Effort and Productivity: Pareto and Price

pareto and price

Effort and Productivity: Pareto and Price

There’s a Disparity That Is Not Talked About Enough

Something has been on my mind for a long time now. This something is the reality that is reflected in one principle and one law. One is a sociological principle contrived by an Italian polymath named Vilfredo Pareto called the Pareto Distribution. The other is a law that governs productivity in any creatively-productive domain. This law was furnished by a British scientist and historian named Derek de Solla Price. His law is called Price’s Law.

I will return to this principle and law shortly, as I will define, contextualize, explain, and relate them. First, I want to tell you how I’ve been recently affected by them.

Most recently, I was forced into a group for a project for one of my university classes. I typically enjoy group projects, but I was with two people with whom I’ve never worked. I didn’t mind this, but by the day the project was due, I had done at least 50% of the work. All three of us were supposed to present in front of the class for a total of approximately eighteen minutes (at six minutes per person). From the beginning to the end of the presentation was just under fifteen minutes. I spoke for more than six of them.

This experience underscored something that I’ve observed since I began college (and now university) in 2024: most people don’t try. The majority of people in my classes show up when they feel like it and do whatever work they care to do. The work they do is typically lazy and weak. I believe that there are multiple factors that play into this problem, but I don’t believe it’s localized to my classes or school. 

Recently I was talking to a classmate who was discussing one of his classes for next semester. He was researching his Spanish professor on RateMyProfessor and was discouraged that people reported that attendance was mandatory to be successful in her class. I was shocked. Simply showing up is the bare minimum requirement, and people are complaining that they have to actually attend classes?! It still makes me a little sick how lazy some of my fellow students are, especially considering that many are on grants which are subsidized by tax dollars. I’m all for tax money going to education, but too many people have zero appreciation for the opportunities which they’ve been given.

The main point that I’m trying to illustrate is that many people, even in university, barely try. I want to understand it. I get that my cohorts are undergraduates and that some of them don’t know what future they want to pursue. Also, people have different life situations. I understand if someone has to miss a few classes in order to make time for something more important, but that’s typically not what’s happening in my classes.

Before I discuss my thoughts and how the principle and law relate to the (lack of) productivity of some of my classmates, I want to also discuss work.

I have noticed that many of my past and present coworkers loaf when they can get away with it. Social loafing is a documented occurrence, so it’s not shocking that I’ve observed it in the “real world.” If I had never heard of Price’s law and someone explained it to me, I would immediately say, “Yes! That’s my experience! I’m the square root.”

Here’s Price’s law (paraphrased in quintessential Brian fashion):

  • Price initially observed that in his domain of scientific publication a small minority contributed to the majority—or at least half—of all the publications.
  • From this observation, Price uncovered a crucial reality regarding production, and thus came up with his “law.”
  • The law is that the square root of the people in a given productive domain/enterprise contribute to (at least) HALF of the output.

Do you have ten employees? The chances are that three of them are doing half the work. [√ 10 = 3.16.]

A hundred employees? Well, ten of them are probably doing half the work. [√ 100 = 10.]

A million employees? You might as well fire 999,000 of them and hire another thousand productive workers, because the remaining thousand are already doing half of the work. [√ 1,000,000 = 1,000.]

This explains why so many huge companies are so inefficient and unproductive. There are plenty of economic theories and principles that also explain facets of this, such as economy and diseconomy of scale. Another thing this illuminates is that the majority of workers are far less productive than they should be—a lot of them even bring negative returns (yet, they’re still being paid). In contrast, that square root of hyper-productive people is your greatest asset. They’re the people who are typically overburdened with work. I’m sure I don’t have to explain why.

For those hyper-productive people, it is an immense stress and burden. Most of the time, these people have problems setting boundaries and saying “no.” Also, these people are very often taken advantage of, not properly recognized, and are not adequately compensated for doing far more work than is required of them (not to mention far more work than most everyone else).

If you’re one of these people, a vital step is recognizing this reality. Once you understand your worth, you are immensely powerful and now have leverage like you wouldn’t believe.

Let’s make a few things clear.

  1. This is not restricted to only business and work. Price’s law extends to most or all productive domains. I urge you to test it yourself and do your own research.
  2. I am not telling you to put your job on the line and give your employer an ultimatum. I’m not offering advice of any kind.
  3. Despite its name, Price’s law is NOT a natural law. It’s not an exact science, nor is it always the case. However, it does appear to be a useful concept that can be observed in the real world.

Here’s a good short reading on Price’s law: https://dariusforoux.com/prices-law/

Here’s a good discussion on Price’s law: https://www.reddit.com/r/todayilearned/comments/cid1yg/til_about_prices_law_in_any_productive_population/

Here’s a video that provides context and examines theoretical and real implications (the video is really about Price’s law rather than Pareto [misnomer]): https://youtu.be/thgHSF13Sug

Here’s a good short reading on Price’s law that also brings up my next topic—the Pareto Distribution: https://mondaymornings.madisoncres.com/productivity-and-prices-law-1/

I’ve found it somewhat difficult to differentiate between Price’s law and the Pareto Distribution: They make similar claims but with different proportions. From my research I have come to learn that the difference is primarily in application. Price’s law deals mostly with production in creative/business domains from people, specifically, whereas the Pareto Distribution is more of a sociological concept that observes the natural tendencies of nature and people. 

Pareto’s Distribution posits that there is a natural tendency for 20% of things/people to produce/own/cause 80% of the things in a given domain. 

This brief video explains it very succinctly: https://www.youtube.com/watch?v=lsGwqk_agcQ

These are two concepts that are somewhat easy to understand but generate many questions about people, productivity, inequality, and several other important facets of life. I’ve found that much of life is governed by these weird principles, distributions, and concepts that we don’t much understand but nevertheless have a tight grip on most of our experiences. The more of them we understand, the more wise, knowledgeable, and free we are.

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