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Vilfredo Pareto
: American Libraries, Jun/Jul2001, Vol. 32 Issue 6, p72, 3p, 1bw
Crawford, Walt
The best public libraries are exceptional institutions--where "exceptional" is a literal description, not an encomium. Good public libraries cater to exceptions: to the ideas, people, and literature too often ignored in a majoritarian society. The best public libraries are also "counter-Pareto" institutions: They go beyond the Pareto Principle for the long-term good of the community.
What's the Pareto Principle? You've almost certainly used the observation even if you don't recall the name. Think of it as the 20:80 (or 80:20) rule. Twenty percent of the contributors in a field account for 80% of the field. So, for example, 20% of a restaurant's menu probably generates 80% of its business; 20% of a store's customers produce 80% of its business; 20% of currently released movies will do 80% of the box office business; 20% of advertising produces 80% of results. On the flip side, 20% of customers will generate 80% of the complaints--and solving 20% of the problems in a process may resolve 80% of the failures. The Pareto Principle holds true in an astonishingly wide variety of fields, including many aspects of librarianship.
Who was Pareto? Vilfredo Pareto (1848-1923) was an economist, sociological theorist, and--supposedly--avid gardener. Born in Paris, he graduated from the University of Turin and was a professor of political economy at the University of Lausanne in Switzerland. Pareto observed that 20% of the population of Italy owned 80% of the land. It's also said that he later observed that 20% of the peapods in his garden yielded 80% of the peas.
Did Vilfredo Pareto formulate a principle stating that in most fields a few of the contributors (20%) account for the bulk of the effect (80%)? Probably not. According to J. M. Juran, known as the "Dean of American consultants on quality control," the first published use of the term "Pareto Principle" was in the paper "Universals in Management Planning and Controlling," published in the October 1954 Management Review. Juran generalized Pareto's observations to other fields and chose to use Pareto's name for that generalization.
Juran's belated confession that the Pareto principle should probably be the Juran principle comes in a charming article, "The Non-Pareto Principle: Mea Culpa" (www. SP7518.html). However, as he notes, it's far too late to rename the principle of unequal distribution.
Pareto offered an observation in one field--one that echoed and qualified similar observations from previous scholars. Juran generalized the observation into a principle that seems to hold across most endeavors. That's all to the good: The Pareto Principle (whether rightly named or not) is useful shorthand for the sort of distribution that seems prevalent in many fields.
Juran went one step further, a step that made sense for quality control but causes problems elsewhere. He characterized the Pareto Principle as separating the "vital few" from the "trivial many." When you're locating the 20% of problems in a system that cause 80% of the difficulties in using that system, the distinction makes sense--particularly because you can proceed in an iterative fashion. That is, once you've corrected the worst 20%, chances are that 20% of the remaining problems--16% of the original--are causing 80% of the remaining difficulties--again, 16% of the original. Solve those (36% of the original problems) and you've approached perfection (eliminating 96% of the original difficulties).
When the Pareto Principle becomes the basis for decision-making, "trivial" can be a tricky word, as it slides quickly over into "irrelevant." You see that at some banks, stock brokerages, and other service institutions, where nearly all customer service is aimed at the 20% of depositors who represent 80% of the deposits: the rest of us are trivial. Some stores seem intent on reducing their customer base to the "vital" 20%; from a purely profit-oriented perspective that may be a reasonable attitude.
Even in the private sector, businesses run into trouble when they try to apply the Pareto Principle too broadly. Crown bookstores carry the 20% (or fewer) of books that represent 80% of sales--but Borders, Barnes and Noble, and similar superstores find it more profitable to carry much of the "irrelevant" 80%.
A similar situation may be playing out for video rentals. Pundits wrote off neighborhood video stores some years back: Video-on-demand, offering the 20% of movies that people really want to see, would wipe them out. But the video rental stores survive; even though most of us do indeed stick to the new releases (and to a minority of those), we appreciate the broader selection and will pay a few cents extra to have it available.
For that matter, some financial institutions have benefited from the Pareto orientation of their competitors. It's not unusual for people to move from the irrelevant 80% to the vital 20% as their conditions improve. People with reasonable memories make a point of avoiding those institutions that shunned them when they were struggling; that's a rational tendency that favors more egalitarian institutions.
Libraries: Counter-Pareto institutions?
It may be useful to think of public libraries as counter-Pareto institutions. Good public libraries concentrate on the other 20%: the 20% of needs and uses not satisfied by the "vital" 20% of resources, and the users left out by majoritarian services.
Consider some ways that the Pareto Principle affects libraries, and why libraries need to focus on the exceptions:
o Most of us get at least 80% of our information and entertainment from sources other than public libraries: TV, newspapers, magazine subscriptions, and so on. It's more difficult to satisfy the other 20% of our information and entertainment needs; if we're sensible, we look to public libraries for those exceptional needs.
o 80% of public library users may be satisfied with small popular collections, as they're looking for bestsellers and evergreens. Almost any library can satisfy those requirements; good libraries work to handle the special needs of the other 20%. That may mean that 80% of your collection goes to serve 20% of user needs--and maybe that's the way it should be.
o 80% of the user population of a typical public library can probably afford to buy all the books they want or need. Libraries are the most vital for the 20% who can't afford to buy their own materials.
o User surveys will show the 20% of library services that meet 80% of needs. Those may not be the most important services for the health of your community, particularly if you degrade the other 80% of services.
I am neither qualified to suggest formulas for incorporating counter-Pareto thinking nor brave enough to do so. Most libraries don't adhere to pure Pareto thinking in any case: It's a rare public library that devotes 80% of its acquisition budget to the 20% of materials that will yield 80% of the circulation, even though a case could be made for doing so. On the other hand, most public libraries also don't spread acquisitions funds evenly across the entire spectrum of publishing; you do--properly--devote more dollars to the materials most likely to be widely used and to meet your own community's immediate needs.
Counter-Pareto thinking: A hypothetical budget
Counter-Pareto thinking might suggest some balances. The numbers and ratios used here are illustrative and reflect a profound ignorance of current public library selection and budgeting process: this is entirely hypothetical. Let's assume a 1-million materials budget (suggesting at least a S5million operating budget), with 20% set aside for reference, special local collections, and digital resources, leaving ,000.
If your library knows borrowing patterns and has use-oriented acquisitions policies, it's fair to suggest that 40% of the remaining budget should be devoted to the "top 20%"-the items that will get 80% of potential circulation. That's ,000, leaving ,000.
Take another chunk out: 40% devoted to the next 20%--the materials that will fill 80% of remaining user needs. That's ,000--and you've now met 96% of likely user needs. (This assumes that the Pareto Principle does work iteratively for circulation patterns. That may not be true, but it's a reasonable starting point.)
Following these allocations--two levels of "giving 'em what they want"--you have ,000 available to meet special needs and to expand the horizons of your users. Should some portion of that money go to alternative literature, small-press books, and the resources that will make your most frequent users extremely uncomfortable? Possibly so; it's reasonable to suggest, in the famous aphorism of children's librarian Dorothy Broderick, that any good public library should have something in it to offend (or at least upset) almost anybody.
Even if you take a strongly majoritarian perspective and allocate half of your funds to the bestselling 20%, and do that twice, there should still be deliberate funding for exceptional cases. At the end of the first two cuts, ,000 should be available. ,000 will buy a lot of specialized resources, alternative literature, and small-press books-and it will help to build a diverse, lasting collection that will grow with your public as their needs and tastes change.
I'm not suggesting any radical changes in budgeting. My naive guess, based on browsing within a range of public libraries around the country, is that public libraries do engage in counter-Pareto thinking (perhaps unconsciously).
While the more problematic areas of publishing may receive less attention than they deserve, most good libraries do go well beyond what would be needed to serve everyday needs and popular demand. Instead of buying bestsellers at saturation levels, libraries generally buy and lease enough copies to be responsive while allocating some funds to important items that may circulate once a decade, but that will mean far more than any bestseller to the rare users who read those items.
The counter-Pareto perspective may clarify some misleading claims about the future of libraries. "Give 'em what they want" has always been a Pareto assertion; focus on the predictable materials that will please 80% of users. "Give 'em what they need," the counter-Pareto assertion, is much more difficult to carry out. Good libraries do both.
The vital 20%
o Information sources other than mass media.
o Nonbestsellers and nonevergreens.
o People who can't afford to buy books they want or need.

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