Vilfredo Pareto and the Birth of Modern Microeconomics

Vilfredo Pareto and the Birth of Modern Microeconomics

Luigino Bruni

There has been a recent resurgence of interest in the work of Vilfredo Pareto, one of the founders of modern economics. This book reconstructs the genesis and significance of Pareto’s theory of choice which is Pareto’s greatest contribution to economic science and which was used by John Hicks, amongst others, to develop microeconomics.

Chapter 1: The Intellectual Evolution of a Non-Economist: 1890–1900

Luigino Bruni

Subjects: economics and finance, economic psychology, history of economic thought


CHAPTER 1 13/3/02 8:48 am Page 1 1. The intellectual evolution of a non-economist: 1890-1900 Sometimes in the history of the progress of science, decades and even centuries do not count. However, at other times, single years or even months make a difference (Pantaleoni 1904, p. 523) This chapter aims to reconstruct some of the main features of the cultural atmosphere of the period when Pareto began to study pure economics. In particular, I shall focus on the debate regarding the ‘economic principle’ among some of the first Italian marginalist economists, a debate that was particularly important in understanding the nature and limits of the Paretian revolution in the theory of choice.1 1 EGOISM, HEDONISM AND THE METHODOLOGICAL ATTACKS OF THE HISTORICAL SCHOOL Pareto entered the arena of economic theory at the beginning of the 1890s, a period characterised by the attempts of neoclassical economics to react to the challenges of the German and European Historical School (Faucci 2000, p. 719). In particular, in the Italian context, the debate regarding the ‘economic principle’ was deeply linked to the methodological crisis caused by the attacks from the Historical School. No economist who wanted to discuss the basic principles of the discipline managed to do so without taking into account the issue regarding the economic principle. Is there a basic principle on which economic science is based? If so, what principle is it? The special attention paid to this issue was also due to the attention given to the relationship between...

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