There is a certain odd distribution that recurs in economics known as Pareto’s Law. It was first discovered by its namesake Vilfredo Pareto in an investigation into the distribution of land ownership on the Italian peninsula in the early 20th century. As it turned out, only 20 percent of Italians owned about 80 percent of the land, the other 80 percent of the population owning only 20 percent. Pareto thought this to be a rather skewed ratio, but inquiry into the matter revealed that this same approximate ratio prevailed in many different countries.

In fact, later investigators found the ratio turning up in all sorts of places. Generally speaking, in almost all societies of any economic structure whatever, 20 percent of the population will be found to own 80 percent of the wealth, with the other 80 percent owning only 20 percent. And, surprisingly, when the ratio is found to be skewed, it tends to favor the minority rather than the majority. Various equalitarian schemes seem to have little influence on the apparently ironclad ‘80-20’ rule, except to increase or decrease the overall quantity of wealth.

Another interesting quirk of the ‘law’ is that it has a sort of fractal, repeating quality to it. Looking within the 20 percenters, there will often be about 20 percent of the 20 percent (4 percent) that owns about 80 percent of 80 percent (64 percent) of the wealth. Thus 80-20 repeated gives 4-64, 1-51 and so on.

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