Why is Paretos Law Linked to Pareto

Summary of Handbook of Political Economy

Fin de Siècle in Italy - between anarchy and fascism

As Paretos Manuals Released in 1906, the author had buried many of his earlier liberal ideals and belief in the constant advancement of mankind. His homeland Italy has been shaken by political and economic crises since national unification in 1861, anarchist attacks in the north and the Mafia and Camorra in the south undermined state authority. In France, where Pareto spent the first years of his life, radical workers' organizations gained influence in the 1890s. The first years of the 20th century were marked by power struggles between left and right. In the increasing propensity for violence of the working class across Europe, combined with the dwindling authority of the rulers, Pareto saw certain signs of a civilizational decline. Rising protectionism, nationalism and the influence of the welfare concept in economic policy convinced him that the ruling governments were incapable of economically sound action.

Emergence

Pareto's major economic work is a further development of the two-volume Cours d’économie politique (1896/97), which he wrote while he was a professor at the University of Lausanne. However, he distances himself in the foreword of Manuals clear from some earlier viewpoints, e.g. B. the unconditional belief in freedom. Despite this limitation, he remains in the Manuals his great role model Adam Smith loyal by repeatedly referring to his pioneering work in economics.

His friend and sponsor, the leading Italian economist at the time, also served as a role model Maffeo Pantaleoni. It was also Pantaleoni who met the Swiss economic theorist Léon Walras made known, whose chair at the University of Lausanne Pareto took over in 1893. Pareto was an avid supporter of the mathematical method developed by Walras, but alienated himself from his predecessor both personally and in matters of fact. Throughout his life he reacted extremely irritably to attempts to lump it together with Walras under the name of the "Lausanne School".

Impact history

During his lifetime, Vilfredo Pareto was denied the recognition that various authors gave him after his death. That may include due to his unusually snappy style. His biographer Georges H. Bousquet said: "Pareto's irony is occasionally exaggerated, which was detrimental to his scientific work, because all too often, when he polemics, he strikes a tone that is generally not to be found in scientific writings." Manuals di Economia Politica There is still no German translation, and the English was only published in 1971.

The fact that Benito Mussolini describing himself as Pareto's pupil may not have been particularly conducive to widespread acceptance. An Italian magazine even called him the "Karl Marx of Fascism". In his defense, however, it should be mentioned that Pareto did not think too much of fascism itself. After Mussolini came to power in 1922, he welcomed his measures to restore order. After Mussolini had overthrown the government in Rome, Pareto is said to have mumbled triumphantly on his deathbed: “I said so.” But when the fascists wanted to ban freedom of expression in universities, shortly before his death in 1923, he wrote an appeal for protest. The paradox of his work lies in the fact that, as a declared enemy of ideological delusions, he has contributed significantly to the emergence of a cruel and destructive ideology.

Pareto's achievements in economics are undisputed. The neoclassic is considered to be one of the founders of modern theories of prices and resource allocation as well as a forerunner of modern econometrics. His approach to equilibrium theory was revived in the 1930s and has not lost its influence since then.