Our admirably good-hearted Iranian despot was anticipated in his observation by Vilfredo Pareto, who in 1906 noticed that about 20% of Italians held 80% of Ital

Our admirably good-hearted Iranian despot was anticipated in his observation by Vilfredo Pareto, who in 1906 noticed that about 20% of Italians held 80% of Italy's wealth. Similar proportions have since been noticed in many societies around the world throughout the past century, among them the United States today. (In 2007, the wealthiest 20% of Americans owned 84.6% of the nation's total wealth, as opposed to just financial wealth, says a UC-Santa Cruz sociologist. [1]) The phenomenon of 20% of a population accounting for 80% of a quantity is quite widespread, and not only in economics. For example, in classifying life-forms with binomial nomenclature, about 80% of all species are in "largest" 20% of genera; about 80% of the world's oil reserves are in the largest 20% of oil fields; about 80% of the grains of sand on a beach are in the lowest two deciles by size; etc. This feature is so common that it's called the "80-20 rule." [2] Though the mechanism behind this phenomenon remains in most cases a bit of a mystery, in statistical terms the 80-20 rule arises in populations described by a Pareto distribution. [3] The Pareto distribution belongs to the family of power-law distributions, whose functional forms have an in-built self-similarity; the 80-20 rule applies even to itself. So the wealthiest 4% (20% of 20%) of the population owns about 64% (80% of 80%) of America's wealth, and so on. 1. See esp. Table 1 at http://sociology.ucsc.edu/whorulesamerica/power/wealth.html http://sociology.ucsc.edu/whorulesamerica/power/wealth.html 2. http://en.wikipedia.org/wiki/Pareto_principle http://en.wikipedia.org/wiki/Pareto_principle 3. http://en.wikipedia.org/wiki/Pareto_distribution http://en.wikipedia.org/wiki/Pareto_distribution