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.
