3. THIS IS THE GRAPH THAT GROUP E3 USED TO
REPRESENT PEOPLE’S ECONOMIC PATHS.
As you can see, their concept was that in the cycle of loss and gain, the
rich gain more than they lose (and so get continually richer), the middle class
breaks even (and so remain stagnant wealth-wise), and the poor's gains don't
make up for their losses (and so get progressively poorer). This graphs refers to
wealth in amounts. There are two glaring mistakes in this representation.
4. THE FIRST PROBLEM
The first is that the three lines begin
so close together. The wealth gap does widen
over time, true, but that doesn't mean that it
starts so small. In this case it would be more
accurate to have the following:
For reference:
5. THE SECOND PROBLEM
The other large issue with their graph
is that there are far too many "outliers".
Considering that their wealth axis is set on a
basis of specific economic values, only people
who begin with the exact amount of the three
y-intercepts are shown on this graph. So if you
were to give the axes the following values: (see
below graph)
For reference:
…only people who begin with 4,
8, or 12 units of wealth are
represented. Those who begin
with any other amount are
unaccounted for.
6. SOLUTION FOR THE SECOND PROBLEM
The graph should really look more like the
following one.
For reference:
However, it would
need infinitely more lines, but
creating this same basic shape.
The pink line would be
stationed at whatever y-value
is considered at the time to be
median wealth/wage.
7. ANOTHER APPROACH
Now there's another entirely different approach that yields the same
meaning, using relativity and percentiles. It is drawn as one of the most basic
graphs of all, the y=x graph. Here, the x and y axes both represent a wealth
percentile. The x axis represents your financial standing when you start, and your
y axis represents your financial standing when you finish.
8. A SIMPLIFIED EXPLANATION
Say there's 100 people in a city. You happen to be the
second richest person in the city, so you are the 99th
percentile. Similarly to the fashion that group E3 had been
trying to demonstrate with their graph, you as one of the rich,
are getting richer. However, your wealth doesn't increase
faster than the one richest person, or slower than the people
who started poorer than you, so you continue to rank as the
second richest person in town. Thus, your final percentile
value is 99, and you fall on the y=x line.
For reference:
9. SCATTER PLOTTED
Now that graph also has outliers
not taken into account, though in this
case they are actually a minority. If you
were to scatter plot the percentile graph,
it would look something like this:
For reference:
The red dots are outliers.
However, as you can see the
line is what is commonly
known as a best fit line, and is
therefore acceptable.
10. BUT.
(Here starts part two in which I contradict some of what
I just said mostly because I'm switching topics to the
best fit line discussion.)
11. Best fit lines should never be
considered acceptable! The are
one of the most prevalent
examples of humans and our
dependency on taxonomy!
12. HERE’S WHY…
When given the below
scatterplot…
People attempt to draw
what they call a best fit
line. Which ends up looking
like the following.
From four unconnected points on the graph, we conjure up
a best fit line, and say that it represents them. But it doesn't! Only
one of the points is actually on the line, yet we deem this the line
that represents the data. Unless your best fit line goes through at
least 90% of the points on the graph, it should be considered invalid.
13. SO WHY DO WE DRAW BEST FIT LINES?
It's a form of taxonomy. A way to say
that things (or points) are a part of a
category (or line) that they really aren't. It
helps us to associate things with whatever
is similar, and ignore outliers.
14. WHICH BRINGS ME TO MY NEXT POINT.
(HAHA, POINT, GET IT?)
The gravest form of the best fit line and
taxonomy is...
THE MODEL.
Modeling is the worst kind of best fit line.
15. WHY MODELS ARE UNACCEPTABLE
So we study three different revolutions, and then create a
model/system based off of those three that should be applicable to
every other situation. Not only are outliers disregarded, but nearly
all other events are too!
Let me explain visually.
16. The red dots represent the events that we studied. This
graph shows only the data that we studied.
Key:
Red dots = Events Studied
17. Here the gray line is the best fit line or the model, made
based on the data.
Key:
Red Dots = Events Studied
Gray Line = Best Fit Line for Red Dots
18. The green dots are all the events that took place that we
didn't study. So it's obvious that the events fell in a very
wide range.
Key:
Red Dots = Events Studied
Gray Line = Best Fit Line for
Red Dots
Green Dots = Unstudied Events
in History
19. So here are all the events throughout history, and the one
model that was made to represent all of them. I don't think
it quite works, do you?
Key:
Red Dots = Events Studied
Gray Line = Best Fit Line/Model
for Red Dots
Green Dots = Unstudied Events
in History
20. IN CONCLUSION…
We draw best fit lines and create models in order to
fool ourselves into thinking that:
a) It's actually possible to categorize the world
b) There is actually one line or model that applies
to every point of data
c) We understand the world
