efficiency.

In personal productivity, the Pareto principle suggests that 80% of one's results can come from 20% of their efforts. Therefore, individuals can use the principle to prioritize their tasks and focus on the most important ones, rather than trying to do everything at once. This can help them be more productive and achieve their goals more efficiently.

Derek J. de Solla Price, a British-American physicist and historian of science who lived from 1922 to 1983. Price was also a professor of the history of science at Yale University and authored several books on the history of science, including "Little Science, Big Science" and "Science Since Babylon." He was a fellow of the Royal Society and a member of the American Academy of Arts and Science. While reviewing academic papers he found an interesting trend which can be applied across various industries. He realized that 50% of all papers produced by a small number of researchers. Price surmised that the square root of all the authors produced 50%, or for example if there were 100 papers and 25 authors, 5 would produce 50 papers.

2023 why do we care?

Both Pareto's principal and Price's law describe a power-law distribution, which is a small percentage is responsible for a large percentage of a given output. Power laws of distribution are important for everyday life because they provide a logical framework for understanding how seemingly chaotic data can be understood at scale. Power laws describe a relationship between two variables where a change in one variable leads to a proportional change in the other variable, with the relationship often being nonlinear.

These power laws more importantly describe the relationship between simplicity and efficiency. While the ancient philosophers may not have mathematically described power these laws, they clearly understood the principle. 

In 49 AD, Roman stoic Seneca wrote a letter to his friend Paulinus titled "On the shortness of life". In the letter he writes "It is not that we have a short time to live, but that we waste a lot of it. Life is long enough, and a sufficiently generous amount has been given to us for the highest achievements if it were all well invested. But when it is wasted in heedless luxury and spent on no good activity, we are forced at last by death’s final constraint to realize that it has passed away before we knew it was passing. So it is: we are not given a short life, but we make it short, and we are not ill-supplied but wasteful of it."

Perhaps it was the Italian Pareto who put the mathematical logic to the Roman stoic Seneca's philosophy.

And now you know...

Philosophy is the art of thinking, the building block of progress that shapes critical thinking across economics, ethics, religion, and science. 

METAPHYSICS: Literally, the term metaphysics means ‘beyond the physical.’ Typically, this is the branch that most people think of when they picture philosophy. In metaphysics, the goal is to answer the what and how questions in life. Who are we, and what are time and space?

LOGIC: The study of reasoning. Much like metaphysics, understanding logic helps to understand and appreciate how we perceive the rest of our world. More than that, it provides a foundation for which to build and interpret arguments and analyses. 

ETHICS: The study of morality, right and wrong, good and evil. Ethics tackles difficult conversations by adding weight to actions and decisions. Politics takes ethics to a larger scale, applying it to a group (or groups) of people. Political philosophers study political governments, laws, justice, authority, rights, liberty, ethics, and much more.

AESTHETICS: What is beautiful? Philosophers try to understand, qualify, and quantify what makes art what it is. Aesthetics also takes a deeper look at the artwork itself, trying to understand the meaning behind it, both art as a whole and art on an individual level. A question an aesthetics philosopher would seek to address is whether or not beauty truly is in the eye of the beholder.

EPISTEMOLOGY: This is the study and understanding of knowledge. The main question is how do we know? We can question the limitations of logic, how comprehension works, and the ability (or perception) to be certain.