Vilfredo Pareto: An Intellectual Biography Volume I

Nowadays, for economists, as well as for the majority of historians of economic thought, the name Vilfredo Pareto evokes only the notion of the Paretian optimum and, conceivably, his law on the distribution of income. Such a condensation, while not completely off the mark, is decidedly uncharitable with regard to one of the last scholars who attempted, in the typically nineteenth-century manner, to examine social phenomena from differing economic, sociological and political standpoints. As Pareto did not spend all his life as an academic, we subscribe to the view that to gain an understanding of his complex scientific output requires not only a patient and detailed exegesis of this output itself but also its meticulous contextualisation within the framework of the subject’s intellectual biography.

In the first section of this chapter, drawing on complete documentation brought together for the first time, the eventful and formative period of Raffaele Pareto’s experiences in civilian and military life will be reconstructed in detail, including his participation in the 1833 Sardinian army revolt and the harsh repressive measures which ensued, leading him to take refuge in exile in France. During the 20-year period spent across the Alps, Raffaele started his own family and applied the mathematical and engineering knowledge he had acquired during his studies.

This chapter consists of an original and documented study of Pareto’s scholastic and university education. Drawing on what little direct documentation we possess, as well as on the copious legislation of the time, the first two sections will be devoted to a detailed reconstruction of the curriculum he followed at the Technical Institute in Casale Monferrato and thereafter in Turin at the faculty of mathematics and at the school of specialisation for engineers. In order to contribute further to the elucidation of this hitherto fairly obscure period in Pareto’s intellectual biography, which (with the exception of the now-complete list of his exam results) certainly warrants further investigation, brief biographies are provided of many of his university and also his school teachers. In Sect. 3.3, a broad description is given, based on unpublished documentation, of two of the courses he followed: calculus and theoretical mechanics. As a result, we finally gain a clearer picture regarding the two logical tools most used by Pareto in his later scientific career, that is, calculus and the concept of equilibrium. Section 3.4 consists of a description of Pareto’s scientific and mathematical patrimony at the conclusion of the decade dedicated to studies under the guidance of his father. This aspect of Pareto’s intellectual biography has hitherto been largely neglected but is clearly indispensable to achieving a better understanding of his later scientific work, with its overarching reference to the concept of equilibrium, characterised by an extensive but not fanatical application of mathematical analysis. Further examination on the part of historians of mathematics in relation to Pareto’s exposure to these two disciplines could lead to a welcome addition to our understanding of this interesting youthful span of his intellectual biography.

The most familiar facet of Pareto’s biography prior to his period in Lausanne is the 20 years he spent at the helm of a major metallurgical group in Tuscany, one of the most important entities in the nascent Italian iron industry. Hence, after a brief description, in Sect. 4.1 of the chapter, of his short-lived and turbulent involvement with a railway company, in Sect. 4.2 a detailed reconstruction is provided of the intense eight-year period he spent in the management of the ironworks at San Giovanni Valdarno. Among the aspects examined will be his stance of constructive criticism with regard to the fundamentals of corporate finance, his attempts to resuscitate the business through technological modernisation and through the implementation of an aggressive commercial strategy, and his complex but caring relations with the workforce, which amply account for the disenchantment he later demonstrated towards humanitarian ideas.

This chapter will deal with Pareto’s wide-ranging intellectual interests during the Tuscan period, characterised by his early adoption of a liberal ideological outlook. The first section will examine the political liberalism of the young Pareto, with its clear orientation towards the ideas of John Stuart Mill, including his brief but intense alliance with political activism in favour of legislation on proportional representation, of freedom of religion (Sect. 5.2) and of the emancipation of women (Sect. 5.3). This is followed in Sect. 5.4 by an initial overview of Pareto’s early economic liberalism, which he recognised as ideological in character notwithstanding the clear evidence of the disastrous consequences of state intervention in the economy revealed by economic history. Lastly, in Sects. 5.5, 5.6, and 5.7 we highlight his ongoing interest in methodological questions which can be traced back to his university years, where his wholesale endorsement of John Stuart Mill’s positivistic approach was complemented by ideas borrowed from the Franco-Belgian economist and advocate of free trade Gustave de Molinari, with whom Pareto maintained close ties, also of friendship, between the late 1880s and the mid-1890s.

This chapter addresses another aspect of Pareto’s intellectual development in the years preceding Lausanne which has hitherto been dealt with only in a superficial and anecdotal manner, that is, his political activism. We begin in Sect. 6.1 with a broad and fully documented account of the electoral campaign culminating in Pareto’s ill-fated candidacy in the elections of October 1882. This defeat, while initially accepted stoically by Pareto, led him to avoid any repetition of the experience and undoubtedly contributed to the profound aversion for politicians which deeply underlay his later thoughts on political events. This is followed by accounts of his experiences with the municipal council of San Giovanni Valdarno (Sect. 6.2), of his antipathy towards Italian colonialist ventures (Sect 6.3) and of his progressive but short-lived enthusiasm for the Italian radical party (Sect. 6.4) after a decade of loyalty to the conservative liberalism of Florentine political circles.

This chapter deals with the amateur but often incisive newspaper and review articles he produced in the 20 years leading up to his departure for Lausanne, often in response to current political debates which he followed with lively interest. Thus, in Sect. 7.1, we examine his response, emerging from his professional experience as well as from his ideological outlook, to the government’s proposal in the mid-1870s to nationalise the railways. Pareto was not in favour of bureaucratic management of the lines, making use of arguments which he raised into a kind of generalised theory regarding the business incapacity of the state (Sect. 7.2). Thereafter we pass on to an account of his economic analysis of measures proposed in the 1880s in support of the working population (Sect. 7.3), together with a summary of his thoughts at the time regarding taxation and public expenditure (Sect. 7.4) and birth control (Sect. 7.5), Malthusianism remaining an ideological position he retained throughout his life. The conceptual principles underlying his opposition to the policy of customs protectionism adopted by Italy in 1887 (Sect. 7.6), together with Italy’s abolition of the fiat money in 1883 (Sect. 7.7), will then be explored. Lastly, a systematic summary is given of his early, rudimentary reflections on socialism, on economic theory, on sociology and on political science (Sects. 7.8, 7.9, 7.10 and 7.11, respectively).