Pondering Pareto

understanding group population dynamics

March 28, 2018

Walt:

Probably the most common question we get is, "How many people are there at Windward?" I'm never quite sure how to respond, so if you'll bear with me, I'll try and unpack my thoughts and share my musings about the role that Pareto plays in community dynamics.

My first problem is that the question seems to presuppose that one person is pretty much the same as another, whereas my experience is that people are incredibly diverse and not interchangeable at all, at least not at the level at which meaningful relationships evolve.

I experience authentic community as a kaleidoscope of dynamic human potentials rather than as array of interchangeable widgets. So attempting to distill that interactive complexity down into a simple number feels wrong.

And yet, numbers are valuable ways to describe things, however truncated the resulting description may be. My favorite example of an absurd but true description would be way that the sound of a violin is what's created when you drag the tail of a horse across the guts of a sheep. When you get to truly know someone, my experience is that the labels commonly used to describe people seem to offer about that level of accuracy.

My experience is that Windward is at the center of a series of concentric communities ranging from barely involved to all in. Individuals regularly step from one circle to another according to the seasons of the year and the seasons of their lives. In part that's because we're committed to helping each of our members become financially independent, so there's a good deal of coming and going as economic opportunities unfold. For example, because our living costs are low, a person can work away from Windward for a few months, and then spend the rest of the year here pursuing their bliss.

Well, your patience was appreciated as I went on a mini-rant about the way the system tries to reduce people to interchangeable widgets, but that aside, there is merit to the question. Over the past year, there have been as many as nine people living on site, and as few as three. It was when I thought about those particular numbers, that Pareto came to mind.

Many years ago, economist Vilfredo Pareto observed that 80% of the land in his region of Italy was owned by 20% of the people. He looked around and found a similar ratio in a wide range of seemingly unrelated systems. Perhaps you've heard people say that in volunteer organizations, 80% of the work is done by 20% of the people. That's an echo of Pareto in action.

The principle shows up in so many seemingly disparate systems that people got to seriously investigating the concept. It seems to apply to completely unrelated situations such as the productivity of composers of classical music and the size distribution of stars in our galaxy.

In time, it became evident that the principle is more accurately stated as,"Half of an organization's productivity will be generated by the square root of the people involved." For example, in an organization with nine people, Pareto says that you'll find that three of them will be creating half of the value. It even seems to apply in the reverse, in that half of a vendor's customer complaints will come from the square root of how many customers it has.

Overlay that on community, and out of nine members, three of them will be creating half of the social stress. If Pareto is correct at the small community scale, then out of nine people, three will be creating half the productivity, three will be creating half the discord and the other three will be caught in between. Lose the discordant three, and the community can move ahead. Lose the productive three and the community can crash. And who could possibly be disinterested enough to decide which subgroup is which?

Natural systems are inherently fractal, so by the time an organization grows to where it's employing eighty people, nine of them will be generating half the revenue. And out of those nine, three of them will be generating half of that half.

The implications of this are staggering, especially for a small community that wants to grow large enough to achieve notable economies of scale. One implication is that increasing the number of participants renders the organization less sustainable when viewed on a per-person basis. Said another way, growth for growth's sake is counter-productive.

Another implication is that a community that is committed to egalitarian relationships is going to be stressed by the growing disparity in productivity between the various members. One way this express itself is with the members who are highly productive coming to feel that they're being exploited by the less productive members, at which point they're likely to withdraw from the community.

If your organization has eighty members, then Pareto posits that three of them will be responsible for a quarter of the productivity. If that's true, then the loss of those three members--a mere four percent of the membership--will have a huge and unpleasant impact on the organization.

Here's another way this principle can stress a community. Let's say that a conflict arises between a member who is busily installing a concrete foundation for the organization's latest building project, and an individual who wants to spend most of their time sitting at the picnic table drawing. Should the desires of each member carry the same weight?

Or perhaps it's a dietary issue: Suppose one person want's a meat-centric diet, and the other refuses to eat meat. Should the organization manifest the same commitment to accommodate each person without regard to how productive they are?

Groups that are organized along democratic principles have a hard time coping with Pareto. To take the above example, if you have nine people and three of them are producing half the work, they're going to be under a lot of pressure to slack off from the six people who are doing the other half of the work. A democratically oriented group is most likely going to cater to the wishes of the six at the expense of the three. If that is allowed to continue very long, it's likely to turn off and drive away the group's most productive members. Enough of that, and the group will fail.

It's my guess that this is one of the reasons why so many intentional communities fail. When the community's governance system fails to protect its most productive individuals, productivity crashes and the community dissolves.

Windward has undertaken to strike a balance between the needs of the more productive and the less productive members. One reason for that is the question of who defines productive? Another is that life is unpredictable and what works great today, may not work at all tomorrow. The development of new systems is both necessary, and resource consumptive in the short run, but it's vitally necessary in the long run--if the group's going to have a long run.

Also, life close to the land is risky, and anyone can become injured and need to convalesce, so over focusing on short term productivity can be detrimental on a variety of levels. On the other hand, it takes capital to create sustainable systems, and a community's only sustainable source for capital involves producing more than it consumes.

We try to balance authority with productivity by structuring our board of directors so that the seats go to the individuals who have put the most time and money into the community, but that power is balanced by each seat having only one vote. So while credits count, they only count up to the point where they warrant a seat on the board--beyond that, each director has no more authority than any other director.

Also a group of newer members can pool their credits and claim a seat on the board. Enough new members can outweigh the old members, so reaching out to new people who share one's vision is the best route to influencing the organization's future.

So, the upshot is that retaining the more constructive members is key; retaining those who just want to coast on by, not so much. Throughout Windward's history, we've had significant ups and downs in the number of people living on site, as people have a change of dream and head off to do other things, but still the ship sails steadily on as we work our way to windward.

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