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 2: Pareto and Vailati: A Forgotten Exchange on Choice and Action

Luigino Bruni

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


The influence of one doctrine on another makes itself felt not only in the points where they stand in agreement one with the other, but in their points of divergence as well. (Treatise, § 2142, footnote 1) In September 1896, Pareto met Giovanni Vailati and in December of that same year, Pareto had the first contacts with Benedetto Croce. Vailati and Croce were the leaders of the two principal though opposing schools of thought in Italy at the beginning of the twentieth century. Both philosophers had a different role in the development of Paretian methodology. The debate with Croce was hard and public, and it allowed both of them to clarify their methodological premises, which, over the years increased the distance between them. The relationship with Vailati took a different course. From the few letters found (too few, only two from Vailati), we have the impression that the exchange did not focus on broad methodological questions; we find only fleetingly the important questions Croce dealt with. However, in order to reconstruct this debate we must distinguish between what the authors said and what they truly did in their works. This is what I attempt to do in this chapter, where new elements useful to the reconstruction of Pareto’s theory of choice have emerged. 1 THE CRISIS OF ITALIAN POSITIVISM At about the end of the nineteenth century, positivism was, above all, the cultural atmosphere of the European scientific world. In spite of the differences between the various schools of thought, it...

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