Pareto, Economics and Society: The Mechanical Analogy

Pareto, Economics and Society: The Mechanical Analogy

Pareto, Economics and Society: The Mechanical Analogy

Pareto, Economics and Society: The Mechanical Analogy

Synopsis

Vilfredo Pareto was one of the great systems theorists of the twentieth century, embracing economics, psychology, sociology and politics. in this important work, Michael McLure takes as his subject of study the rapport between Pareto's economic and sociological theory, and consequently, illuminates the role of economics in public policy development.

Excerpt

One is tempted to feel sorry for Vilfredo Pareto—one of the great systems theorists of the twentieth century.

He is remembered by economists chiefly for his notion of optimality, centering on the exhaustion of gains from trade. Pareto optimality, as it is now universally called, embodied a particular, conservative approach to economic welfare, one in which change emerges only from exchange.

But the notion of Pareto optimality is only a small, indeed an infinitesimal, part of Pareto’s total system. His system embraces theories not only of economics but of psychology, sociology, and politics—all of which comprised his general sociology; theories of knowledge, psychology, and power; theories of elites and of the circulation of elites; theories of logical and non-logical conduct; and, inter alia, theories not only of gains from trade but of power and mutual manipulation, with knowledge and pseudo-knowledge among the instruments of power in the manipulation of psychic states. The notion of Pareto optimality hardly reflects what Pareto believed was actually going on in society, economy and polity—or, for that matter, in the minds of individual economic actors.

The neglect of his larger understanding and total system, however, is due, to no small degree, to Pareto himself. Pareto was one of a relative handful of economists who emphasised the combination of optimality and equilibrium as analytical tools. The twin foundational features of neoclassical economics thus are due in part to him: first, the picturing of the economy in terms of a pure abstract a-institutional conceptual model of ‘the market’; and second, the neoclassical research protocol calling for the production of unique, determinate, equilibrium, optimal results.

Still, given the broad compass of Pareto’s total system and the complexity of the multiplicity of elements that comprise that system, it is not surprising that his system can be interpreted, formulated and extended in different ways. In this respect, Pareto’s total system is akin to that of Adam Smith. Smith’s system includes the three domains of moral sentiments and rules, law and government, and market, and rests on diverse paradigmatic foundations: naturalism, supernaturalism, empiricism, utilitarianism, secularism, pragmatism, historicism, and more. Whereas the broad outlines of Smith’s . . .

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