Most of you might be familiar with the pareto principle, or the 80/20 rule. Basically it states that 80% of effects stem from 20% of causes. The belief has gained momentum lately with few popular books in economics and business but I believe it is flawed.
The 80/20 principle is extremely loose. One could say that it goes against basic rules of probability and statistics. Upon close examination one can easily note that there is no factual or consistent evidence to estimate the 80/20 distribution other than post-hoc measurements in specific cases such as when it comes to particular types of wealth distribution, factory production, or accidents. Even when those 80/20 instances are accurately predicted, they can be classified as confirmation biases. The focus is too narrow and we can easily fool ourselves by picking the constituents that fit our predictions .
It is understandable that humans prefer a generic rule of thumb to measure situations in life. Nonetheless, there is no real way to measure if something stems from 10%, 20% or 50% of something. The measurements are subjective because they are based on our own interests and most likely in close entropic systems. What generates 80% of profits for example might cause another company to be in economic ruin. Mathematically it cannot apply in cross examinations.
My own theory is the -(minus)1 / 99+(plus) but only holds on extended time scales. This theory also requires a much broader perspective of things rather than focusing on daily menial human endeavours such as growing peas or executing a task at work. Take for example life on earth. (99+)% of all species that ever existed are now extinct. Only (-1)% survives. The estimate might be rough but due to the massive scale of events it becomes much more accurate when we factor of time. Time not only reinforces this theory but also protects it. For example, when it comes to the survival of species large scale cataclysmic events reinforce the -1/99+ principle. In the same respect (+99)% of all mammals that exist on earth come from (-1)% of species that made it through the last mass extinction event.
When it comes to human endeavours I like to apply this theory to religion, philosophy and science because they are broad human inquiries that span across thousands of years. At some point in our history religion helped us evolve and deal with the world around us. It maintained cohesion in groups and drove the development of culture. It was essential for our survival and a pivotal part of our evolution. At the very beginning, thousands of Gods sprouted from a vast array of animals and natural events. The (-1)% of those animals made it to the pantheon due to their uniqueness. Later on more human-hybrid Gods were worshipped (such as in the case of Hinduism and Egypt). As time progressed the number begun to diminish drastically with the latest, most popular monotheistic religions worshipping only 1. There are approximately 16000 religions on earth and yet only 5 are the most popular with the most followers. Yet again, another example of the -1/99+ principle.
As more and more religions covered the surface of the earth we begun comparing and debating the nature of their existence. We started asking more elaborate questions and thus we came up with what is known today as Philosophy. Philosophical thought survived from a tiny part (-1%) of religion — the forbidden enquiries that weren't so popular. These challenging questions went against the very nature of belief, eventually bringing its demise. Over the span of thousands of years this is how religions came to wither away under the (-1%) of their own weight. This was more than evident during The Enlightenment and The Renaissance.
Today, we watch a similar pattern with the advancement of science. Epistemology is (-1)% of philosophy yet it gave birth to an entire new way of viewing things — science — making general philosophical enquiry almost obsolete. Epistemology did to philosophy what philosophy did to religion. It advanced biology, physics, chemistry and math to the point of making philosophy irrelevant to current advancements.
We can still see priests and philosophers around — heck, The Catholic Church still reigns and philosophy is still taught in schools. Some jobs even hire philosophers as think tanks and the major "philosophy of X" is quite common. In much the same way, religion had to move into new-age christianity, buddhism-christianity, pop-culture spiritualism and other rebranded ideas. All are still somewhat relevant still but they are they are only relics of human enquiry much like chiropractic medicine and homeopathy. Much like shitcoins, nothing really goes completely away even though they are essentially useless.
Stephen Hawkings explained this perfectly in the introduction of his book "The Grand Design". He pretty much said that philosophy is dead and the culprit is physics. Philosophy, much like religion cannot and have not kept up with science and thus they have become obsolete.
Science itself right now is going through the same -1/99+% rule. Many fields are a complete joke and cannot hold their epistemology together when hard data are introduced. -(1)% of psychology has produced neurobiology that is rendering psychology itself obsolete. -(1)% of anthropology is doing the same thing to sociology. (-1)% of planetary science is doing the same thing to astronomy which itself did the same to astrology. In the past (-1)% of alchemic practises gave us modern chemistry.
When it comes to markets I see the same trend with cryptocurrencies. FIAT money gaves as digital money. (-1)% of all that code gave us the blockchain that then gave birth to (-1)% Bitcoin that currently rules the entire market of hundreds of coins. When it comes to world wealth (-1)% of all individuals produce and maintain almost (99+)% of everything we see around us. In computer advancement (-1)% (Microsoft & Apple) rule (99+)% of all the market.
I would be interested to hear your thoughts about this. For the last 10 years now it has not failed me a single time when it comes to predicting roughly the demise and rise of some concepts.
Been thinking about this post for a while. I think the 80/20 thing represents a power law distribution, and I think the -1/+99 represents a notion that, if you can't tell beforehand it's a power law distribution, then fuck it.
But, when it comes to crypto and evolution, it's easy to take god's view when it's convenient and a time sensitive view when it's a little more convenient. I think almost all blockchains will probably die, and there's no reason to think there will be a limit to them, but at any given time they're out there, trading on a number of factors, tech, community, marketing, history, faith etc. I think, when we think of macro-life, the -1/+99 is probably right, but the micro is an entirely different story, we really don't know enough, and probably never will to assert something like that rule, and it would pertain to the vast majority of the argument. I know there are bacteria are in an unending race against their food/predators, and that there are some that have been unchanged in millions of years, like, literally the organism itself is still living. I think crypto will become more organic as decentralized exchanges continue to appear and become viable, and I think a lot of them will just continue to exist in their small little ecosystems. I never understood why mintcoin ever existed, and despite being banished from polo, it still does, and will as long as one guy has the client running, also primecoin, will probably always keep being mined since it's mathy, but otherwise providing no prospective utility to a user.
But while life comes in all shapes and sizes, I'm not really sure there's a strait continuity from Blue Whale/aspen grove to bacteria/virus/prion. There's no coinmarketcap for biology. And anyways, metaphors only get us so far.
exactly. this was my rhyme of thought. More or less how entropy 'settles down' when it comes to the second law of thermodynamics. (closed systems given enough time passes).
Yeap, this was more like a thought experiment mainly to tackle the 80/20 rule. more or less try to falsify it by applying another metric with some generic observations.
so far i am really happy with the answers I am getting.
The text of this blog post uses 66 different characters (excluding spaces).
Its total length is 5161. The total number of occurrences of the most frequent 14 characters is 4137.
In other words, 14/66=21% of all the different characters are responsible for 4137/5161=80% of all the text!
I believe you are indeed close with the -1/99 for quite a few things. I just struggle with the concept of it having to equal 100. Cause and effects should in my view not have to add to 100 as they are not taken from the same pool. I think that it could also be that for example 25% of causes can determine 90% of effects, to name some arbitrary numbers. It has a nice ring to it when you make it add up to a 100, but has no value for me. Anyway, I have looked at your other posts as well and I like what i am seeing so will follow you. Wish i had the same amount of followers as you do (working on it ;)) Cheers
I wouldn't worry so much about followers as number of upvotes from said followers. Of all of the followers I have, only a handful are active on this site, and even fewer upvote my content.
thank you
You seem to have a narrow view of philosophy when you say it has been made outdated by advancements in science. What then of fields such as Ethics and it's subdivisions (concerning medical advancements, AI, changing society)? It seems almost like you seem to embrace scientific/empirical truths which provide hard data as the only valuable things, but to me this seems like a very narrow view of the world. While philosophy may be outdated to shed new light on the material world, there is much more to the world we live in than just matter and things. Try explaining society, love, friendship, loyalty, free will, etc. in the ways of hard data and maybe then philosophy and soft sciences will be obsolete.
To me, science is just a tool, not a religion.
Ethics are not needed for scientific advancements. This has been more than evident in the past. In other works the science can work and humans without a philosophy degree can still take the decisions. Ethics are subjective.
I don't embrace just hard data. I am saying that philosophical thought or spiritual contemplations can be done by anyone. No need for specialisation. An empirical scientist can do just fine in the philosophy department.
We can and we have been doing this and it is a much better way to do it rather than explaining it through philosophy.
yes. science is a tool. nobody said otherwise. I am just saying that philosophy is dead. Epistemology is essentially philosophy 2.0.
" For the last 10 years now it has not failed me a single time when it comes to predicting roughly the demise and rise of some concepts."
Applying a similar reasoning, what would you say would happen to steemit ? ;)
1% of coins will survive. 99% will perish.
Right now Steemit is the only one with a viable product along with a few others. In the area of social media is the leader. I believe Steem will survive and get adopted widely. Heck, even other social media sites can borrow the scheme.
As for Steemit the platform itself I am not sure. Steemit.Inc seems to be putting the resources on Steem rather than the platform which reinforces my view.
@kyriacos your analysis is valid however depends on the specific situation and the entity in question...on the other hand, I always enjoy your post...well written indeed, upped.
I believe that this is a mathematical attempt to express the reality that all of what we call life represents a dissipative structure.
This means random organization, sprouting like fractals off of the energy that flows past us towards heat death.
As the organization is essentially random, much of what exists does so because it can rather than because there is a reason or point for it to. Very little of whatever dissipative structure forms today will serve as a building block for anything in the future.
The development of the system we call life is like a blind man feeling his way through a maze. Most of his attempts, because they are random, will fail.
This is simultaneously a weak and yet powerful way of creating an organization. It allows anything that can to play, but forces all things to prove themselves before they are allowed to become templates for future growth.
Societies that have lost this awareness tend to develop an unhealthy fear of failure and try to prevent failure on the part of their citizens rather than recognizing that allowing failure is how you keep a society strong. Choosing to protect the failures is essentially choosing short term good feelings over long term health.
In all cases (80/20 and 1/99), I would say there is no way to derive an error on the predictions, which make them useless. AT least this is my opinion. Any theory prediction must be accompanied by an error (connected to the assumptions, for instance), and to a way to correctly estimate the error (i.e. the confidence in the predictions). But that's probably my physicist education speaking ;)
And as said above, it is far from being general. All of this is at the end of the day problem dependent.
Yeap. Popper all the way. It needs to have falsification. I am with you. If I saw my article somewhere I would probably rip it apart. My observations are extremely general and take a considerable amount of time to be seen. I just think is better than the 80/20. it makes more sense.
On the picked time scale and the selected example, you are right. The 80/20 does not work everywhere, as the 99/1. At the end of the day, we are in business with empirical stuff that cannot probably be generalized easily.
yeap. I approached it more towards the subjects that it is impossible to gather empirical data.
Your rule seems to be logical at some points but it cannot be generalized for all the fields. We should not be worried about it so much.
I agree. Very rough.
thanx dear. Your articles light a spark inside me.
indeed.
Pretty interesting stuff. I use and talk about the 80/20 rule all the time. Like you said though, it is just a nifty guide kind of the like the 2% rule in real estate.
This is very interesting and will be interesting to see how it plays out further in the world of money - fiat, crytpo, etc.
yeap. I found out that the 1/99 applies more
Maybe it has been accurate for 99% of your life , but you only noticed its the last 10 years?
exactly.
About your scepticism with Pareto-like distributions, I recommend taking a look at this presentation about heavy tailed distributions in statistics. They happen a lot more often than thought and do obey some basic principles.
http://users.cms.caltech.edu/~adamw/papers/2013-SIGMETRICS-heavytails.pdf
I'll take a look
Distribution tails are always representing something special, different, out of ordinary. It could be something beautiful, or something disasterous.
I like it. It makes sense and you provided examples which demonstrate it's validity. To what degree is it relative? It feels more like an evolutionary hypothesis, speaking in terms of somewhat long time periods as in 85-100 years up to extreme amounts of time to which evolution chooses and changes in it's cycle of progression or balance. I don't think the 80/20 rule is canceled out by this but perhaps even complimented by it. Since the time is shorter more variables and possibilities are hashed out. More ideas and concepts get tested and fail to ensure and even endure the long term time span. Then, it's only -1% that survives this crash course of progression. In the interim, 20% survives as recipes for evolutionary progress. The other 80% of the experiments are failures necessary to discovering something right, true and progressive. 99% of our efforts; evolutionary as individuals and society, are focused to achieve -1% progress-- Or the probability we wish to see manifested in our perceptions of reality.
Yeap. You actually might be right. 80/20 might work short term and 1/99 long term. There is no way to falsify this though.
I have used the 80/20 rule for years. Am interested to try the new 1/99 one.
I am not sure you will find any applications though since it is very generic.
This 1/99 concept is more allied to the 'Bell Curve' principle rather than Pareto's, no? I would even take it further to 0.01/99.99
For example, that 0.01% are born at one end of the bell curve completely blind, and at the other end 0.01% are born with near perfect night vision. Everyone else falls somewhere in between these extremes of 'perfection/success' and perceived 'rejection/failure.'
Or else, one could apply Pareto's principle in steps. That 20% of crypto currencies will succeed in some measure, but only 20% of these will be profitable, and of these only 20% will be market leaders.
Interesting topic.
yeap. You could even assume that in some cases it might cancel the bell curve all together. e.g catastrophic events don't happen based on a bull curve.
Good article. I find your denotations confusing though. Does (-1)% mean just 1%, as in the parentheses are intended to express negative just like a minus sign? Or are you saying less than one percent and greater than ninety nine percent with this? The latter would make more sense to me.
yeap. minus 1% , 99% plus.
Thanks
Karl Popper and Thomas Kuhn ( both are philosophers, and Kuhn is also a scientist) would disagree with this article. They have challenged this kind of linear evolution of human knowledge model. In your words: -1% of philosophy made obsolete +99% of your thoughts. Plus anthropology and sociology have many common subjects, but some nuance differences, they may merge together but its not like anthropology made sociology obsolete. It cannot. Some people think that they can be combined into a new unified discipline. And nearly all the sociologists thought that religion will become obsolete in modern society, and today we see that they were wrong. It did not go away. Its not how things work.
I am actually a big fan of Popper and he would agree with my premise.
Not at all. All I am talking about are real world applications.
Sociology today is not considered science, hence the term "soft". Popper smashes "sciences" without falsifiability such as astronomy, sociology, psychology. Richard Feynman had the same view. We simply cannot know. They all sound made up. They make no predictions other than the ones they give to themselves. This is not science and hence why they are obsolete. It will become more evident in the future.
nothing ever goes completely away. not even alchemy. I made that pretty clear.
The people who don't consider sociology as a science, do think the same about anthropology. They mostly see as science just physics, biology and chemistry, and related fields. If based on methodology, sociology uses mathematical tools and it could be considered as more close to science than anthropology which basically only uses qualitative methods. Popper's "we cannot know" is a philosophical view, we cannot know anything for real. We cannot be sure about gravity, about energy, light, colors, anything. Even the sciences based on empirical data are not sufficient to claim that they are universal truths. So, basically, Popper smashes modernist view that there is a truth in science. Sociology is falsifiable. Everyday a lot of articles are written about false predictions, false research methods in psychology, sociology. It is just these are more complex than physics, because of the subject that is humans.
Sociology, psychology, economics are not falsifiable because precisely the subjects are unique humans that cannot be measured so generically.
Many experiments done from sociology and psychology render the entire field false. Example, once they tried to replicate an experiment. Everything was exactly the same but the tapestry of the wall. The results were completely different.
This is to demonstrate how fluid the human character is and how hard is to contact experiment. No replication = no science as far as I am concerned.
I've got a 50/50/50 rule for negotiating. Offer someone selling any item priced at $50 or less 50% of their asking price and 50% of all sellers will accept your offer. :-)
This is PhD thesis quality WOW :O , you have taught me something new thank you!
thank you