Vilfredo Pareto

Lore & Background

Pareto was born in Paris in 1848 to an exiled noble Genoese family. His father was an Italian civil engineer and Ligurian marquis, and his mother was French. He earned a doctorate in engineering in 1869 from what is now the Polytechnic University of Turin, with a dissertation on equilibrium in solid bodies. He worked as a civil engineer for the state-owned Italian Railway Company and later in private industry, including as manager of the Iron Works of San Giovanni Valdarno. He did not begin serious work in economics until his mid-forties, initially as a lecturer at the University of Florence. In 1893, he succeeded Léon Walras to the chair of Political Economy at the University of Lausanne, where he remained for the rest of his life.

Reader's Guide

Pareto's significance lies in his introduction of the concept of Pareto efficiency and his development of microeconomics. He was the first to claim that income follows a Pareto distribution, a power law probability distribution. The Pareto principle, named after him, was based on his observation that 80% of the wealth in Italy belonged to about 20% of the population. In sociology, he developed the notion of the circulation of elites, distinguishing between the mass and the elite, and argued that history is driven by the struggle between emerging and established elites. His work influenced Harvard sociologists such as Talcott Parsons and was introduced to the United States by George C. Homans and Lawrence Joseph Henderson. Pareto's later years were spent on his best-known work, Trattato di sociologia generale (1916), which explored nonlogical social action and the concepts of 'residues' and 'derivations.'

Did You Know?

• Pareto was born in Paris and originally named Wilfried Fritz, changing to Vilfredo Federico after his family moved back to Italy in 1858.
• He married a Russian woman, Alessandrina Bakunina, in 1889; she left him in 1902 for a young servant.
• His dissertation was titled 'The Fundamental Principles of Equilibrium in Solid Bodies,' which influenced his later interest in equilibrium analysis.
• Pareto opposed wealth redistribution, arguing that reducing higher incomes would provide only a small benefit to those earning less.

Notable Quotes (Wikiquote)

"Vilfredo Pareto (July 15 1848 – August 19 1923) was an Italian engineer, sociologist, economist, and philosopher, who contributed greatly to turning economics into a data-based science." — Vilfredo Pareto "History is a graveyard of aristocracies." — Vilfredo Pareto "Citations are from the English translation published in 1971 by Augustus M. Kelley, publishers. Translated by Ann S. Schwier from the French edition of 1927." — Vilfredo Pareto "The assertion that men are objectively equal is so absurd that it does not even merit being refuted." — Vilfredo Pareto