by Gary North, Tea Party Economist:
Many people have heard about the 20-80 rule. This is Pareto’s famous law.
Vilfredo Pareto was an Italian economist teaching in Switzerland in the late 19th century. In what remains the most important economics book never translated English, published in 1897, Pareto observed that the distribution of wealth in every European country he examined revealed that approximately 20% of the population owned about 80% of the capital of the country.
This distribution, known as a power law, operates in many fields outside of income distribution and wealth distribution.
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