Vilfredo Pareto, a renowned Italian economist and sociologist, was born on July 15, 1848, in Paris, France. His father, Raphael Pareto, was a devout follower of Mazzini, and had been exiled from Genoa in 1836 for his political affiliations. He settled in France and Vilfredo began his early education in Paris. Ten years later, in 1858, his father received an amnesty and the family shifted back to Italy where he continued his secondary studies in mathematics and literature. In 1869, at the age of 21, Pareto completed his engineering studies at the Polytechnic Institute in Turin.
In 1870, he began his career as an engineer and later, he also served as a director of two Italian railways. He began exerting his mathematical prowess and his abilities as an engineer on the improvement of the rail road system. Pareto was deeply discontented with the Italian government, and he expressed his disapproval of its economic policies by publishing pamphlets and articles denouncing protectionism and militarism. Although he was well informed and well read on economics, he did not pursue it academically until the age of forty-two.
His encounter with Pantaleoni influenced him to study his Pure Economics, and he engaged himself with devouring the works of other economists, particularly Walras, whose theory of general economic theory greatly impressed him. In 1891, he arranged a meeting with Walras, who happened to be very pleased to have found an engrossed and attentive follower of his work. Walras named Pareto his successor and upon the age of 45, Pareto succeeded Walras on his death. Thus, began his influential scientific career, where he went on to make numerous ground-breaking researches and publishing a number of books including theCours d’économie politique, the Systemès socialistes, the Manuale di economia politica, and the Trattato di sociologia generate. His books were translated in other languages, particularly French.
At the age of 50, Vilfredo Pareto took up a liberal approach to political economy, and began advocating democracy, liberty, free trade, and humanitarianism as the only measures to rid of the plight of militarism, protection, and religion. His breakthrough in the fields of sociology and political economics can be owed to his exceptional mathematical prowess, his understanding of economics and his training as an engineer. Pareto was pioneering economist to have applied mathematical tools to economic analysis. He proved his affective economic theories by applying them to a normal life scenario and rationalizing it through a sociological context. Pareto influenced the development of the “behavioralist” school of economic thought through his theory that humans are not only motivated by logic and rationality alone, their decisions are also influenced by emotional factors.
Pareto has made various valuable contributions to the field of economics, such as a study of national income distribution and tools to analyse individual choices. Among his revolutionizing theories is the 80-20 rule, which was later expanded by Joseph M. Juran who referred to it as the ‘Pareto Principle’.
Vilfredo Pareto’s basic literary work is available in three publications, the two-volume Cours, the Manuel and the article “Économie mathematique” in the Encyclopédie des sciences mathématiques.