
The Access Economy: Why the Normal Distribution Is Vanishing (2015) - ranvir
https://alexdanco.com/2015/12/17/taylor-swift-ios-and-the-access-economy-why-the-normal-distribution-is-vanishing/
======
pjc50
Tournament wages theory:
[https://en.wikipedia.org/wiki/Tournament_theory](https://en.wikipedia.org/wiki/Tournament_theory)

This seems to happen whenever there's (a) direct competition (b) the value
provided by the winner is very scalable (media, sports, software) and (c) most
importantly, it can't be substituted by splitting the job among more people.

So footballers follow this model because you can only have 11 people on the
pitch - there's no amount of low-wage non-first-worlders you can replace
Ronaldo with. Megastars follow this model; if you want to see Taylor Swift,
that doesn't substitute cleanly with Ariana Grande or your local bar band.

And software engineers follow this to some extent because splitting problems
up is in itself the difficult bit.

~~~
onlyrealcuzzo
Software engineers follow for the same reason as footballers or doctors.

In football, there's only a market for the best. Nobody likes a loser.

It's the same in health. There's no market for mediocre or bad doctors.

Similarly, there's not really a market for software that doesn't work. Writing
novel software that solves real problems isn't yet trivial. So there's not a
huge market for bad software engineers. And there isn't yet a big enough
supply of good ones to meet demand.

See why Google doesn't just lower their bar to hire more candidates. It
wouldn't do them any good.

~~~
pjc50
Few markets have a market for "bad" employees, surely? What matters in the
tournament situation is that the number #2 employee isn't as good as the #1
employee, regardless of what absolute quality level we're talking about.

~~~
scarejunba
There are things with low differentiation. Average day care is fine. Average
janitorial services are okay. Average checkout operator is okay.

No one needs the exceptional janitor.

Fwiw though, I think there's lots of room for the mediocre software engineer.
Enough work requires little to no skill. I've done some of it myself b

~~~
throwawayjava
_> Fwiw though, I think there's lots of room for the mediocre software
engineer. Enough work requires little to no skill. I've done some of it myself
b_

Unlike janitors or checkout operators, software work can be outsourced.
Outsourcing doesn't make sense for high-skill software engineering for two
reasons. First, actually writing the code is only a small part of the job. And
second, even when it comes to writing the code, there's still a real quality
difference between top US candidates and top international candidates [1].

But software work that requires "little to no skill" is exactly the sort of
thing you can successfully outsource.

[1] [https://arstechnica.com/science/2019/03/us-computer-
science-...](https://arstechnica.com/science/2019/03/us-computer-science-
grads-outperforming-those-in-other-key-nations/)

------
JackFr
This is pretty muddled thinking. He talks about categorical variables and then
points out that they are not normally distributed. Which doesn’t make sense.
(It almost could, but he skips an important step.)

Apart from that it's mostly handwaving and opinion with no actual data. When
you don't use data it's unsurprising that your personal experience matches
your hypothesis.

~~~
ErikVandeWater
Yes, he just chose a satisfactory cutoff for whatever counts as a "true"
flagship. Some people would say only this generation iPhone. Some would say
only this generation iPhone + Pixel + Galaxy. Some would say this generation,
and the previous generation of iPhone + Pixel + Galaxy.

And even then, we're ignoring features like internal storage capacity for each
phone.

Even if you are making $10 million a year, you split that between your yacht,
your car, your mansion, and jewelry for the wifey.

You aren't going to have the biggest mega-yacht and no jewelry for the wifey,
so there will be a tapering at the higher end of the demand curve for yachts
for people making $10 million a year.

------
coldtea
> _We can see, too, that these bifurcations are driven by a shift from a world
> of scarcity to a world of abundance._

To me all these bifurcations seem to me to stem from a change of a world of
more evenly distributed wealth (for working, lower middle, and middle class)
and one with wild inequality.

It's a world where a 10-20% can afford the "whatever" (e.g. best phone, live
in NY/Bay area, university degree, etc) and the rest have to scrap by and
increasingly pinch pennies (while still doing some desperate wealth-signalling
purchases, like poor urban blacks that buy $200 sneakers to feel like they
have something nice and can participate in the kind of society they see in
ads).

Back in the 50s and up to the 80s a signle-income middle class household could
still send a kid to college, buy a house, and so on. And living in NY or the
Bay are was still very affordable (to the point that both areas had large
artistic / bohemian communities living there, and not of the latte sipping
urban wealth variety, but the penny pinching / stick it to the man / junky
variety).

~~~
Jonanin
500 years ago, only 1-2% could afford "whatever" and the rest had to scrap by
and pinch pennies. I'm not sure we're moving to a world of less evenly
distributed wealth.

~~~
NeedMoreTea
Now compare 60 years ago with now.

~~~
Godel_unicode
Statins, anti-retrovirals, common availability of antibiotics, treatment for
TB, vaccines for many population-decimating (in the traditional sense of the
word) viruses.

Everyone has a super computer in their pocket, the vast majority of human
knowledge is available in your hand for free all the time, you can video chat
anyone you want anywhere in the world in HD for free, world-leading educators
post hundreds of hours of video lectures online for free. You can get O(every
song ever recorded) instantly anywhere you are for $10-$15/month.

In my opinion, what we're seeing is that things split into two categories:
generally free or almost free, and expensive enough to be out of reach of most
people. The thing that is really exciting is that things are moving from the
latter to the former very quickly. The problem specifically with education is
that expectations (everyone must have a degree!) Hasn't kept up with reality
(degrees are no longer the only/best marker of skill!).

~~~
NeedMoreTea
Things are also moving the other way at unprecedented speed - the expensive
ones: housing, medical care, education. None of which is discussing the
comparative inequality of the two periods.

Are you saying inequality is _required_ for that list of innovations? If so,
on what grounds?

We came up with contraceptive pills, eradication of polio, visited the moon,
transformation of aviation and personal transportation, domestic appliances -
including TVs, washing machines, dish washers went from unaffordable luxury to
in every home. Doesn't seem like the pace of innovation has increased, just
moved to a different field compared with the period of lowest US inequality.
If anything it's slowed markedly.

So why didn't _these_ innovations need inequality?

Nit: antibiotics were commonly available 60 years ago, they just weren't yet
abused by stupid uses in agriculture.

~~~
atemerev
Most of these things were coming as a side effect of the huge Cold War era
military industrial complex. We’ll get it back soon enough.

Additionally, yes, the US society in the 50s-80s was pretty egalitarian and
full of opportunities — as long as you were white, male and heterosexual.

~~~
coldtea
> _Additionally, yes, the US society in the 50s-80s was pretty egalitarian and
> full of opportunities — as long as you were white, male and heterosexual._

It was full of opportunities for all kinds of people, not just "white, male,
and heterosexual". That's when the civil rights movement and the feminist
movement flourished too and ensured the rights for women and blacks.

People born after some age seem to remember some bizarro version of history,
when it was all oppression with no redeeming qualities, and if you were a
woman or black etc you were as good as dead. People think we made some huge
strides in the 00s, probably because they have no experience of the 60s to
90s. That main strides have been done for gay/lesbian rights (and even those
were increasingly more permissible after the 70s and the sexual revolution).

Though all of the above are beyond the point. As if to have those other things
(affordable housing, college and healthcare) that the 50s-80s enjoyed, you
need to also have racism and sexism... How does that compute?

------
SmooL
"-Normal distributions come from multifactorial situations, where many
variables matter. -In a world governed by scarcity, our decisions and
preferences tend to be multifactorial in nature. -In a world governed by
abundance, on the other hand, our decisions are no longer multifactorial. They
tend to be dominated by one factor above all others: either X matters to you,
or it doesn’t."

I'm more curious as to _why_ our decisions become dominated by one factor as
we approach abundance. It almost seems counter-intuitive: in a world of
abundance, wouldn't there be more things we could afford to care about? In a
world of scarcity, wouldn't your decision be based mostly by just "does it do
what I want it to do"?

Maybe we're just lazy. Maybe it's the other way around: in a world of
abundance, we can _afford_ to be _lazy_ and not care about nearly as much, and
instead focus on singular values.

In either case, I'm not convinced that decision distribution is a function of
scarcity/abundance, but rather some other factor, of which scarcity/abundance
contributes to.

~~~
blfr
_In a world of scarcity, wouldn 't your decision be based mostly by just "does
it do what I want it to do"?_

Yes but also "can I afford it?", "is it available?", "will it be shipped on
time and to my address", etc. When you reach real abundance and everything is
at your fingertips, the only factor that matters is whether you want it.

------
polote
> Chances are good that if you’re in the market for a smartphone, you fall
> into one of two very clear cut categories. Either: a. you’ve decided that
> your new phone is a very important item in your life, so you’re going to buy
> the nicest phone available at whatever price. (Usually this means an iPhone,
> although some flagship Android phones qualify for this category.) Or, b.
> you’ve decided that just about every phone out there is ‘good enough’ and is
> more than adequate for your needs, so you’ll go with whatever one costs $0
> with your existing wireless contract.

He doesn't provide any figure, he just says things and consider them to be
true.

~~~
bko
I don't think it is true. Just a cursory google search suggests that the
market, at least globally, is a lot flatter and is likely flattening. Not
everyone has an iPhone or Samsung. [0]

Similarly, those large cities he lists (LA, New York and San Fran) have
relatively low population growth, at 0.67%, 0.25% and 1% respectively [1].
Large cities like Phoenix, and Austin have around 2% growth.

This makes more sense to me. As these cities become crowded and expensive,
people will naturally look for a better deal.

These types of articles are just lazy. The author doesn't even seem to bother
doing basic research.

[0] [http://zindagi.online/2018/12/03/gartner-global-
smartphone-s...](http://zindagi.online/2018/12/03/gartner-global-smartphone-
shipments-grew-1-4-in-q3-2018/)

[1] [http://worldpopulationreview.com/us-
cities/](http://worldpopulationreview.com/us-cities/)

~~~
Barrin92
Yes, it's just a wrong intuition sold as fact. Millenials have increasingly
started to buy larger cars and moved from the big cities to the sunbelt and
the suburbs.

([https://www.theatlantic.com/business/archive/2017/04/why-
is-...](https://www.theatlantic.com/business/archive/2017/04/why-is-everyone-
leaving-the-city/521844/))

The idea that everyone will be riding around in shared cars and live in the LA
megalopolis is a tech industry fantasy.

~~~
bobthepanda
It’s worth noting that it’s unclear whether or not this is a generational
preference for the suburbs, or rather a result of a lack of suburban-
equivalent amenities for families like safe parks, good, not-overcrowded
schools, and available daycare options. Not to mention a lack of housing at
the 2+ bedroom size.

It’s still a reversal of the ‘60s and ‘70s where the cities were being
abandoned wholesale.

------
in_cahoots
The author almost stumbles on the answer to his question when he shows the
height distribution. It’s bimodal, because men and women have different
average heights. Similarly, flagship and lower-tier phone buyers will display
distributions in what they’re willing to pay. If you combine two separate
normal distributions you can always make a claim that a single distribution is
no longer normal. But that doesn’t make it an interesting insight on its face.

~~~
mrob
It's not similar to height distribution. At the population statistics level,
human height is bimodal because humans either have a Y chromosome or they
don't. What is the equivalent binary variable for the phone market?

~~~
coldtea
Obviously income. Are you in the upper 20% that does great (or still fine), or
in the 80% that's increasingly scrapping by?

~~~
mrob
Except income is no longer bimodal. It was back in the 70s, but now there's
just a single peak. See:

[https://ourworldindata.org/uploads/2013/12/Global-
inequality...](https://ourworldindata.org/uploads/2013/12/Global-inequality-
in-1800-1975-and-2015.png)

However, growth in income is bimodal:

[https://commons.wikimedia.org/wiki/File:Global_changes_in_re...](https://commons.wikimedia.org/wiki/File:Global_changes_in_real_income_by_income_percentile_-
_v1.png)

Could that affect the phone market indirectly, by consumer confidence? It's
possible, but it's not nearly as clear-cut as human height.

~~~
coldtea
Also account for wealth (we don't make the distinction between income and
wealth much in my here parts).

------
unreal37
One phenomenon in the "concert ticket" space is that promoters have discovered
a way to dynamically price tickets. So you'll pay the concert promoter $1000
to sit front and center.

So instead of all floor tickets being $100, there are some floor tickets that
are worth way, way more than others. Even "row 1" tickets up in the 3rd deck
are more than row 2 tickets in the same section now.

Ticket pricing has evolved to maximize profits at the source. The value of the
tickets is very close to their retail price.

So if you ask "how much would you pay for Taylor Swift tickets", the answer is
"depends on what row".

------
jdhn
His paragraph about jobs is spot on. I've seen this in my own workplace on a
team that is 75% contractors and 25% full time employees. Contractors are seen
as completely replaceable, and if one leaves they'll be replaced with another
one after a quick round of interviews. However, if a full time employee
leaves, the process to replace them seems to take much longer as it appears
that those doing the hiring are looking for The Superstar. I'm not sure how to
fix this, or if it's even possible to fix.

~~~
unreal37
The fix is to always hire contractors, let the bad ones go, and convert the
good ones to full time if you can.

~~~
Hermitian909
In any industry where good employees are in high demand (like tech) this
strategy has the unfortunate effect of filtering out most individuals who are
both good employees _and_ experienced. None of the really good software
engineers I know would accept this arrangement unless the contracting wages
were a ridiculous multiplier of their normal salary.

~~~
antt
Really? Because I wouldn't accept a normal salary unless it was 20% higher
than my contracting rates. Because I go through my own company I get to
minimize my taxes so much that regular employment seems like a ripoff by
comparison.

~~~
Hermitian909
Yes really.

First, for a number of positions, salary can make up less than 70% of total
compensation. Things like healthcare, stock options, bonuses, PTO, etc. are
worth quite a lot of money. To make up for that you need a good multiplier on
salary.

Second, unemployment benefits and the possibility of severance offer increased
stability that many find both useful and comforting, this is another
multiplier on the salary number.

Third, and I think most importantly, the person I'm responding is looking at
contractors who _want to be employees_. We can even set aside the fact that
such people, in my experience, rarely set up corporations are do the research
to find the tax savings you achieve (kudos on that). If you're an in-demand
professional there are people who will hire you on terms you like. Every
really good software developer I know with over 4 years of experience never
spends more than a couple weeks on the market and are _flooded_ with offers,
why bother with some contracting "test" when they could have a good job today?
The people I'm acquainted with would only subject themselves to that for giant
gobs of money.

------
mywittyname
Lots of things follow a Pareto distribution (which is what the author is
describing). This is the default distribution for anything that relies on
network effects and competes in a market with limited availability.

Famously, word usage follows this pattern (Zipf's law). But other things such
as wealth accumulation, product usage, celebrity fame, upvotes on Reddit, etc
all have this distribution. It's not possible for every person to read every
post, evaluate every possible drink, or watch every movie, so they settle on
one of the most immediately available options. So they drink a Coke while
watching The Avengers and upvote the top-rated comment on Reddit about it.

------
geitir
I would predict things tend toward the bi distribution the article talks about
during market lulls and that competition rather than abundance creates the
gaussian distribution. In the example of smartphones given, there hasn't been
the same rapid progress as there was between each generation even a few years
ago. So most middle of the road smartphones are all fairly comparable. That
said, if someone wanted to take the energy and time to find the best available
of this mid tier I'm sure they could, it's just the majority seeking the
middle of the road find the average of this tier good enough. If any
revolutionary comes out again soon I would guess there would be an immediate
gaussian distribution again

------
stackzero
I like the idea but it seems the author is just slicing the normal
distribution at a point of interest and calling it bifurcated? e.g. with the
phone example. "good enough android" or "iphone / flagship android" all the
actual phone models are hidden under two higher level labels. Isn't every
decision making process with buying essentially try to get the best for your
money?

------
JMTQp8lwXL
If this author's conjectures are correct (and I think there's some truth to
them), my honest response is not care about anything. Because I'm not willing
to be price gouged. If I know that something priced at the top end for the
sake of it, I won't pay. I don't _need_ to care about Taylor Swift that much.
I don't _need_ the latest smartphone.

This doesn't work with everything; for example, I could need access to health
care. But for the vast majority of non life-or-death purchases, I'll opt-out.

I don't think I agree with the rationale: the bifurcation is more likely based
in economics. Niche appeal at 10x the cost might be more profitable that
reasonably priced, mass appeal products. E.g., when it comes to things like
Taylor Swift tickets. I'm unwilling to spend a few hundred dollars to see her.
These live performances are for people who are.

------
opportune
This is a dumb article. Wow, the author rediscovered a beta distribution
without knowing what a beta distribution is.

~~~
JMTQp8lwXL
Not everyone is an expert in statistics. But there were many other interesting
points beyond the statistical in the article, like the implication of this
phenomena on our economy.

------
mac01021
Caring about something is not a binary, all-or-nothing affair. I care about
some things a lot, others a fair amount, and yet others quite little.

And for most of the examples given in the OP, I still find myself landing in
the middle, between two supposed modes.

So I guess I'm not entirely convinced.

------
narrator
I wish this guy had some data to back his ideas up.

~~~
cfarm
Yes - it would be interesting if you could somehow tie this to our record low
unemployment and low inflationary environment.

