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Vilfredo Federico Damaso Pareto (UK: ,US: , Italian: , Ligurian: ; born Wilfried Fritz Pareto[citation needed]; 15 July 1848 – 19 August 1923) was an Italian civil engineer, sociologist, economist, political scientist, and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices. He was also responsible for popularising the use of the term "elite" in social analysis.

He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He was also the first to discover that income follows a Pareto distribution, which is a power law probability distribution. The Pareto principle was named after him, and it was built on observations of his such as that 80% of the wealth in Italy belonged to about 20% of the population. He also contributed to the fields of sociology and mathematics, according to the mathematician Benoit Mandelbrot and Richard L. Hudson:

His legacy as an economist was profound. Partly because of him, the field evolved from a branch of moral philosophy as practised by Adam Smith into a data intensive field of scientific research and mathematical equations. His books look more like modern economics than most other texts of that day: tables of statistics from across the world and ages, rows of integral signs and equations, intricate charts and graphs.

Contents

Pareto was born of an exiled noble Genoese family in 1848 in Paris, the centre of the popular revolutions of that year. His father, Raffaele Pareto (1812–1882), was an Italian civil engineer and Ligurian marquis who had left Italy much as Giuseppe Mazzini and other Italian nationalists had. His mother, Marie Metenier, was a French woman. Enthusiastic about the revolutions of 1848 in the German states, his parents named him Wilfried Fritz, which became Vilfredo Federico upon his family's move back to Italy in 1858. In his childhood, Pareto lived in a middle-class environment, receiving a high standard of education, attending the newly created Istituto Tecnico Leardi where Fernando Pio Rosellini was his mathematics professor. In 1869, he earned a doctorate in engineering from what is now the Polytechnic University of Turin (then the Technical School for Engineers), with a dissertation entitled "The Fundamental Principles of Equilibrium in Solid Bodies". His later interest in equilibrium analysis in economics and sociology can be traced back to this dissertation.

From civil engineer to classical liberal economist

For some years after graduation, he worked as a civil engineer, first for the state-owned Italian Railway Company and later in private industry. He was manager of the Iron Works of San Giovanni Valdarno and later general manager of Italian Iron Works.

He did not begin serious work in economics until his mid-forties. He started his career a fiery advocate of classical liberalism, besetting the most ardent British liberals with his attacks on any form of government intervention in the free market. In 1886, he became a lecturer on economics and management at the University of Florence. His stay in Florence was marked by political activity, much of it fueled by his own frustrations with government regulators. In 1889, after the death of his parents, Pareto changed his lifestyle, quitting his job and marrying a Russian, Alessandrina Bakunina.

Economics and sociology

In 1893, he succeeded Léon Walras to the chair of Political Economy at the University of Lausanne in Switzerland where he remained for the rest of his life. He published there in 1896-1897 a textbook containing the Pareto distribution of how wealth is distributed, which he believed was a constant "through any human society, in any age, or country". In 1906, he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy, later generalised by Joseph M. Juran into the Pareto principle (also termed the 80–20 rule).

Pareto maintained cordial personal relationships with individual socialists, but he always thought their economic ideas were severely flawed. He later became suspicious of their motives and denounced socialist leaders as an 'aristocracy of brigands' who threatened to despoil the country and criticized the government of Giovanni Giolitti for not taking a tougher stance against worker strikes. Growing unrest among labor in Italy led him to the anti-socialist and anti-democratic camp. His attitude toward fascism in his last years is a matter of controversy.

Pareto's relationship with scientific sociology in the age of the foundation is grafted in a paradigmatic way in the moment in which he, starting from the political economy, criticizes positivism as a totalizing and metaphysical system devoid of a rigorous logical-experimental method. In this sense we can read the fate of the Paretian production within a history of the social sciences that continues to show its peculiarity and interest for its contributions in the 21st century. The story of Pareto is also part of the multidisciplinary research of a scientific model that privileges sociology as a critique of cumulative models of knowledge as well as a discipline tending to the affirmation of relational models of science.

Personal life

In 1889, Pareto married Alessandrina Bakunina, a Russian. She left him in 1902 for a young servant. Twenty years later in 1923, he married Jeanne Regis, a French woman, just before his death in Geneva, Switzerland on 19 August 1923.

Pareto's later years were spent in collecting the material for his best-known work, Trattato di sociologia generale (1916) (The Mind and Society, published in 1935). His final work was Compendio di sociologia generale (1920).

In his Trattato di Sociologia Generale (1916, rev. French trans. 1917), published in English by Harcourt, Brace in a four-volume edition edited by Arthur Livingston under the title The Mind and Society (1935), Pareto developed the notion of the circulation of elites, the first social cycle theory in sociology. He is famous for saying "history is a graveyard of aristocracies".

Pareto seems to have turned to sociology for an understanding of why his abstract mathematical economic theories did not work out in practice, in the belief that unforeseen or uncontrollable social factors intervened. His sociology holds that much social action is nonlogical and that much personal action is designed to give spurious logicality to non-rational actions. We are driven, he taught, by certain "residues" and by "derivations" from these residues. The more important of these have to do with conservatism and risk-taking, and human history is the story of the alternate dominance of these sentiments in the ruling elite, which comes into power strong in conservatism but gradually changes over to the philosophy of the "foxes" or speculators. A catastrophe results, with a return to conservatism; the "lion" mentality follows. This cycle might be broken by the use of force, says Pareto, but the elite becomes weak and humanitarian and shrinks from violence.

Among those who introduced Pareto's sociology to the United States were George Homans and Lawrence J. Henderson at Harvard, and Paretian ideas gained considerable influence, especially on Harvard sociologist Talcott Parsons, who developed a systems approach to society and economics that argues the status quo is usually functional. The American historian Bernard DeVoto played an important role in introducing Pareto's ideas to these Cambridge intellectuals and other Americans in the 1930s. Wallace Stegner, in his biography of DeVoto, recounts these developments and says this about the often misunderstood distinction between "residues" and "derivations": "Basic to Pareto's method is the analysis of society through its non-rational 'residues,' which are persistent and unquestioned social habits, beliefs, and assumptions, and its 'derivations,' which are the explanations, justifications, and rationalizations we make of them. One of the commonest errors of social thinkers is to assume rationality and logic in social attitudes and structures; another is to confuse residues and derivations."

Pareto was a lifelong opponent of Marxism.

Renato Cirillo wrote:

Vilfredo Pareto has been labelled a fascist and ‘a precursor of fascism’ largely because he welcomed the advent of fascism in Italy and was honored by the new regime. Some have seen in his sociological works the foundations of fascism. This is not correct. Even fascist writers did not find much merit in these works, and definitely condemned his economic theories. As a political thinker he remained a radical libertarian till the end, and continued to express serious reservations about fascism, and to voice opposition to its basic policies. This is evident from his correspondence with his close friends. There are strong reasons to believe that, had he lived long enough, Pareto would have revolted against fascism.

Benoit Mandelbrot wrote:

One of Pareto's equations achieved special prominence, and controversy. He was fascinated by problems of power and wealth. How do people get it? How is it distributed around society? How do those who have it use it? The gulf between rich and poor has always been part of the human condition, but Pareto resolved to measure it. He gathered reams of data on wealth and income through different centuries, through different countries: the tax records of Basel, Switzerland, from 1454 and from Augsburg, Germany, in 1471, 1498 and 1512; contemporary rental income from Paris; personal income from Britain, Prussia, Saxony, Ireland, Italy, Peru. What he found – or thought he found – was striking. When he plotted the data on graph paper, with income on one axis, and number of people with that income on the other, he saw the same picture nearly everywhere in every era. Society was not a "social pyramid" with the proportion of rich to poor sloping gently from one class to the next. Instead it was more of a "social arrow" – very fat on the bottom where the mass of men live, and very thin at the top where sit the wealthy elite. Nor was this effect by chance; the data did not remotely fit a bell curve, as one would expect if wealth were distributed randomly. "It is a social law", he wrote: something "in the nature of man".: 153

Pareto had argued that democracy was an illusion and that a ruling class always emerged and enriched itself. For him, the key question was how actively the rulers ruled. For this reason, he called for a drastic reduction of the state and welcomed Benito Mussolini's rule as a transition to this minimal state so as to liberate the "pure" economic forces.

Mandelbrot summarized Pareto's notions as follows:

At the bottom of the Wealth curve, he wrote, Men and Women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time – until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion's share. The weak starve, lest society become degenerate: One can, Pareto wrote, 'compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.' Inflammatory stuff – and it burned Pareto's reputation.: 154

The future leader of Italian fascism Benito Mussolini, in 1904, when he was a young student, attended some of Pareto's lectures at the University of Lausanne. It has been argued that Mussolini's move away from socialism towards a form of "elitism" may be attributed to Pareto's ideas.

To quote Franz Borkenau, a biographer:

In the first years of his rule Mussolini literally executed the policy prescribed by Pareto, destroying political liberalism, but at the same time largely replacing state management of private enterprise, diminishing taxes on property, favoring industrial development, imposing a religious education in dogmas.: 18

Karl Popper dubbed Pareto the "theoretician of totalitarianism", but, according to Renato Cirillo, there is no evidence in Popper's published work that he read Pareto in any detail before repeating what was then a common but dubious judgment in anti-fascist circles.

Some fascist writers, such as Luigi Amoroso, wrote approvingly of Pareto's ideas:

Just as the weaknesses of the flesh delayed, but could not prevent, the triumph of Saint Augustine, so a rationalistic vocation retarded but did not impede the flowering of the mysticism of Pareto. For that reason, Fascism, having become victorious, extolled him in life, and glorifies his memory, like that of a confessor of its faith.

Author Renato Cirillo argued, on the contrary, that:

Some have seen in [Pareto's] sociological works the foundations of fascism. This is not correct. Even fascist writers did not find much merit in these works, and definitely condemned his economic theories.

Pareto's elite theory also influenced a number of liberal theorists, such as the anti-fascist Piero Gobetti, who wrote:

The concept of an elite that imposes itself by exploiting a channel of interests and general psychological conditions against the old leaders who have exhausted their function is genuinely liberal.

Other liberals influenced by Pareto include Norberto Bobbio and Raymond Aron.

Pareto Theory Of Maximum Economics

Pareto turned his interest to economic matters and he became an advocate of free trade, finding himself in difficulty with the Italian government. His writings reflected the ideas of Léon Walras that economics is essentially a mathematical science. Pareto was a leader of the "Lausanne School" and represents the second generation of the Neoclassical Revolution. His "tastes-and-obstacles" approach to general equilibrium theory was resurrected during the great "Paretian Revival" of the 1930s and has influenced theoretical economics since.

In his Manual of Political Economy (1906) the focus is on equilibrium in terms of solutions to individual problems of "objectives and constraints". He used the indifference curve of Edgeworth (1881) extensively, for the theory of the consumer and, another great novelty, in his theory of the producer. He gave the first presentation of the trade-off box now known as the "Edgeworth-Bowley" box.

Pareto was the first to realize that cardinal utility could be dispensed with and economic equilibrium thought of in terms of ordinal utility – that is, it was not necessary to know how much a person valued this or that, only that he preferred X of this to Y of that. Utility was a preference-ordering. With this, Pareto not only inaugurated modern microeconomics, but he also demolished the alliance of economics and utilitarian philosophy (which calls for the greatest good for the greatest number; Pareto said "good" cannot be measured). He replaced it with the notion of Pareto-optimality, the idea that a system is enjoying maximum economic satisfaction when no one can be made better off without making someone else worse off. Pareto optimality is widely used in welfare economics and game theory. A standard theorem is that a perfectly competitive market creates distributions of wealth that are Pareto optimal.

Concepts

Some economic concepts in current use are based on his work:

  • The Pareto index is a measure of the inequality of income distribution.

He argued that in all countries and times, the distribution of income and wealth is highly skewed, with a few holding most of the wealth. He argued that all observed societies follow a regular logarithmic pattern:

  1. N = A x m {\displaystyle \ N=Ax^{m}}

where N is the number of people with wealth higher than x, and A and m are constants. Over the years, Pareto's Law has proved remarkably close to observed data.

  • The Pareto chart is a special type of histogram, used to view causes of a problem in order of severity from largest to smallest. It is a statistical tool that graphically demonstrates the Pareto principle or the 80–20 rule.
  • Pareto's law concerns the distribution of income.
  • The Pareto distribution is a probability distribution used, among other things, as a mathematical realization of Pareto's law.
  • Ophelimity is a measure of purely economic satisfaction.
Compendio di sociologia generale, 1920

English translations

  • The Mind and Society, New York: Harcourt, Brace and Company, 1935 (translation ofTrattato di sociologia generale). (Vol. I, Vol. II, Vol. III, Vol. IV)
    • Compendium of General Sociology, University of Minnesota Press, 1980 (abridgement of The Mind and Society; translation of Compendio di sociologia generale).
  • Sociological Writings, Praeger, 1966 (translations of excerpts from major works).
  • Manual of Political Economy, Augustus M. Kelley, 1971 (translation of 1927 French edition of Manuale di economia politica con una introduzione alla scienza sociale).
  • The Transformation of Democracy, Transaction Books, 1984 (translation of Trasformazione della democrazia).
  • The Rise and Fall of Elites: An Application of Theoretical Sociology, Transaction Publishers, 1991 (translation of essay Un applicazione di teorie sociologiche).

Articles

  1. Robert A. Nye (1977). The Anti-Democratic Sources of Elite Theory: Pareto, Mosca, Michels. Sage. p. 22.
  2. J. J. Chambliss, ed. (2013). Philosophy of Education: An Encyclopedia. Routledge. p. 179.
  3. Geoffrey Duncan Mitchell. A Hundred Years of Sociology. Transaction Publishers, 1968. p. 115. ISBN 9780202366647
  4. "Pareto". Lexico UK English Dictionary. Oxford University Press. n.d. Retrieved28 July 2019.
  5. "Pareto". Merriam-Webster Dictionary. Retrieved28 July 2019.
  6. Mandelbrot, Benoit; Richard L Hudson (2004).The (mis)behavior of markets : a fractal view of risk, ruin, and reward. New York: Basic Books. p. 153. ISBN 0465043577.
  7. Amoroso, Luigi (January 1938). "Vilfredo Pareto". Econometrica. 6 (1): 1–21. doi:10.2307/1910081. JSTOR 1910081.
  8. van Suntum, Ulrich (2005).The Invisible Hand. Springer. p. 30. ISBN 3-540-20497-0.
  9. Giacalone-Monaco, Tommaso (1966). "Ricerche intorno alla giovinezza di Vilfredo Pareto". Giornale degli Economisti e Annali di Economia (in Italian). 25 (1/2): 97–104. ISSN 0017-0097. JSTOR 23239355.
  10. "The Encyclopedia Sponsored by Statistics and Probability Societies". StatProb. 19 August 1923. Archived from the original on 4 March 2016. Retrieved4 November 2015. among a menagerie of cats that he and his French lover kept [in their villa;] the local divorce laws prevented him from divorcing his wife and remarrying until just a few months prior to his death.
  11. Bellamy, Richard (1990). "From Ethical to Economic Liberalism – The Sociology of Pareto's Politics". Economy and Society. 19 (4): 431–55. doi:10.1080/03085149000000016.
  12. Cirillo, Renato (1983). "Was Vilfredo Pareto really a 'precursor' of fascism?". American Journal of Economics and Sociology. 42 (2): 235–246. doi:10.1111/j.1536-7150.1983.tb01708.x. JSTOR 3486644. Vilfredo Pareto has been labeled a fascist and 'a precursor of fascism' largely because he welcomed the advent of fascism in Italy and was honored by the new regime. Some have seen in his sociological works the foundations of fascism. This is not correct: Even fascist writers did not find much merit in these works, and definitely condemned his economic theories. As a political thinker he remained a radical libertarian till the end, and continued to express serious reservations about fascism, and to voice opposition to its basic policies. This is evident from his correspondence with his close friends. There are strong reasons to believe that, had he lived long enough, Pareto would have revolted against fascism
  13. Campbell, Stuart L. (1986). "The four Paretos of Raymond Aron". Journal of the History of Ideas. 47 (2): 287–298. doi:10.2307/2709815. JSTOR 2709815.
  14. Giovanni Busino, Sugli studi paretiani all'alba del XXI secolo in Omaggio a Vilfredo Pareto, Numero monografico in memoria di Giorgio Sola a cura di Stefano Monti Bragadin, "Storia Politica Società", Quaderni di Scienze Umane, anno IX, n. 15, giugno-dicembre 2009, p. 1 e sg.
  15. Guglielmo Rinzivillo, Vilfredo Pareto e i modelli interdisciplinari nella scienza, "Sociologia", A. XXIX, n. 1, New Series, 1995, pp. 2017–2222
  16. Guglielmo Rinzivillo, Una epistemologia senza storia, Rome, New Culture, 2013, pp. 13–29, ISBN 978-88-6812-222-5
  17. Rossides, Daniel W. (1998) Social Theory: Its Origins, History, and Contemporary Relevance. Rowman & Littlefield. p. 203. ISBN 1882289501.
  18. Aron, Raymond. (1967) Main Currents in Sociological Thought: Durkheim, Pareto, Weber – Vol. 2 online edition; excerpt and text search
  19. Homans, George C., and Charles P. Curtis Jr. (1934) An Introduction to Pareto: His Sociology. Alfred A. Knopf. New York.
  20. Wallace Stegner, The Uneasy Chair: A Biography of Bernard DeVoto (Garden City, NY: Doubleday, 1974), p. 141.
  21. "Vilfredo Pareto – An Overview". Jkalb.freeshell.org. Retrieved4 November 2015.
  22. "Was Vilfredo Pareto Really a 'Precursor' of Fascism?". The America Journal of Economics and Sociology. 1983.
  23. Mandelbrot, Benoit (2006). "The Mystery of Cotton". The Misbehavior of Markets: A Fractal View of Financial Turbulence. Basic Books. ISBN 978-0465043576.
  24. Eatwell, Roger; Anthony Wright (1999). Contemporary Political Ideologies. London: Continuum. pp. 38–39. ISBN 082645173X.
  25. Di Scala, Spencer M.; Gentile, Emilio, eds. (2016). Mussolini 1883–1915: Triumph and Transformation of a Revolutionary Socialist. USA: Palgrave Macmillan. ISBN 978-1-137-53486-6.
  26. Borkenau, Franz (1936). Pareto. New York: John Wiley & Sons.
  27. Mandelbrot, Benoit; Richard L Hudson (2004). The (mis)behavior of markets : a fractal view of risk, ruin, and reward. New York: Basic Books. pp. 152–155. ISBN 0465043577.
  28. Martin, J. (2008). Piero Gobetti and the Politics of Liberal Revolution. Springer. p. 84.
  29. Campbell, Stuart L. (1986). "The Four Paretos of Raymond Aron". Journal of the History of Ideas. 47 (2): 287–298. doi:10.2307/2709815. JSTOR 2709815.
  30. Cirillo, Renato (1978) The Economics of Vilfredo Pareto
  31. Mclure, Michael (2001) Pareto, Economics and Society: The Mechanical Analogy.
  32. Aspers, Patrik (April 2001). "Crossing the Boundary of Economics and Sociology: The Case of Vilfredo Pareto"(PDF). The American Journal of Economics and Sociology. 60 (2): 519–545. doi:10.1111/1536-7150.00073. JSTOR 3487932.
  33. Mathur, Vijay K (2014). "How Well Do We Know Pareto Optimality?". The Journal of Economic Education. 22 (2): 172–178. doi:10.1080/00220485.1991.10844705. JSTOR 1182422.

Primary sources

  • Pareto, Vilfredo (1935). "The Mind and Society [Trattato Di Sociologia Generale]". Harcourt, Brace.{{cite journal}}:Cite journal requires |journal= ()
Wikimedia Commons has media related toVilfredo Pareto.
Wikiquote has quotations related to Vilfredo Pareto.

Vilfredo Pareto Article Talk Language Watch Edit This article contains too many or overly lengthy quotations for an encyclopedic entry Please help improve the article by presenting facts as a neutrally worded summary with appropriate citations Consider transferring direct quotations to Wikiquote or for entire works to Wikisource May 2022 Vilfredo Federico Damaso Pareto 3 UK p ae ˈ r eɪ t oʊ ˈ r iː t pa RAY toh EE 4 US p e ˈ r eɪ t oʊ pe RAY toh 5 Italian vilˈfreːdo paˈreːto Ligurian paˈɾeːtu born Wilfried Fritz Pareto citation needed 15 July 1848 19 August 1923 was an Italian civil engineer sociologist economist political scientist and philosopher He made several important contributions to economics particularly in the study of income distribution and in the analysis of individuals choices He was also responsible for popularising the use of the term elite in social analysis Vilfredo ParetoBornWilfried Fritz Pareto 1848 07 15 15 July 1848 Paris FranceDied19 August 1923 1923 08 19 aged 75 Celigny SwitzerlandNationalityItalianInstitutionsUniversity of LausanneFieldMicroeconomics SocioeconomicsSchool or traditionLausanne School Italian school of elitism 1 2 Alma materPolytechnic University of TurinInfluencesComte Machiavelli Michels Mosca Pantaleoni Sorel Spencer WalrasContributionsCirculation of elite Ophelimity Pareto analysis Pareto chart Pareto distribution Pareto efficiency Pareto index Pareto interpolation Pareto priority index Pareto principle The Mind and SocietySignature He introduced the concept of Pareto efficiency and helped develop the field of microeconomics He was also the first to discover that income follows a Pareto distribution which is a power law probability distribution The Pareto principle was named after him and it was built on observations of his such as that 80 of the wealth in Italy belonged to about 20 of the population He also contributed to the fields of sociology and mathematics according to the mathematician Benoit Mandelbrot and Richard L Hudson His legacy as an economist was profound Partly because of him the field evolved from a branch of moral philosophy as practised by Adam Smith into a data intensive field of scientific research and mathematical equations His books look more like modern economics than most other texts of that day tables of statistics from across the world and ages rows of integral signs and equations intricate charts and graphs 6 Contents 1 Biography 1 1 From civil engineer to classical liberal economist 1 2 Economics and sociology 1 3 Personal life 2 Sociology 3 Fascism and power distribution 4 Economic concepts 4 1 Concepts 5 Major works 5 1 English translations 5 2 Articles 6 See also 7 References 8 Further reading 8 1 Primary sources 9 External linksBiography EditPareto was born of an exiled noble Genoese family in 1848 in Paris the centre of the popular revolutions of that year His father Raffaele Pareto 1812 1882 was an Italian civil engineer and Ligurian marquis who had left Italy much as Giuseppe Mazzini and other Italian nationalists had 7 His mother Marie Metenier was a French woman Enthusiastic about the revolutions of 1848 in the German states his parents named him Wilfried Fritz which became Vilfredo Federico upon his family s move back to Italy in 1858 8 In his childhood Pareto lived in a middle class environment receiving a high standard of education attending the newly created Istituto Tecnico Leardi where Fernando Pio Rosellini was his mathematics professor 9 In 1869 he earned a doctorate in engineering from what is now the Polytechnic University of Turin 7 then the Technical School for Engineers with a dissertation entitled The Fundamental Principles of Equilibrium in Solid Bodies His later interest in equilibrium analysis in economics and sociology can be traced back to this dissertation From civil engineer to classical liberal economist Edit For some years after graduation he worked as a civil engineer first for the state owned Italian Railway Company and later in private industry He was manager of the Iron Works of San Giovanni Valdarno and later general manager of Italian Iron Works 7 He did not begin serious work in economics until his mid forties He started his career a fiery advocate of classical liberalism besetting the most ardent British liberals with his attacks on any form of government intervention in the free market In 1886 he became a lecturer on economics and management at the University of Florence His stay in Florence was marked by political activity much of it fueled by his own frustrations with government regulators In 1889 after the death of his parents Pareto changed his lifestyle quitting his job and marrying a Russian Alessandrina Bakunina 10 Economics and sociology Edit In 1893 he succeeded Leon Walras to the chair of Political Economy at the University of Lausanne in Switzerland where he remained for the rest of his life 7 He published there in 1896 1897 a textbook containing the Pareto distribution of how wealth is distributed which he believed was a constant through any human society in any age or country 7 In 1906 he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy later generalised by Joseph M Juran into the Pareto principle also termed the 80 20 rule Pareto maintained cordial personal relationships with individual socialists but he always thought their economic ideas were severely flawed He later became suspicious of their motives and denounced socialist leaders as an aristocracy of brigands who threatened to despoil the country and criticized the government of Giovanni Giolitti for not taking a tougher stance against worker strikes Growing unrest among labor in Italy led him to the anti socialist and anti democratic camp 11 His attitude toward fascism in his last years is a matter of controversy 12 13 Pareto s relationship with scientific sociology in the age of the foundation is grafted in a paradigmatic way in the moment in which he starting from the political economy criticizes positivism as a totalizing and metaphysical system devoid of a rigorous logical experimental method In this sense we can read the fate of the Paretian production within a history of the social sciences that continues to show its peculiarity and interest for its contributions in the 21st century 14 The story of Pareto is also part of the multidisciplinary research of a scientific model that privileges sociology as a critique of cumulative models of knowledge as well as a discipline tending to the affirmation of relational models of science 15 16 Personal life Edit In 1889 Pareto married Alessandrina Bakunina a Russian She left him in 1902 for a young servant Twenty years later in 1923 he married Jeanne Regis a French woman just before his death in Geneva Switzerland on 19 August 1923 10 Sociology EditPareto s later years were spent in collecting the material for his best known work Trattato di sociologia generale 1916 The Mind and Society published in 1935 His final work was Compendio di sociologia generale 1920 In his Trattato di Sociologia Generale 1916 rev French trans 1917 published in English by Harcourt Brace in a four volume edition edited by Arthur Livingston under the title The Mind and Society 1935 Pareto developed the notion of the circulation of elites the first social cycle theory in sociology He is famous for saying history is a graveyard of aristocracies 17 Pareto seems to have turned to sociology for an understanding of why his abstract mathematical economic theories did not work out in practice in the belief that unforeseen or uncontrollable social factors intervened His sociology holds that much social action is nonlogical and that much personal action is designed to give spurious logicality to non rational actions We are driven he taught by certain residues and by derivations from these residues The more important of these have to do with conservatism and risk taking and human history is the story of the alternate dominance of these sentiments in the ruling elite which comes into power strong in conservatism but gradually changes over to the philosophy of the foxes or speculators A catastrophe results with a return to conservatism the lion mentality follows This cycle might be broken by the use of force says Pareto but the elite becomes weak and humanitarian and shrinks from violence 18 Among those who introduced Pareto s sociology to the United States were George Homans and Lawrence J Henderson at Harvard and Paretian ideas gained considerable influence especially on Harvard sociologist Talcott Parsons who developed a systems approach to society and economics that argues the status quo is usually functional 19 The American historian Bernard DeVoto played an important role in introducing Pareto s ideas to these Cambridge intellectuals and other Americans in the 1930s Wallace Stegner in his biography of DeVoto recounts these developments and says this about the often misunderstood distinction between residues and derivations Basic to Pareto s method is the analysis of society through its non rational residues which are persistent and unquestioned social habits beliefs and assumptions and its derivations which are the explanations justifications and rationalizations we make of them One of the commonest errors of social thinkers is to assume rationality and logic in social attitudes and structures another is to confuse residues and derivations 20 Pareto was a lifelong opponent of Marxism 21 Fascism and power distribution EditRenato Cirillo wrote Vilfredo Pareto has been labelled a fascist and a precursor of fascism largely because he welcomed the advent of fascism in Italy and was honored by the new regime Some have seen in his sociological works the foundations of fascism This is not correct Even fascist writers did not find much merit in these works and definitely condemned his economic theories As a political thinker he remained a radical libertarian till the end and continued to express serious reservations about fascism and to voice opposition to its basic policies This is evident from his correspondence with his close friends There are strong reasons to believe that had he lived long enough Pareto would have revolted against fascism 22 Benoit Mandelbrot wrote One of Pareto s equations achieved special prominence and controversy He was fascinated by problems of power and wealth How do people get it How is it distributed around society How do those who have it use it The gulf between rich and poor has always been part of the human condition but Pareto resolved to measure it He gathered reams of data on wealth and income through different centuries through different countries the tax records of Basel Switzerland from 1454 and from Augsburg Germany in 1471 1498 and 1512 contemporary rental income from Paris personal income from Britain Prussia Saxony Ireland Italy Peru What he found or thought he found was striking When he plotted the data on graph paper with income on one axis and number of people with that income on the other he saw the same picture nearly everywhere in every era Society was not a social pyramid with the proportion of rich to poor sloping gently from one class to the next Instead it was more of a social arrow very fat on the bottom where the mass of men live and very thin at the top where sit the wealthy elite Nor was this effect by chance the data did not remotely fit a bell curve as one would expect if wealth were distributed randomly It is a social law he wrote something in the nature of man 23 153 Pareto had argued that democracy was an illusion and that a ruling class always emerged and enriched itself For him the key question was how actively the rulers ruled For this reason he called for a drastic reduction of the state and welcomed Benito Mussolini s rule as a transition to this minimal state so as to liberate the pure economic forces 24 Mandelbrot summarized Pareto s notions as follows At the bottom of the Wealth curve he wrote Men and Women starve and children die young In the broad middle of the curve all is turmoil and motion people rising and falling climbing by talent or luck and falling by alcoholism tuberculosis and other kinds of unfitness At the very top sit the elite of the elite who control wealth and power for a time until they are unseated through revolution or upheaval by a new aristocratic class There is no progress in human history Democracy is a fraud Human nature is primitive emotional unyielding The smarter abler stronger and shrewder take the lion s share The weak starve lest society become degenerate One can Pareto wrote compare the social body to the human body which will promptly perish if prevented from eliminating toxins Inflammatory stuff and it burned Pareto s reputation 23 154 The future leader of Italian fascism Benito Mussolini in 1904 when he was a young student attended some of Pareto s lectures at the University of Lausanne It has been argued that Mussolini s move away from socialism towards a form of elitism may be attributed to Pareto s ideas 25 To quote Franz Borkenau a biographer In the first years of his rule Mussolini literally executed the policy prescribed by Pareto destroying political liberalism but at the same time largely replacing state management of private enterprise diminishing taxes on property favoring industrial development imposing a religious education in dogmas 26 18 Karl Popper dubbed Pareto the theoretician of totalitarianism 27 but according to Renato Cirillo there is no evidence in Popper s published work that he read Pareto in any detail before repeating what was then a common but dubious judgment in anti fascist circles 12 Some fascist writers such as Luigi Amoroso wrote approvingly of Pareto s ideas Just as the weaknesses of the flesh delayed but could not prevent the triumph of Saint Augustine so a rationalistic vocation retarded but did not impede the flowering of the mysticism of Pareto For that reason Fascism having become victorious extolled him in life and glorifies his memory like that of a confessor of its faith 7 Author Renato Cirillo argued on the contrary that Some have seen in Pareto s sociological works the foundations of fascism This is not correct Even fascist writers did not find much merit in these works and definitely condemned his economic theories 12 Pareto s elite theory also influenced a number of liberal theorists such as the anti fascist Piero Gobetti who wrote The concept of an elite that imposes itself by exploiting a channel of interests and general psychological conditions against the old leaders who have exhausted their function is genuinely liberal 28 Other liberals influenced by Pareto include Norberto Bobbio and Raymond Aron 29 Economic concepts EditPareto Theory Of Maximum Economics Pareto turned his interest to economic matters and he became an advocate of free trade finding himself in difficulty with the Italian government His writings reflected the ideas of Leon Walras that economics is essentially a mathematical science Pareto was a leader of the Lausanne School and represents the second generation of the Neoclassical Revolution His tastes and obstacles approach to general equilibrium theory was resurrected during the great Paretian Revival of the 1930s and has influenced theoretical economics since 30 In his Manual of Political Economy 1906 the focus is on equilibrium in terms of solutions to individual problems of objectives and constraints He used the indifference curve of Edgeworth 1881 extensively for the theory of the consumer and another great novelty in his theory of the producer He gave the first presentation of the trade off box now known as the Edgeworth Bowley box 31 Pareto was the first to realize that cardinal utility could be dispensed with and economic equilibrium thought of in terms of ordinal utility 32 that is it was not necessary to know how much a person valued this or that only that he preferred X of this to Y of that Utility was a preference ordering With this Pareto not only inaugurated modern microeconomics but he also demolished the alliance of economics and utilitarian philosophy which calls for the greatest good for the greatest number Pareto said good cannot be measured He replaced it with the notion of Pareto optimality the idea that a system is enjoying maximum economic satisfaction when no one can be made better off without making someone else worse off Pareto optimality is widely used in welfare economics and game theory A standard theorem is that a perfectly competitive market creates distributions of wealth that are Pareto optimal 33 Concepts Edit Some economic concepts in current use are based on his work The Pareto index is a measure of the inequality of income distribution He argued that in all countries and times the distribution of income and wealth is highly skewed with a few holding most of the wealth He argued that all observed societies follow a regular logarithmic pattern N A x m displaystyle N Ax m where N is the number of people with wealth higher than x and A and m are constants Over the years Pareto s Law has proved remarkably close to observed data The Pareto chart is a special type of histogram used to view causes of a problem in order of severity from largest to smallest It is a statistical tool that graphically demonstrates the Pareto principle or the 80 20 rule Pareto s law concerns the distribution of income The Pareto distribution is a probability distribution used among other things as a mathematical realization of Pareto s law Ophelimity is a measure of purely economic satisfaction Major works Edit Compendio di sociologia generale 1920 Cours d Economie Politique Professe a l Universite de Lausanne in French 1896 97 Vol I Vol II Les Systemes Socialistes in French 1902 Vol I Vol II Manuale di economia politica con una introduzione alla scienza sociale in Italian 1906 Trattato di sociologia generale in Italian G Barbera Florence 1916 Vol I Vol II Compendio di sociologia generale in Italian Florence Barbera 1920 Abridgement of Trattato di sociologia generale Fatti e teorie in Italian 1920 Collection of previously published articles with an original epilogue Trasformazione della democrazia in Italian 1921 Collection of previously published articles with an original appendix English translations Edit The Mind and Society New York Harcourt Brace and Company 1935 translation ofTrattato di sociologia generale Vol I Vol II Vol III Vol IV Compendium of General Sociology University of Minnesota Press 1980 abridgement of The Mind and Society translation of Compendio di sociologia generale Sociological Writings Praeger 1966 translations of excerpts from major works Manual of Political Economy Augustus M Kelley 1971 translation of 1927 French edition of Manuale di economia politica con una introduzione alla scienza sociale The Transformation of Democracy Transaction Books 1984 translation of Trasformazione della democrazia The Rise and Fall of Elites An Application of Theoretical Sociology Transaction Publishers 1991 translation of essay Un applicazione di teorie sociologiche Articles Edit The Parliamentary Regime in Italy Political Science Quarterly Vol VIII Ginn amp Company 1893 The New Theories of Economics Journal of Political Economy Vol 5 No 4 Sep 1897 An Italian View The Living Age November 1922 See also EditElite theoryReferences Edit Robert A Nye 1977 The Anti Democratic Sources of Elite Theory Pareto Mosca Michels Sage p 22 J J Chambliss ed 2013 Philosophy of Education An Encyclopedia Routledge p 179 Geoffrey Duncan Mitchell A Hundred Years of Sociology Transaction Publishers 1968 p 115 ISBN 9780202366647 Pareto Lexico UK English Dictionary Oxford University Press n d Retrieved 28 July 2019 Pareto Merriam Webster Dictionary Retrieved 28 July 2019 Mandelbrot Benoit Richard L Hudson 2004 The mis behavior of markets a fractal view of risk ruin and reward New York Basic Books p 153 ISBN 0465043577 a b c d e f Amoroso Luigi January 1938 Vilfredo Pareto Econometrica 6 1 1 21 doi 10 2307 1910081 JSTOR 1910081 van Suntum Ulrich 2005 The Invisible Hand Springer p 30 ISBN 3 540 20497 0 Giacalone Monaco Tommaso 1966 Ricerche intorno alla giovinezza di Vilfredo Pareto Giornale degli Economisti e Annali di Economia in Italian 25 1 2 97 104 ISSN 0017 0097 JSTOR 23239355 a b The Encyclopedia Sponsored by Statistics and Probability Societies StatProb 19 August 1923 Archived from the original on 4 March 2016 Retrieved 4 November 2015 among a menagerie of cats that he and his French lover kept in their villa the local divorce laws prevented him from divorcing his wife and remarrying until just a few months prior to his death Bellamy Richard 1990 From Ethical to Economic Liberalism The Sociology of Pareto s Politics Economy and Society 19 4 431 55 doi 10 1080 03085149000000016 a b c Cirillo Renato 1983 Was Vilfredo Pareto really a precursor of fascism American Journal of Economics and Sociology 42 2 235 246 doi 10 1111 j 1536 7150 1983 tb01708 x JSTOR 3486644 Vilfredo Pareto has been labeled a fascist and a precursor of fascism largely because he welcomed the advent of fascism in Italy and was honored by the new regime Some have seen in his sociological works the foundations of fascism This is not correct Even fascist writers did not find much merit in these works and definitely condemned his economic theories As a political thinker he remained a radical libertarian till the end and continued to express serious reservations about fascism and to voice opposition to its basic policies This is evident from his correspondence with his close friends There are strong reasons to believe that had he lived long enough Pareto would have revolted against fascism Campbell Stuart L 1986 The four Paretos of Raymond Aron Journal of the History of Ideas 47 2 287 298 doi 10 2307 2709815 JSTOR 2709815 Giovanni Busino Sugli studi paretiani all alba del XXI secolo in Omaggio a Vilfredo Pareto Numero monografico in memoria di Giorgio Sola a cura di Stefano Monti Bragadin Storia Politica Societa Quaderni di Scienze Umane anno IX n 15 giugno dicembre 2009 p 1 e sg Guglielmo Rinzivillo Vilfredo Pareto e i modelli interdisciplinari nella scienza Sociologia A XXIX n 1 New Series 1995 pp 2017 2222 Guglielmo Rinzivillo Una epistemologia senza storia Rome New Culture 2013 pp 13 29 ISBN 978 88 6812 222 5 Rossides Daniel W 1998 Social Theory Its Origins History and Contemporary Relevance Rowman amp Littlefield p 203 ISBN 1882289501 Aron Raymond 1967 Main Currents in Sociological Thought Durkheim Pareto Weber Vol 2 online edition excerpt and text search Homans George C and Charles P Curtis Jr 1934 An Introduction to Pareto His Sociology Alfred A Knopf New York Wallace Stegner The Uneasy Chair A Biography of Bernard DeVoto Garden City NY Doubleday 1974 p 141 Vilfredo Pareto An Overview Jkalb freeshell org Retrieved 4 November 2015 Was Vilfredo Pareto Really a Precursor of Fascism The America Journal of Economics and Sociology 1983 a b Mandelbrot Benoit 2006 The Mystery of Cotton The Misbehavior of Markets A Fractal View of Financial Turbulence Basic Books ISBN 978 0465043576 Eatwell Roger Anthony Wright 1999 Contemporary Political Ideologies London Continuum pp 38 39 ISBN 082645173X Di Scala Spencer M Gentile Emilio eds 2016 Mussolini 1883 1915 Triumph and Transformation of a Revolutionary Socialist USA Palgrave Macmillan ISBN 978 1 137 53486 6 Borkenau Franz 1936 Pareto New York John Wiley amp Sons Mandelbrot Benoit Richard L Hudson 2004 The mis behavior of markets a fractal view of risk ruin and reward New York Basic Books pp 152 155 ISBN 0465043577 Martin J 2008 Piero Gobetti and the Politics of Liberal Revolution Springer p 84 Campbell Stuart L 1986 The Four Paretos of Raymond Aron Journal of the History of Ideas 47 2 287 298 doi 10 2307 2709815 JSTOR 2709815 Cirillo Renato 1978 The Economics of Vilfredo Pareto Mclure Michael 2001 Pareto Economics and Society The Mechanical Analogy Aspers Patrik April 2001 Crossing the Boundary of Economics and Sociology The Case of Vilfredo Pareto PDF The American Journal of Economics and Sociology 60 2 519 545 doi 10 1111 1536 7150 00073 JSTOR 3487932 Mathur Vijay K 2014 How Well Do We Know Pareto Optimality The Journal of Economic Education 22 2 172 178 doi 10 1080 00220485 1991 10844705 JSTOR 1182422 Further reading EditAmoroso Luigi Vilfredo Pareto Econometrica Vol 6 No 1 Jan 1938 Bruno G 1987 Pareto Vilfredo The New Palgrave A Dictionary of Economics v 5 pp 799 804 Buchanan James 2008 Italian Fiscal Theorists In Hamowy Ronald ed Italian Economic Theorists The Encyclopedia of Libertarianism Thousand Oaks CA SAGE Cato Institute pp 258 60 doi 10 4135 9781412965811 n156 ISBN 978 1 4129 6580 4 LCCN 2008009151 OCLC 750831024 Busino Giovanni The Signification of Vilfredo Pareto s Sociology Revue Europeenne des Sciences Sociales XXXVIII 2000 Eisermann G 2001 Pareto Vilfredo 1848 1923 International Encyclopedia of the Social amp Behavioral Sciences pp 11048 51 Abstract Femia Joseph V Pareto and Political Theory 2006 excerpt and text search permanent dead link Kirman A P 1987 Pareto as an economist The New Palgrave A Dictionary of Economics v 5 pp 804 08 Livingston Arthur Vilfredo Pareto A Biographical Portrait The Saturday Review 25 May 1935 Millikan Max Pareto s Sociology Econometrica Vol 4 No 4 Oct 1936 Osipova Elena Translated by H Campbell Creighton M A Oxon 1989 The Sociological System of Vilfredo Pareto in Igor Kon ed A History of Classical Sociology Moscow Progress Publishers pp 312 36 Palda Filip 2011 Pareto s Republic and the New Science of Peace 2011 1 chapters online Published by Cooper Wolfling ISBN 978 0 9877880 0 9 Parsons Talcott The Structure of Social Action The Free Press 1949 Tarascio Vincent J 1968 Pareto s Methodological Approach to Economics A Study in the History of Some Scientific Aspects of Economic Thought 1968 online edition Forte F Silvestri P Pareto s sociological maximum of utility of the community and the theory of the elites in J G Backhaus ed Essentials of Fiscal Sociology Conceptions of an Encyclopedia Peter Lang Frankfurt am Main 2013 pp 231 65 Della Pelle P a cura di Introduction a K Marx Le Capital par V Pareto edizione critica con il testo italiano a fronte Aracne Canterano 2018 Primary sources Edit Pareto Vilfredo 1935 The Mind and Society Trattato Di Sociologia Generale Harcourt Brace a href wiki Template Cite journal title Template Cite journal cite journal a Cite journal requires journal help External links EditWikimedia Commons has media related to Vilfredo Pareto Wikiquote has quotations related to Vilfredo Pareto The Two Biggest Ideas of Vilfredo Pareto in Economics Further information from New School University Review materials for studying Vilfredo Pareto Vilfredo Pareto 1848 1923 The Concise Encyclopedia of Economics Library of Economics and Liberty 2nd ed Liberty Fund 2008 Vilfredo Pareto A Concise Overview of His Life Works and Philosophy by Fr James Thornton Works by Vilfredo Pareto at Project Gutenberg Works by or about Vilfredo Pareto at Internet Archive More complete list of works Retrieved from https en wikipedia org w index php title Vilfredo Pareto amp oldid 1091550284, wikipedia, wiki, book,

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