Pareto, Vilfredo | Research & Encyclopedia Articles

The unique contributions of Vilfredo Pareto (1848–1923) to mathematical economics as well as sociopolitical theory were predicated on a remarkable background and education. The son of Raffaele Pareto (a minor Italian noble, civil engineer, political refugee, repatriated professor, and then government minister) and a Frenchwoman, Marie Métenier, Fritz Wilfried Pareto (renamed in 1882 Vilfredo Frederico Damaso Pareto, ultimately the Marchese of Parigi), was born in Paris on July 15. The household was bilingual, but after his father's political safety was assured, the family removed to his native Genoa (1855–1859); spent several years in Casale Monferrato, Piedmont, so his father could improve his professional position as a government administrator of mines and industry; then went to Turin; and finally settled in Florence. In 1889 Pareto married Alessandrina "Dina" Bakounine (Bakunin; not from the anarchist's family), who left him in 1901. He lived with Jeanne Régis from 1906 and married her in 1923 (after relocating in order to divorce Bakounine), and adopted her daughter, Marguerita Antoinette Régis. He died on August 23 in Céligny, Switzerland, where he had lived since 1900, spurning honors bestowed on him in absentia by the new Italian fascist government.

Pareto was rigorously educated in mathematics and the natural sciences, as well as the classics, partly in the school where his father taught—he imitated his father by pursuing mathematics, physics, and engineering. He precociously finished his doctorate in 1870 with a thesis on the then-new applications of differential equations to the question of elasticity and equilibrium in solid bodies, a work he always valued.

His subsequent management positions (with the Rome Railway and then the Italian iron industry, 1870–1889) compelled him to travel throughout Europe to learn practical business matters, and eventually to loathe the seedy deal making that accompanied the job. His anti-government lectures to laborers were shut down, and repelled by the plutocratic government; he ran for a Florentine seat in the legislature. He wrote 167 political articles for newspapers and magazines between 1889 and 1893, arguing that the Italian aristocracy had ruined the national economy through protectionism, cronyism, and graft.

Barred from a professorship in Italy, he accepted Léon Walras's (1834–1910) vacated chair in political-economics at Lausanne, Switzerland in 1893. He retired at fifty with a substantial inheritance from his uncle and perfected his quest for a quantifiable social science inspired by his reading of Auguste Comte (1798–1857) (another prodigy who had studied mathematics and engineering and coined the term sociology). It was his extraordinary proficiency in applied mathematics that facilitated Pareto's cardinal contributions to early econometrics, to equilibrium and systems theory in sociology, and, by redefining cyclical patterns to rulership, to political science.

Pareto is a neglected genius of the modern period. Living coterminously with Max Weber (1864–1920), Émile Durkheim (1858–1917), Georg Simmel (1858–1918), and Sigmund Freud (1856–1939), he shared none of their posthumous fame—except for a brief period in the 1930s when he was lionized, especially among Harvard intellectuals. This is probably more a quirk of history than a sound judgment about the quality of his ideas and research. In his autobiography, Mussolini claimed to have attended Pareto's lectures on political economy at Lausanne (with many other students), and a link was forged in the popular mind between fascism and Pareto's theory of the circulation of elites. The connection is artificial because Pareto detested any form of authoritarian rule, including fascism. Yet his ideas have suffered as a consequence of this unsavory historical connection.

The arguments of Pareto's Course of Political Economy (1896), which features the Pareto optimality or ophelimity principle are nevertheless referenced in every economics textbook. Moreover his Socialist Systems (1902), the Manual of Political Economy (1904), and his million-word Mind and Society (1916) evidence a level of speedy productivity and creativity that has few rivals. These works have not been seriously reconsidered, except in Italy and France, during the entire post-World War II period.

Like other gifted scientists and technicians who since the Enlightenment have turned their analytic tools toward social analysis, Pareto realized that economics alone, even if elegantly quantitative in design, could not explain the great bulk of human behavior because people do not generally behave to maximize their utilities. Even though he claimed to rely on the logico-experimental method in all his socioeconomic analyses, he thoroughly understood its limitations. Pareto's complex typological analysis of the role of nonrational, nonlogical, or irrational behaviors (resides, derivations, and sentiments, as he called them) in individuals and social groups has not been equaled in scope and depth. Yet the pessimistic conclusions he drew from his dogged historical and cultural research repels most readers today who are understandably, given recent history, more interested in ameliorative than in denunciative social theory.

What makes Pareto so difficult to embrace is his clear-eyed insistence on examining history and contemporary events through the scientist's lens, free of any idealized notions of what ought to be or might have been. Intensely idealistic when young, he soured on the illusions of the epoch (e.g., nationalism, Marxism, socialism, anarchism, imperialism, among others), viewing all of them as delusionary systems enabling social actors to feign rational behavior while hiding their real motives behind baroque structures of excuses and ideological justifications (derivations). Pareto never read Freud, but his work could be viewed as adding a macroanalytic dimension to the microanalysis common to psychoanalysis. Similarly when economists now speak about the irrational exuberance of stock markets, they are unknowingly speaking in Pareto's terms, and could well put to use his analysis of the socioeconomic environment. The same goes with regard to many discussions of science and technology policy that propose benefits from cancer research or space exploration that lack sound justifications.

Comte, Auguste;; Efficiency;; Engineering Ethics;; Italian Perspectives;; Management.

Pareto, Vilfredo. (1935). Trattato di sociologia generale [Mind and Society]. 4 volumes, trans. Andrew Bongiorno and Arthur Livingston, with the advice and active cooperation of James Harvey Rogers. New York: Harcourt, Brace, and Co.

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