- Elgar original reference
Edited by Richard Arena, Agnès Festré and Nathalie Lazaric
Chapter 2: What Vilfredo Pareto Brought to the Economics of Knowledge
2 What Vilfredo Pareto brought to the economics of knowledge Ludovic Ragni What economists generally remember about Vilfredo Pareto are his contributions to general equilibrium theory, his definition of optimality and the law that bears his name. Economists refer to Pareto much less as a sociologist. This can be seen as a deficiency to the extent that his sociology actually determines his contributions to the fields of pure and applied economics from a methodological point of view. Indeed, according to Pareto, economics must answer to the method of ‘successive approximations’. This consists in grasping economic phenomena first inductively, then deductively, so as to be able to offer a mathematically logical explanation, as is done in the experimental sciences. Then the explanation is completed by taking into account whatever the other social sciences have contributed, especially sociology. A synthesis of these differing approaches aims at producing an action theory that would help explain the way economic and social agents think. Pareto sets out to explain how the actors reason either from an individual point of view or from that of social group dynamics. The reach of his study of this problem can be seen in the theory of logical and non-logical actions developed by the author, especially in his Courses (1896–97), Manuale (1909) and Treatise (1916).1 Paretian theory can thus be seen as a reflection on the knowledge economy considered as a field of thought relating to the way agents think, treat, and acquire information and elaborate ways of...
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