Vilfredo Pareto

Vilfredo Pareto (1848–1923) was an Italian economist and sociologist who studied income distribution, social systems, and the circulation of elites.

Ordinal utility: A theory of preference that ranks choices without measuring satisfaction in absolute units. Pareto helped establish preference ranking as a foundation for economic analysis.
Residues and derivations: Pareto’s categories for persistent nonlogical sentiments and the explanations people construct to justify them. They form the central machinery of his sociology of belief and action.
Lausanne School: A tradition of mathematical economics associated with Léon Walras and the University of Lausanne. Pareto succeeded Walras at Lausanne and extended the school’s general-equilibrium work.
Vilfredo Pareto’s Manual of Political Economy: Pareto’s 1906 treatise presenting his mature mathematical economics and theory of economic choice. It set out the economic analysis later associated with his name.
Marxism: A political and economic tradition centered on class conflict, historical materialism, and critique of capitalism. Pareto rejected Marxist explanations that reduce social change to economic class conflict.
Pareto efficiency: A state in which no person can be made better off without making someone else worse off. This welfare criterion grew from Pareto’s analysis of economic allocation.
Nonlogical action: Action driven by sentiments or habits rather than a demonstrable logical connection between means and ends. Pareto used it to explain conduct that rationalist theories could not account for.
Léon Walras: A French economist who developed a mathematical theory of general equilibrium. Walras recruited Pareto as his successor in Lausanne and shaped his early economics.
Pareto principle: The heuristic that a large share of outcomes often comes from a small share of causes. It derives from Pareto’s observations of unequal distributions, though popular versions simplify them.
Rational choice theory: An approach that models action as the selection of means to achieve ranked preferences. Pareto’s emphasis on nonlogical action challenges rationalist accounts of social behavior.

Linked from 13 pages