The Weird Thing About Price's Law | Jordan B Peterson

prices law hears prices law this is something to hammer into your heart the square root of the number of people in a domain do 50% of the work okay so let's let's go through that you have ten employees three of them do half the work makes sense that's reasonable you have a hundred employees ten of them do half the work that's problem so the other ninety percent are doing the other half who cares about them you have ten thousand employees a hundred of them do half the work right so here's that here's a nasty little law as your company grows incompetence grows in it exponentially and competence grows linearly got it right because it with ten it's three who are doing half the work but at ten thousand it's a hundred that are doing half the work so nine thousand nine hundred of your employees are doing as much as the best 100 you might not even know who the best 100 are but probably they know and maybe their peers know too and so one of the things that's really interesting when big companies start to shake which means maybe they've had a bad quarter too bad quarters and the start price starts to tip down and the people the hot people who have options are not very happy about that and maybe they start to announce layoffs all the hundred people who have opportunities leave and they're the ones who were doing half the work so boy that puts your company in a pretty rough situation because now you've got the ninety nine hundred people left over who we're only doing half the work and the next time you announced layoffs the next most productive hundred leave and so then you're left with nobody who's productive at a massive overhead payroll prices law you can look that up to soul a price to soul a price is a guy who was looking at scientific productivity and one of the things he found was when he was looking at PhD students is that the median number of publications for a PhD graduate when he did his work which was in the early 60s was one okay half as many had - half as many as that had three half as many as that had four it's a real step down and one of the corollaries of that is that there's a certain number of people who are hyper productive and that's these people out here and if you were graphing the distribution let's say you graphed how many people in that population of 300 had $10,000 in a savings account it would look very much like this some of them would have are some of them some of them would most people would have like no savings whatsoever the median person would have no savings whatsoever and then you go up here where the 1% is they have all the money but the thing you want to understand about that 1% issue that you always hear about is that it applies in every single realm where there's difference in creative production every realm doesn't matter number of Records produce number of records sold number of compositions written so here's here's an example 5 composers produce the music that occupies 50% of the classical repertoire right Bach Beethoven Brahms Tchaikovsky who's Mozart that's right those 5 ok so here's something cool so you take all the music those people wrote 5% of the music all those people wrote occupies 50% of the music that of their writing that's played so not only do almost all the composers never get a listen but even among the composers who do get a listen almost none of their music ever gets played so so then that's a that's another example of this prices loss scaling so in it applies to all sorts of things like number of hockey goals scored is also distributed this way number of basketball basketball basketball successfully put through the hoop follows the same distribution size of cities follows the same distribution it's a weird it's a weird law and you you can think about it in part why does this happen well imagine what happens when you play Monopoly what happens everybody has the same amount of money to begin with right so then you start playing it's basically a random game well some people start to win a bit and some people start to lose a bit and then if you win the hut probability that you'll keep winning starts to increase and if you lose your vulnerability increases as you lose and then maybe you've got to say six people playing Monopoly soon one person has zero what happens when they have zero they're out of the game so zero is a weird number because when you hit zero you're out of the game so so then if you keep playing people start to stack up at zero right what happens at the end of the game one person has all the property and all the money and everyone else has none right that's what happens if you play an iterated trading game to its final conclusion and that's part of the the law in a sense that's underlying this kind of distribution so it's it's really it's it's it's not a consequence necessarily of structural inequality it's built into the system at a deeper level than that so you know people talk about all the time about how unfair it is that 1% of the population has the vast amount of the money and 1% of the 1% has most of that money and 1% of the 1% of the 1% has most of that money but it is a it's a it's an inevitable conclusion of iterated trading games and we don't know how to fight it we don't know how to take from the people who have and move it to the bottom without it instantly moving back up to the top different people maybe but still back up to the top because even the 1% churns a lot like I think you have a 10% chance if I remember correctly you have a 10% chance of being in the top 1% for at least one year of your life and a 40% chance of being in the top 10% for at least one year in your life that's in Canada and the u.s. it's less so in Europe so there's a fair bit of churning at the top end it's not the same people all the time who have the money but it is a tiny fraction of the people all the time who have all the money

Channel: Jordan B Peterson Clips

Views: 44,591

Keywords: psychology, philosophy, Jordan B. Peterson, Jordan Peterson, JB Peterson, jordanbpeterson, jordanpeterson, personality, understandmyself, selfauthoring, neuropsychology

Id: 8z3OZ7QuJE0

Length: 5min 46sec (346 seconds)

Published: Sat Feb 15 2020