The Mathematical Impossibility of Equality
People have asked my why Communism fails in reality when it sounds so good on paper. The most brilliant answer I just recently learned, and it works in complete harmony with another idea I’ve known for a while. Two different smart dudes, same general principle, sorta. It’s math.
Jordan Peterson & Pareto Law
What state socialism and what Marx himself did not recognize was the Pareto Law. The Pareto Law works in capitalism in a way that everybody understands. When you have a lot of money, it ends up accumulating in the hands of a few people. When you have a lot of power and influence, it ends up accumulating in the hands of a few people. Famous people who were famous when you were born, are STILL famous now. Marx rightly understand that criticism of capitalism, but didn’t understand how many systems it applied to. It applies to socialism and communism as well. It’s universal. When people say that the Soviets just made mistakes and that a few in the party got too much power, they are wrong. It’s how power works, among other systems that obey Pareto Law.
Pareto Law works like this: if you take 1000 composers over time, about 32 of those composers will get 50% of the attention. If you have 10,000 rock songs, about 100 of them will get 50% of the airplay.
Nassim Taleb & Extremistan
Taleb describes human variability in terms of Medocristan and Extremistan.
If you describe certain variabilities like height, you will get a very reasonable bell curve distribution. The range of that distribution will be within the same order of magnitude. This is Mediocristan. Height, weight, IQ, golf scores: these are typical human attributes that live in Mediocristan. You can expect someone to be 6 feet tall. If you have a football stadium full of people and take a representative sampling you might get a few adults somewhere around 4 and a half feet on the short side and a few somewhere around 7 feet on the tall side. But you would never get anybody ten times taller than 7 feet or ten times shorter than 4.5 feet. That’s Mediocristan.
Now change that to hits on their YouTube channel. Now you’re in Extremistan. You might find somebody with 1000 views per year, 100,000 views per year or even 10 million views per year. Many orders of magnitude different. When people think of income inequality, they think income should be one of those things bounded by small multiples, not several orders of magnitude. But income, like fame, works in the domain of numbers called Exteremistan.
So economies and matters of wealth and power are systems that:
- Belong in the realm of Extremistan
- Operate under Pareto Law
Both capitalism and communism have these bounds. The difference is that in socialism and communism the power and the money all accrues to the (single) political party in control of the government. Under capitalism, power accrues to the government and money to the capitalists. So it has that particular benefit over communism and socialism that it is less likely to be authoritarian.
So under state socialism or communism, the state will get all of the power and the money, and certain members of the party will get the lion’s share of that. When they say for you to sacrifice your ‘surplus’ wheat or coal or whatever it is you produce, you have no choice. You will produce your quota and you will get the price they dictate. Extra-productive people (who have skills in Extremistan) will be forced to give up more because they will be compared to people with average skills.
Look what happened to the Kulak farmers in the Soviet Union. They were murdered because of their skill in farming — they made everybody else look bad. Why? Because crop yields are in Extremistan. You either grow 20,000 pounds of corn per acre like a good farmer or you grow zero, like a bonehead like me. So when the state says “Every farmer will produce an average of 10,000 bushels of wheat and be paid 1.99 per year per bushel”. What do you think happened? I tell you what happened, the excellent farmers where shot for acting like “capitalists,” and the newb farmers were shot for not fulfilling their patriotic quota.
A market mechanism sounds like the obvious answer. It is. But socialist states refuse market mechanisms because they apply ‘equality’ on first principles. This ‘equality’ is mathematically impossible.
