Vilfredo Pareto

Vilfredo Pareto was a prominent Italian economist and sociologist who made significant contributions to the study of income distribution, social choice, public finance, and elite theory. He is best known for his concept of Pareto efficiency, which states that a situation is optimal if no one can be made better off without making someone else worse off, and for his observation that 80% of the effects come from 20% of the causes, which is known as the Pareto principle or the 80,20 rule. Pareto also developed a theory of the circulation of elites, which argued that every society is ruled by a minority of leaders who inevitably become corrupt and decadent over time, and are replaced by a new elite from the masses. Pareto was born in Paris in 1848, where his father, an Italian engineer and nobleman, had fled after participating in the nationalist movement led by Giuseppe Mazzini. His mother was a French woman. He moved to Italy with his family in 1858, and studied mathematics and engineering at the Polytechnic University of Turin. He graduated in 1869 with a dissertation on equilibrium in solid bodies. He then worked as a civil engineer for the Italian Railway Company and later in private industry. He also became interested in politics and economics, and joined the classical liberal movement that advocated free trade, limited government, and individual rights. In 1893, Pareto was appointed as a professor of political economy at the University of Lausanne in Switzerland, where he succeeded his mentor Leon Walras, the founder of the Lausanne School of economics. There he developed his mathematical approach to economic analysis, which applied the methods of physics and mechanics to human behavior and social phenomena. He published his magnum opus, Manual of Political Economy, in 1906, which presented his theory of general equilibrium, utility, welfare, and income distribution. He also introduced the concept of Pareto optimality and the Pareto index, which measured the degree of inequality in a society. Pareto's interest in sociology grew as he became disillusioned with economics and politics. He believed that human actions were not driven by rationality or logic, but by irrational sentiments and instincts. He also observed that history was a cycle of rise and fall of different elites, who manipulated the masses with ideological illusions. He expressed his sociological views in his four-volume work, The Mind and Society, published between 1916 and 1917, which was a comprehensive treatise on general sociology that covered topics such as logic, psychology, history, religion, morality, law, and economics. Pareto's personal life was marked by two marriages and several affairs. His first wife was Alessandrina Bakunin, the daughter of the Russian anarchist Mikhail Bakunin. They married in 1873 but separated in 1881 due to her mental illness. She died in 1888. His second wife was Jeanne Régis, a French woman whom he married in 1892. She was supportive of his academic career and helped him with his research and publications. She died in 1923, shortly before him. Pareto also had several mistresses throughout his life, some of whom lived with him and his wife. Pareto died of heart failure on August 19, 1923, at his villa near Geneva. He was buried at the new cemetery of Céligny. He left behind a legacy of original and influential ideas that have inspired many economists and sociologists, such as Joseph Schumpeter, Amartya Sen, James Buchanan, Gaetano Mosca, Robert Michels, and Raymond Aron. He is widely regarded as one of the founders of modern economics and sociology, and one of the greatest social scientists of all time.