Jordan Peterson explains The 80-20 Rule (Pareto Principle)

Jordan B Peterson is a Canadian clinical psychologist, cultural critic, and professor of psychology at the University of Toronto.

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[angeloconstantino]

(pt 2) Only the the most financially successful, i.e., those who have demonstrated exceptional skill at profiting financially can be included in his curve. So perhaps the most esteemed talents in our society; that is, the talents of scientists, artists, writers, philosophers, politicians, technicians) are excluded--no Einstein, or Newton, or Da Vinci, only the Koch Brothers, the Rockefellers and the Trumps. All fine people no doubt

[angeloconstantino]

(pt 3) There are many criticisms that can be leveled against the use of the a so-called Pareto Principle used in this way, but the most serious is that it is moral blasphemy to judge human beings on utilitarian grounds. Their worth as a form of social productivity—this is paving the way to the gas chambers. Naively, he is, in effect, laying the groundwork for a form of reactionary barbarism.

[RobinEvans]

Once again Jordan makes assertions that are not true, and once again a citation is needed. I swear, anti-socialist propaganda is completely reliant on feels over reals.

Pareto distribution is empirically observed in capitalist society and explained easily enough. Socialist states with planned economies such as the Soviet Union had very low levels of income inequality. “Wealth” inequality in the form of ownership of capital assets and financial instruments (stocks, equity, etc.) was non-existent because wealth was owned by the state and all property income was remitted to the state.

Pareto distributions in capitalist society result from earnings that come from capital, rather than the selling of labor or from petty trading.

Those with better mines and agricultural lands will earn higher profit rates, which is known as excess rent. Then you get a renter class and firms that are able to undercut competition using price cutting practices to gain market share, and use economy of scope and scale for cost cutting. Then they can acquire the second best grade mines and land, and then the third best, etc. Then capital will move across industries.

This is how real competition works, rather than the idealist fairy tales we are taught like perfect competition, with the blaming of every thing bad about capitalism on the inverse fairy tale, imperfect competition.

Before the Pareto power-law creates the super-rich exploiting class, you already got the inequality generated simply from the random process of market transactions with the buying and selling of labor; a Boltzmann distribution.