Vilfredo Frederico Damaso Pareto | Biography

Vilfredo Pareto's application of mathematics to economic analysis and sociology did much to advance the new fields' standing as legitimate sciences. Such developments as the Pareto optimum and his curves of indifference are analytical tools still used by some modern sociologists. He is still regarded today as the founder of mathematical economics--a title granted to him early in his own lifetime.

One of three children of an exiled Italian nobleman who supported his family through a successful career as a hydrological engineer, Pareto was born in Paris, France on July 15, 1848. He enjoyed an upper-middle-class upbringing, receiving a quality education in local private schools. Pareto completed a degree in engineering in 1869 at the Polytechnic Institute of Turin, finishing first in his class.

In 1871, he returned to a unified Italy with his parents and, like his father, found employment as a civil engineer with the government-run railroad. He was transferred to Florence in 1872, but two years later accepted a position as supervisor of an industrial firm that operated mining and ironworking companies in the Arno Valley. In this position, he was required to travel to England and Scotland, where he witnessed the effects of and admired the British government's free-market policies.

Evincing an increasing interest in politics, Pareto made a bid for a parliamentary seat in 1881. It was not successful, but did signify the beginning of a new period in his life. Although he continued to work as an engineer and manager throughout the 1880s, Pareto began writing many political commentaries and editorials. When he and his first wife, whom he married in 1889, retired to the countryside later that year, his writing became prolific. The government rebuffed his offer to put on a free lecture series on political economy, so Pareto began accepting speaking engagements. This finally attracted the attention of hostile bureaucrats, who sent police and (allegedly) paid thugs to stop his controversial speeches on economics. These mainly consisted of arguments in favor of free trade, open competition, and reduced government involvement in the economy.

In 1891, Pareto published his first papers in which he put complex economic theories into concise forms using mathematical formulas. Although the government continued to regard Pareto as a threat, he began to receive positive attention from the world of academia. It was because of this that he received an appointment as professor of political economy at Switzerland's University of Lausanne in 1893. There he quickly came to be known as "the father of mathematical economics." He published his first major work, A Course in Political Economics, in 1896. This contained a discussion of his controversial "law of income distribution," in which Pareto used a sophisticated mathematical technique to show that the distribution of wealth and income in society is not random, but rather follows a definite pattern that applies to all cultures the world over.

In 1898 there came another big change in Pareto's life. This took the form of a large inheritance that allowed him to buy a house in the Swiss countryside on Lake Geneva and concentrate on his writing. Although his wife left him in 1901, causing him considerable distress, most of Pareto's best work occurred during this period, including what many regard as his masterpiece, A Manual of Political Economy (1906). This publication developed his economic theory, expanded on his analysis of "ophelimity" (the power to satisfy), and established the foundation of modern welfare economics. The last was based on the Pareto optimum, which states that the best allocation of resources has not been achieved if it remains possible to make one person feel better about his economic situation while keeping others at the same level of satisfaction. The book also introduced curves of indifference, which became popular analytical tools for sociologists beginning in the 1930s.

It was in the early 1900s that Pareto began writing about sociology, a relatively new discipline that he felt could unify the discrete fields of economics and politics. His most influential book on this topic was A Treatise on General Sociology, published in English in 1916 as Mind and Society. Pareto considered this to be his greatest work. Here he introduced one of his most controversial ideas: the "circulation of elites." In this theory, Pareto argued that, as water will always seeks its own level, people will always sink or rise to the level of social status where they naturally belong, no matter into what sort of circumstances they were born. Based on what he called "the superiority of the elite," Pareto argued, low-born people with superior abilities would inevitably rise to the higher echelons of society while the converse was also true, whether through complacency or inferiority. He became the brunt of accusations of fascism for this belief, however.

Pareto had completed most of his important work by 1914 following years of self-imposed exile at his Swiss estate. He published Facts and Theories in 1920 and The Transformation of Democracy in 1921. Shortly after his first wife left, he fell deeply in love with another woman, Jane Regis, who became his companion and lover for the rest of his life. Pareto gradually withdrew even more from the mainstream of life, entertaining only close friends occasionally and spending many hours with his 18 Angora cats. A longtime sufferer of insomnia, he was an avid and voracious reader. Pareto and Regis married in the last months of his life after his first wife finally granted him a divorce. At about that time, he received a nomination as senator of the Italian Kingdom. Pareto died of heart disease at his Lake Geneva home in Celigny on August 19, 1923.