The Pareto Principle Is Flawed

By Jamie McSloy / May 27, 2018
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The Pareto Principle Is Flawed

Dear Diary,

It’s Day 4 of heavily restricting my internet time. I’ve decided to spend five minutes maximum on Twitter per day for the next month. So yesterday I wrote a throwaway tweet to satisfy my hungry readership:

Pareto Principle is flawed because it’s very easy to say 20% of the work gets 80% of the results, but until you’ve done 100% of the work you can’t determine that. Better frameworks exist.

Sometimes these tweets take off and for the life of me, I’ve no idea why.

But a lot of people found this tweet either useful or damning, and so it picked up steam. And some of the replies convinced me I never want to be a Twitter celebrity.

Jesus Christ.

Write a popular tweet and you get insulted, psychoanalysed and people writing gibberish in all directions.

(Time Out: If you’re enjoying this article, then you should probably sign up to my mailing list, where I give out ideas and business tricks that I don’t share publicly. Click here, fill out your details and get yourself on the list! You won’t leave this page.

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Anyway, let’s talk about this more contentious than I thought topic a little.

First… What Was I Talking About?

There seemed to be some disagreement about what I was talking about, with people mentioning heuristics, natural laws, tree height distribution and my act of justifying my own self-defeatism.

Ok.

I was actually just poking fun at self-improvement dorks who read Tim Ferriss and think they’re going to skip working hard and “out-efficient” their competition. This is a recurring theme in a lot of my tweets and blog posts because that idea is wrong and I find it funny.

Or it might be that I’m internalising my own self-defeatism, I guess. But with the above frame, I then went on to write a second tweet:

Read the intro to a frequency dictionary earlier and it went into the methodology. (I know, exciting stuff.) Gave me a superior framework to Pareto Principle:

– Frequency

– Function

i.e. learn that which is repeated most in regular usage AND the core that governs those items.

The problem with how a lot of guys approach the Pareto Principle is in this: They assume that there’s a magical 20% (or 10%, 5% or whatever it is they feel like) that’ll allow them to “skip the queue” so far as work is concerned.

But they don’t know what the 20% is until they’ve done 100% of the work, because how would you?

In the follow up tweet, I expanded on this. The Pareto framework doesn’t accurately describe what the 20% you should learn is.

But surprise, surprise, if you read actual books as opposed to self-help ones, in a lot of cases there are methodologies which allow you to learn for maximum effectiveness.

E.g. in language learning, you can learn based on frequency and core functional vocabulary.

This is smarter than “20% of the words are used 80% of the time, duuuude.”

Secondly… The 80/20 Principle Is For Idiots

Now, some of you might have read the above section and thought, “Oh, ok… this random Twitter guy is just talking about a specific thing that has nothing to do with the 80/20 rule. No problem.”

Let’s clear that up then.

The 80/20 principle is pseudoscientific pareidolia.

It appears where people want it to appear and where they skew the data to fit it. Two tweets I got last night:

“It’s a heuristic, not a natural law my dude”

And…

“There is no flaw. The Pareto principle accurately describes not only work, but money flow, population in cities, tree height in forests, and star mass in galaxies. It’s been determined to be statistically accurate over multiple mediums.”

Ok. So it’s a tool for better self-determination after the fact according to guy one and according to guy two it’s a natural law that governs everything ala The Force in Star Wars.

If it’s a heuristic, then it’s flawed because it works as a diagnostic tool only after the fact.

It’s not a natural law at all.

The closest I could find to this was the idea of Pareto analysis – named after Pareto, an Italian economist who noticed that 80% of the wealth was controlled by 20% of the population.

The interesting thing being there that a) that observation isn’t scientific (i.e. define wealth, define poverty and define population) and b) the ratio changes over time.

Do 20% of Italians hold 80% of Italy’s wealth today? No. So ultimately, the observation – whilst true at the time – only held in a certain situation. If you look at the scientific work into Pareto distributions, there are tons of caveats that state Pareto Distributions only work for a specific set of criteria.

In other words not as a universal principle by any stretch. It’s Pareidolia: It fits where people want it to fit within a very constrained framework of possibilities.

And it’s straight up not useful for anything approaching practical advice.

Final Thoughts

Essentially, with the 80/20 principle you’ve got:

  • Something that can’t be defined until after the fact
  • A “rule of thumb” approach that doesn’t explain anything in any sort of detail
  • A cute marketing slogan

Now, there are more mathematically valid arguments, but they have nothing in common with what people usually talk about when referring to the Pareto Principle.

The author of the 80/20 Principle replied to my tweet:

Work and life can learn from experience.  We don’t need to keep repeating unproductive actions.  If 80% of our time produces less than 20% of the results we want, we can stop doing those things.

And that’s ok. But that’s not any sort of scientific statement and doesn’t imply it’s a universal rule like some of the weaker responses did.

(Interestingly, the weaker the response, the more aggressive about it the responder seemed to be.)

And if said author thinks the Pareto Principle is good at determining unproductive actions from productive ones, then fair enough. I’m not his mum.

But it’s an inefficient rule to use to find the best course of action and a poor way of filtering for unproductive action, which was my original point.


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