Extremistan vs. Mediocristan

These are the terms that Nassim Nicolas Taleb uses to describe two very different distributions of wealth. In Mediocristan, everyone has a roughly equal distribution of assets. Statistical observations work because the outliers won't unduly affect the observation. But in Extremistan, the distribution is orders of magnitude higher for a very few. Statistics don't work well as predictors because of the disproportionate influence of the few. It's very hard to predict what will happen in extremistan.

Taleb makes a convincing argument that we live in Extremistan. For instance, as an author, Taleb is familliar with the publishing industry's winner-take-all mentality; most book sales are from the same few books. Harry Potter is an example of a book that hit it big, whose author has profited far more than most. Extremistan is an exciting place to live, because there is more opportunity -- or, as Taleb likes to say, illusion of opportunity, because rocketing to the top is an improbable occurance.

As isolated hunter-gatherers, humans lived in Mediocristan, but with the rise of civilizations and global communication I think that genie is out of the bottle. In any discussion of fairness between people, I think we have to assume that there will be "outliers" who command far more money/power/fame than the rest.

Here's a speech by Taleb explaining some of these ideas in more detail:
A Crazier Future

This is just an introduction of some ideas; applying them to the problem of how to devise "fair" societies is still a puzzle.