Tim Lee continues to preach it over at TPMCafe
For reasons that aren’t clear to me, a lot of people seem to have a very different intuition when we’re talking about the distribution of dollars rather than eyeballs or Wikipedia edits. The mere existence of growing income inequality is treated as a prima facie evidence of serious flaws in the American economic system. People seem to assume that such a distribution cannot arise absent systematic distortions redistributing income upwards. Therefore, even if we can’t identify the specific mechanism that’s robbing from the poor and giving to the rich, we can infer its operation from the skewed distribution of income.
But in fact, the processes that give rise to income inequality are roughly the same as the processes that give rise to inequality online. We should expect that even in a perfectly just economic system, some people would earn a lot more money than others, and that the gap would grow over time as technological progress increases the size of the market and the potential for division of labor.
It’s not obvious to me that the mechanism that drives inequality in Wikipedia edits is the same as the one driving blog traffic inequality, but Tim’s right that both these mechanisms are in work in the broader economy. In Wikipedia, I think you see a sort of regular 80/20 effect; a minority does most of the work. But what do they get for that? Blogs seem like a pretty typical superstar market. The small minority dominating traffic don’t necessarily have a large productivity advantage. The highest traffic blogs are all high-volume, but lots of high-volume, high-quality blogs get very little traffic. People want to read what other people are reading, so the blogs that win the competition to become a focal point for attention reap most of the traffic.
Will Wilkinson 