The ubiquitous Bell Curve
Insurance payouts rely on actuarial tables using the bell curve to predict claims and set premiums.
The Bell Curve: Its prevalence in natural and social phenomena often leads to its perception as a fundamental law. At its core, the bell curve is a statistical (as opposed to a physical) concept where the distribution of a characteristic in a population is symmetrically arranged around a central value. As the characteristic’s value deviates from this central value, fewer individuals in the population are likely to exhibit it. This distribution, when plotted with the characteristic value on one axis and the number of individuals on the other, takes on the shape of a bell.
Consider the scenario where we measure the heights (characteristics) of all adults (population) in a town. Most adults will have heights around the average (say, 5.5 feet) (central value), forming the peak of the distribution of height vs. number of people with that height. As the heights deviate from this average, the number of people with those heights decreases, creating a bell-like shape. Thus, fewer people are found at the extremes of very short or very tall.
There are countless enigmatic forces that result in the bell curve distribution of characteristics in natural and social phenomena. We may not fully understand why the characteristics of living beings follow a bell curve, but the fact they do necessitates that we grapple with its implications.
Small initial differences, amplified by positive feedback, can lead to a broadening of the bell curve, indicating increased variance or disparities over time. In the context of wealth distribution, minor initial differences in financial resources can, over time, result in significant wealth inequalities. This is exemplified by the fact that the wealthiest 1% possess nearly twice as much wealth as the remainder of the world combined. Indeed, the bell curve is at the heart of stark disparities.
To get a feel how the bell curve can broaden, consider wealth as an example. Imagine a population where, initially, everyone possesses the same amount of wealth. However, individual characteristics, which are inherently diverse, influence how individuals manage this wealth. Some individuals, being frugal, might save their wealth for future needs. Others, with a forward-thinking mindset, might invest their share. Yet others, driven by hedonism, might squander their wealth on immediate pleasures. Over time, these differing characteristics lead to small disparities in wealth, which eventually grow to become significant wealth inequalities as time passes.
The ubiquitousness of the bell curve, and its inevitable broadening over time, underscores the basic reason that disparities plague our society and are in constant need to be managed.
Given the ubiquity of the bell curve, it’s impossible to find societies where all individuals share identical characteristics. This is a fundamental trait of all groups, whether they’re human or composed of other animal species. One notable distinction is that in animals, physical variations are more consequential, whereas in humans living in the current era, psychological differences tend to have broader implications.
Indeed, the development of social norms and policies like taxation are attempts to manage the implications of the bell curve. These measures aim to mitigate the extremes and reduce disparities, particularly in wealth distribution.
Political ideologies often differ in their approach to how to manage the consequences of the bell curve. Democrats, for instance, generally advocate for policies that aim to flatten the bell curve, promoting a sense of equality. Republicans, on the other hand, often favor a laissez-faire approach, allowing natural forces to shape the distribution. If this results in a broadening of the bell curve, they view it as a natural outcome.
Indeed, the bell curve is a prevalent concept that significantly influences various aspects of our lives and society. The development and enforcement of societal norms are efforts to counteract its implications, as evidenced by historical fluctuations between periods of inequality and attempts at equalization. It could be argued that history is a narrative of societies wrestling with the effects of this omnipresent statistical phenomenon. However, it is important to remember that while the bell curve can offer insights, it cannot not mend its own consequences. It is us who possess the power to change our societies and adhere to norms that foster fairness and equality. By doing so, we can counteract the consequences of the bell curve.
Ciao.
