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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.
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Chapter 4: Guidelines for Paretian Methodology

Luigino Bruni


Disputes about the ‘method’ of political economy are useless. (Manual, I, § 35) In the previous pages, we have seen that despite the fact that Pareto always criticised and disdained discussions on method, he engaged in important exchanges with Giovanni Vailati and Benedetto Croce. These exchanges provided the basis for his major works of the 1900s and in some cases clarified even further his concepts. In this chapter, we will return to the main issues that emerged from these exchanges in order to provide a more comprehensive picture of Pareto’s methodological views. 1 1.1 PARETO NAIVE POSITIVIST? The Problem of Induction The dissent between Pareto and Croce regarding premises is of great importance in the reconstruction of Paretian methodology, because it touches upon one of the most penetrating criticisms of Pareto. His ‘experimental’ position has, in fact, been considered naive by many,1 because he placed ‘the theories by Plato, Aristotle, Machiavelli and any newspaper clippings on the same level’ (Einaudi 1950, p. 8), inasmuch as they all belonged to the same category of ‘facts’. However, Pareto was obviously a positivist, if by this expression we mean ‘the view that positive science constitutes man’s sole possible significant cognitive relation to external reality’ (Parsons 1968, p. 61). That he was a naive positivist is less obvious, if a scholar of the calibre of Talcott Parsons, who made one of the most profound analyses of the Paretian method, placed Pareto among those who attempted to reform nineteenth-century positivism, an author of a ‘much...

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