Vilfredo Pareto

Pareto is also known for showing that the assumption that the utility of goods can actually be measured is not necessary to derive any of the standard results in consumer theory. Simply by being able to rank bundles of goods, consumers would act as economists had said they would.

In his later years Pareto shifted from economics to sociology in response to his own change in beliefs about how humans act. He came to believe that men act nonlogically, “but they make believe they are acting logically.”

Born in Paris to Italian exiles, Pareto moved to Italy to complete his education in mathematics and literature. After graduating from the Polytechnic Institute in Turin in 1869, he applied his prodigious mathematical abilities as an engineer for the railroads. Throughout his life Pareto was an active critic of the Italian government’s economic policies. He published pamphlets and articles denouncing protectionism and militarism, which he viewed as the two greatest enemies of liberty. Although he was keenly informed on economic policy and frequently debated it, Pareto did not study economics seriously until he was forty-two. In 1893 he succeeded his mentor, Leon Walras, as chair of economics at the University of Lausanne. His principal publications are Cours d’économie politique (1896–1897), Pareto’s first book, which he wrote at age forty-nine; and Manual of Political Economy (1906).

A self-described pacifist who disdained honors, Pareto was nominated in 1923 to a senate seat in Mussolini’s fledgling government but refused to become a ratified member. He died that year and was buried without fanfare in a small cemetery in Celigny.

About the Author

David R. Henderson is the editor of The Concise Encyclopedia of Economics. He is also an emeritus professor of economics with the Naval Postgraduate School and a research fellow with the Hoover Institution at Stanford University. He earned his Ph.D. in economics at UCLA.