Here Comes Everybody – The Power of The Power Law

One in a series of posts on Here Comes Everybody: The Power Of Organizing Without Organizations.

credit: Wikipedia “power law” entry

Mathematically, according to Wikipedia, a power law is when “the frequency of an event varies as a power of some attribute of that event”.  The simple graph to the left is a power law graph.  The power law is what underlies the “80-20” rule, also know as the Pareto principle (named for Italian economist Vilfredo Pareto who observed over 100 years ago that 80% of the land in Italy was owned by 20% of the population).

It’s a commonplace in the business world that 80% of sales come from 20% of a firm’s clients.  Non-profit organizations often find that about 80% of their total contributions come from 20% of their contributors.  Churches and other voluntary associations regularly estimate that 20% of their participants do 80% of the work of the institution.

So why is Clay Shirky writing about the power law in Here Comes Everybody: The Power of Organizing Without Organizations?

Well, among other things, because it explains why Wikipedia is still around and Encarta, despite being a pet project of Microsoft founder Bill Gates, is not.

Look first at the left-hand side of the graph, the part that’s colored in green.  That’s the 20% of the graph (on the x-axis) that produces 80% of the results (on the y-axis).  The landowners who own most of the land, the clients that buy most of a company’s product, the top donors to a college, symphony or food pantry, the most active volunteers and leaders who keep the parish (or garden club, or soccer league) going.

And if you’re a corporation, that’s who you’re looking to hire—top producers.  In fact, that’s all you can afford to hire because…well, because you’re hiring them; and paying a wage or salary, paying benefits, providing office space, supervisors, etc., costs a lot of money.  The advantage of hiring people is that employees can be forced to work (at least up to 40 hours a week) on a project (like Encarta) by their employer, and thus be very productive.

Shirky argues that what he calls “the new social tools” now make it possible to engage the other 80% (the right side of the graph, in yellow), and that became Wikipedia’s decisive advantage.  In the aggregate, it meant that the rare (most contributors to Wikipedia make only one entry) or occasional (most of the rest of Wikipedia’s contributors make just a handful of entries) contributors could, in fact, make a contribution—a contribution they would never make to Encarta because Microsoft couldn’t afford to hire people who would do so little work.

The result is that Wikipedia was able to generate more content, update entries more quickly, and correct errors more efficiently than Microsoft ever could.  Whereas the age of the printing press developed the corporation as the most efficient means of production for vast arenas of human endeavor, the new social tools are changing the rules of the game—in ways we don’t (and can’t) fully comprehend.

Today the best way to produce an encyclopedia is to create a website and a set of interactive tools and rules for millions of voluntary contributors/users—as opposed to creating a corporation with thousands of employees (researchers, writers, fact-checkers, editors, secretaries, janitors, printers, marketers, etc.).  That’s just one example of the revolutionary potential of the power law when combined with the new social tools.