Vilfredo Pareto

Lore & Background

Pareto was born of an exiled noble Genoese family on 15 July 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 Ferdinando Pio Rosellini was his mathematics professor. In 1869, he earned a doctorate in engineering from what is now the Polytechnic University of Turin, then known as 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. Pareto was among the contributors to the Rome-based magazine La Ronda between 1919 and 1922 and economics journal Giornale degli Economisti between 1890 and 1905.

Reader's Guide

For some years after graduation, Pareto 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 as 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 woman, Alessandrina Bakunina. In 1893, Pareto 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 per cent of the population owned eighty per cent 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 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 the Italian statesman Giovanni Giolitti for not taking a tougher stance against worker strikes. Growing unrest among labour in the Kingdom of Italy led him to the anti-socialist and anti-democratic camp. His attitude towards Italian 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 at 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 hi

Did You Know?

• Pareto introduced the concept of Pareto efficiency and helped develop the field of microeconomics.
• He was the first to claim that income follows a Pareto distribution, which is a power law probability distribution.
• The Pareto principle was named after him, built on his observations that 80% of the wealth in Italy belonged to about 20% of the population.
• Pareto's later years were spent in collecting the material for his best-known work, Trattato di sociologia generale (1916).
• He distinguished social classes into the mass and the elite, the elite itself being divided into a non-governing elite and a governing elite.

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