What is The Pareto Optimality’s Efficiency Concept?

                           

Pareto efficiency, or Pareto optimality, is a concept in economics. Named after Vilfredo Pareto, the term is used in engineering, game theory, and social sciences.

                           

Pareto used his theory in studies of economic efficiency and income distribution. He claimed that a change from one allocation to another could make one individual better off, without making another worse off. This is referred to as a Pareto improvement. The allocation is called Pareto efficient or Pareto optimal.

                           

The 80/20 Efficiency concept, so often used in management, is his reasoning. For example, 20% of your sales foe may contribute 80% of your sales.

                           

I bring it up because those on the political left would do well to reconsider some of their anti-business tirades when trying to create jobs, contemplating the Pareto principles.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)