Vilfredo Pareto
Vilfredo Federico Damaso Pareto[4] (UK: /pæˈreɪtoʊ, -ˈriːt-/ parr-AY-toh, -EE-,[5] US: /pəˈreɪtoʊ/ pə-RAY-toh,[6] Italian: [vilˈfreːdo paˈreːto], Ligurian: [paˈɾeːtu]; born Wilfried Fritz Pareto;[7] 15 July 1848 – 19 August 1923) was an Italian polymath, whose areas of interest included sociology, civil engineering, economics, political science, and philosophy. 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 Pareto
He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He was also the first to claim 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 his observations that 80% of the wealth in Italy belonged to about 20% of the population. He also contributed to the fields of sociology and mathematics.
Sociology[edit]
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".[19]
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.[20]
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.[21] 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."[22]
Fascism and power distribution[edit]
Renato Cirillo wrote that Vilfredo Pareto had frequently been considered a predecessor of fascism as a result of his support for the movement when it began. However, Cirillo disagreed with this interpretation, suggesting that Pareto was critical of fascism in his private letters.[23]
Pareto 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]
When he was still a young student, the future leader of Italian fascism Benito Mussolini attended some of Pareto's lectures at the University of Lausanne in 1904. It has been argued that Mussolini's move away from socialism towards a form of "elitism" may be attributed to Pareto's ideas.[25] Franz Borkenau, a biographer, argued that Mussolini followed Pareto's policy ideas during the beginning of his tenure as prime minister.[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 judgement in anti-fascist circles.[14]