## Posts Tagged ‘**Pareto efficiency**’

## “If a ‘religion’ is defined to be a system of ideas that contains unprovable statements, then Gödel taught us that mathematics is not only a religion, it is the only religion that can prove itself to be one”*…

In 1931, the Austrian logician Kurt Gödel pulled off arguably one of the most stunning intellectual achievements in history.

Mathematicians of the era sought a solid foundation for mathematics: a set of basic mathematical facts, or axioms, that was both consistent — never leading to contradictions — and complete, serving as the building blocks of all mathematical truths.

But Gödel’s shocking incompleteness theorems, published when he was just 25, crushed that dream. He proved that any set of axioms you could posit as a possible foundation for math will inevitably be incomplete; there will always be true facts about numbers that cannot be proved by those axioms. He also showed that no candidate set of axioms can ever prove its own consistency.

His incompleteness theorems meant there can be no mathematical theory of everything, no unification of what’s provable and what’s true. What mathematicians can prove depends on their starting assumptions, not on any fundamental ground truth from which all answers spring.

In the 89 years since Gödel’s discovery, mathematicians have stumbled upon just the kinds of unanswerable questions his theorems foretold. For example, Gödel himself helped establish that the continuum hypothesis, which concerns the sizes of infinity, is undecidable, as is the halting problem, which asks whether a computer program fed with a random input will run forever or eventually halt. Undecidable questions have even arisen in physics, suggesting that Gödelian incompleteness afflicts not just math, but — in some ill-understood way — reality…

A (relatively) simple explanation of the incompleteness theorem– which destroyed the search for a mathematical theory of everything: “How Gödel’s Proof Works.”

* John D. Barrow, *The Artful Universe*

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**As we noodle on the unknowable,** we might spare a thought for Vilfredo Federico Damaso Pareto; he died on this date in 1923. An engineer, sociologist, economist, political scientist, and philosopher, he made several important contributions to economics, sociology, and mathematics.

He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He was also the first to discover that income follows a Pareto distribution, which is a power law probability distribution. The Pareto principle, named after him, generalized on his observations on wealth distribution to suggest that, in most systems/settings, 80% of the effects come from 20% of the causes– the “80-20 rule.” He was also responsible for popularizing the use of the term “elite” in social analysis.

As Benoit Mandelbrot and Richard L. Hudson observed, “His legacy as an economist was profound. Partly because of him, the field evolved from a branch of moral philosophy as practised by Adam Smith into a data intensive field of scientific research and mathematical equations.”

The future leader of Italian fascism Benito Mussolini, in 1904, when he was a young student, attended some of Pareto’s lectures at the University of Lausanne. It has been argued that Mussolini’s move away from socialism towards a form of “elitism” may be attributed to Pareto’s ideas.

Mandelbrot summarized Pareto’s notions as follows:

At the bottom of the Wealth curve, he wrote, Men and Women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time – until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion’s share. The weak starve, lest society become degenerate: One can, Pareto wrote, ‘compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.’ Inflammatory stuff – and it burned Pareto’s reputation… [

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