Friday, August 12, 2011

Inequality

I must say the Pareto principle was not originally designed for the audit of our endoscopists' workload.

The first observation was, in fact, related to population and wealth: Pareto found that 80% of Italy's land was owned by 20% of the population. (Rumors say that he derived his idea and started the survey after noting that 20% of the pea pods in his garden contained 80% of the peas.)

And the rule still holds nowadays. For example, in 1992, as reported by the United Nation, the richest 20% of the world's population control around 20% of the world's income.

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So, are we coming to the conclusion that the distribution of wealth is what we expect?

I would be cautious. In the past 20 years, the inequality in economy has actually increased markedly. Specifically, income growth is largely confined to those with the education and skills required to take advantage of new technology and globalisation (for example, those who could afford as well as understand Thomas Friedman's books). The benefits of economic growth during this period of technological bloom have largely been taken up by the top 1%, rather than 20%.

As stated in the Bible: For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away. (Matthew 25:29)

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