I came across some obituaries for Joseph Juran, who died recently at 103. Here are the first two paragraphs of the Guardian's obit:
Joseph Juran, who has died aged 103, will be remembered as the first management guru whose name is best associated with "quality". His distinctive contribution lay in expanding the statistical conception of quality so that it became an essential resource for management. He adapted the 19th-century statistical tool known as the Lorenz Curve to make it a manufacturing aid to identify clusters of defects in the production process. By integrating it with the 19th-century statistics-based Pareto's "80/20" Law, he eliminated random searching for the majority of defects, not only saving time but reducing waste.
The translation of Pareto's Law that he coined was that 80% of problems occur in only 20% of activities. This Juran/Pareto law of identifying the "vital few" (the 20%) has been applied to many functions of management since Juran gave it application: the most widely accepted formula it has generated is that 80% of results are the consequence of 20% of total activities (for example, a popular interpretation is that 80% of profits come from 20% of customers).
The Lorenz curve is a visual way to show the distribution of wealth, income, and many other things that are distributed across a population of some sort. (The Gini measure is a decimal measure that summarizes the area under the line of the Lorenz curve, compared with a 45 degree line from the origin, expressed to 3 decimals. A low Gini suggests relative equality among the members of the population; a high Gini -- 0.450 or higher -- indicates a high degree of inequality. The same Gini statistic can represent several different extremes in the shape of the Lorenz curve. I once toyed with the idea of using "Gini Lorenz" as a userid for posting comments! I digress.)
Another obituary included this paragraph:
In 1937, Dr. Juran coined the Pareto Principle, which millions of managers rely on to help separate the "vital few" from the "useful many" in their activities. He also wrote the first standard reference work on quality management, the Quality Control Handbook, first published in 1951 and now moving into its sixth edition.
The LA Times obit included this:
His Pareto Principle was named after Vilfredo Pareto, an Italian economist who in the 19th and early 20th centuries wrote about the unequal distribution of wealth.
Juran extended this theory to describe "the phenomenon that in any population which contributes to a common effect, a relative few of the contributors account for the bulk of the effect."
More simply, this referred to the "vital few" as opposed to the "trivial many."
This was Juran's way of focusing attention on what was important and not getting lost in what wasn't.
It seems to me that the way our economy is organized right now, this rule is being treated as if it applied to human beings -- that those who make out well under our existing system must by definition be the "vital few," and the rest of us must be mrely the "useful many" -- or the "trivial many." (Let me be clear here: I'm not blaming Dr. Juran in any way for any of this! I'm simply exploring the leaps that some might take from his ideas to some erroneous conclusions.)
I regard this as a bastardization that is simply unacceptable, within the context of a country which loudly proclaims itself to be dedicated to the self-evident proposition that all of us -- all men, as it was styled at one time, now acknowledged to be a much larger "us" that includes not only white men but also black men and also women and also people from all places on the globe -- are created equal.
Every one of us contributes, by our very presence, to the creation of economic rent. But a relative few of us get to collect the lion's share of that rent -- privatize it -- as if they had somehow created it, while the rest of us are paying twice -- paying both the economic rent to the landlord-types (that is, landlords, people selling homes, and the mortgage lenders who lend us money to pay them off and then collect interest from us for decades), and taxes to support the government services which next year will permit the landlords to charge more to their tenants! (The alternative, of course, is for our government to collect that rent from the landlords, and stop collecting other taxes, such as those on sales and wages, from all of us.)
And somehow, it seems as if the existence of an 80/20 rule is used as justification for our perverse wealth and income distributions, as if they were simply in the nature of things.* Well, chattel slavery was once considered to be "just in the nature of things." And now it no longer exists in America.
* Do you know the hymn "All Things Bright and Beautiful"? You may not know the 2nd verse; it isn't sung in most churches any more -- politically incorrect! -- but I found it in a children's book and then many other places online:
The rich man in his castle,
The poor man at his gate,
He made them, high or lowly,
And ordered their estate.
The landed gentry, the receivers of the rent from their tenants, who -- like all the rest of us -- can't survive without access to land, somehow become "God's eldest sons" -- entitled to collect the rent, and keep it as their own treasure. I digress -- but not all that far!
I suspect we'd find that if even a few percent of the "trivial many" suddenly disappeared, the lives and situations of all of us would be seriously effected in ways that few of us have given much thought to or could fathom. (And I stand in awe of what the effects could be if we revised things to put more wealth and more income in the hands of those who currently lack them.
Should 20% of us get 80% of the goodies? Here is the distribution of Net Worth as of 2004, taken from Currents and Undercurrents: Changes in the Distribution of Wealth, 1989–2004, by Arthur Kennickell:
Quantile Holdings Cumulative Holdings
Top 1% 33.38% 33.38%
Next 4% 24.13% 57.51%
Next 5% 11.99% 69.50%
Next 40% 27.95% 97.45%
Other 50% 2.54% 100.00%
see tables at http://www.wealthandwant.com/issues/wealth/50-40-5-4-1.htm
"Net Worth" is defined as total assets minus total debt.
10% of us had almost 70% of the Net Worth!. Think of that! Consider the implications of that. Don't just say "okay, that's the way it is."
Do we take this to be the result somehow of the workings of a natural law -- something like the law of gravity -- or the operation of a perverse setup that steals from some to enrich others?
This blog site is intended to provide some pointers to understanding the perverse setup that enriches just a few of us, and treats the rest of us as afterthoughts -- the "trivial many." It is not natural law. It is a manmade structure that produces this. And that manmade structure can be corrected rather simply and gracefully, restoring to the vast majority of us something that has been stolen from us.
None of us are trivial.