Malcom Gladwell’s last two essays in the New Yorker (Troublemakers and Million Dollar Murphy) are both about power-law distributions; in fact I think you can make the arguement that most of his writing is about power-law distributions. It cheers me to see such a high profile discussion of the power-law distribution.
These last two essays are about problem cases; i.e. that in a large population of actors a small handful will own the responsiblity for the majority of the externalities the population creates. His examples include problem dogs, problem homeless people, poluting cars, and violent policemen. You’ll notice, the externalities he focuses on are negative externalities.
The more recent essay, which isn’t on line as yet, makes a point that oft goes under appreciated. One’s natural intuitions about how to handle the typical case need to be completely turned upside down when you’re dealing with the elite. If the societal cost of a high maintainance homeless person is a million dollars a year then you ought to be willing to drop a few hundred thousand to keep that cost in control. That’s a very hard pill to swallow when the current social services ethic is to dump a single mother of two off the welfare roles – presumably because you’re concerned about creating “dependency.” In the high cost homeless case you want to create dependency.
Dealing with the elite players in a population is just plain a different problem than dealing with the typical ones, even if it is hopeless hairsplitting to find the edge that distinquishes the elite from the middle-class or typcial members of the population.
I wish he’d found a way to draw more examples to two classes. His emphasis is over weighted toward bad actors which tends to encourage the readers to forget that the most overarching social power-law distribution is that of wealth and property. Similarly his set of examples, with the exception of the police, are all drawn from the poor – people with lousy cars, people without homes, isolated people with unsocialized dogs. This compounds the sin of diverting attention from the powerful elite by licensing the use of exceptional means only on the least powerful members of society.
But there are bad-actors in all populations. Emphasis on bad actors drawn from weak populations makes us forget that how this the same problem always arises. It arises with giant corporations, the ultra-rich, the politically well connected. Many of those actors aren’t bad; but their scale makes the harm they do far greater than a million dollar a year homeless person. Just as the elite in any population tend to, they require regulatory schemes that are entirely different than those used on typical actors.
The comparison of hundreds of thousands vs a million makes me think of opportunity cost, but I’m not sure how you’d measure it for other bad actors.