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 3: The Methodological Dispute Between Pareto and Croce

Luigino Bruni

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


1 Experimental abstraction has nothing in common with metaphysical abstraction. (Pareto 1921 [1970], p. 26) This chapter aims to discover some of the aspects of Paretian methodology that is, the meaning of its empiricism and the method of analysis and synthesis - which can be compared to that of Benedetto Croce.2 But because of the complexity of the Paretian categories that emerge from the exchanges with Croce, the entire chapter will be devoted to this matter. Comparing the two different methodologies will allow us to study the Paretian method and epistemology. This is something which must be done in order to evaluate the limits, the purpose, the success or failure not only of the theory of choice, but of Pareto’s entire project on social science; and to try to understand what the unwritten pages, the missing books, ‘Pareto’s dream’ are. The exchanges with Croce began at the end of 1896, at about the same time as those with Vailati. They subsequently reached a climax on the occasion of the public debate of 1900-1901 in which the fundamental issues already confronted in the letters came to a head. In the second part of the chapter, we will stop to consider the development of the relationship between Pareto and Croce in the subsequent years. This analysis should make it easier to understand the other aspects of Paretian methodology which have so far been neglected by those who have tried to interpret it. 1 1.1 THE PREAMBLE: 1896-1899 The First Private Letters Benedetto...

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