Vilfredo Pareto’s Big Contribution

Economists have a different way of viewing the world.  Take the Italian economist, engineer and philosopher Vilfredo Pareto, who lived from 1848 to 1923.  Among his other accomplishments, he discovered what is known today as Pareto’s Principle, or Pareto’s Rule.  He realized that 20 percent of the people controlled 80 percent of the wealth in Italy, and that got him to thinking about relationships.  (Supposedly, this discovery was helped along when Pareto discovered 80 percent of his peas came from 20 percent of the plants in his garden.)

This 80-20 rule has since found a universal application.  It can usually be considered a management tool, as in about 80 percent of a company’s profits come from 20 percent of the time its employees spend at work, 80 percent of your problems come from 20 percent of your people, 80 percent of your warehouse space is taken up by 20 percent of your product, and so forth.

Others have tried to apply this very broadly, as in 20 percent of the police make 80 percent of the arrests, 20 percent of the soldiers do 80 percent of the fighting, and 20 percent of baseball players hit 80 percent of the home runs.

In any event, it’s another way of viewing the world.

There is a good article on Pareto’s Principle at


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