Vilfredo Pareto

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 Vilfredo Pareto
Beyond Disciplinary Boundaries

Edited by
Joseph V. Femia
University of Liverpool, UK
and
Alasdair J. Marshall
University of Southampton, UK
© Joseph V. Femia and Alasdair J. Marshall 2012

All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise without the prior permission of the publisher.

Joseph V. Femia and Alasdair J. Marshall have asserted their right under the Copyright,
Designs and Patents Act, 1988, to be identified as the editors of this work.

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British Library Cataloguing in Publication Data

Vilfredo Pareto : beyond disciplinary boundaries.
1. Pareto, Vilfredo, 1848-1923. 2. Social sciences--
Philosophy.
I. Femia, Joseph V. II. Marshall, Alasdair J. (Alasdair
James), 1968-
300.9'2-dc22

Library of Congress Cataloging-in-Publication Data

Femia, Joseph V.
Vilfredo Pareto : beyond disciplinary boundaries / by Joseph V. Femia and
Alasdair J. Marshall.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-7546-7995-0 (hbk) -- ISBN 978-0-7546-9977-4 (ebk)
1. Pareto, Vilfredo, 1848-1923. 2.
Economics--Italy--History--19th century. 3. Social
sciences--Italy--History--19th century. I. Marshall, Alasdair J. (Alasdair
James), 1968- II. Title.
HB109.P3F46 2011
330.092--dc23
2011030809

ISBN 9780754679950 (hbk)

ISBN 9780754699774 (ebk)
IV

Printed and bound in Great Britain by

TJ International Ltd, Padstow, Cornwall.
 Contents

List of Figures    vii

List of Contributors   ix

Introduction   1
Joseph V. Femia and Alasdair J. Marshall

1 Pareto and the Elite   9

John Scott

2 Talents and Obstacles:

Pareto’s Morphological Schema and Contemporary Social
Stratification Research   21
François Nielsen

3 The Role of Sticking Points in Pareto’s Theory of Social Systems   47

Charles Powers

4 Pareto, Machiavelli, and the Critique of Ideal Political Theory   73

Joseph V. Femia

5 The Idea of a Sociology of Risk and Uncertainty:

Insight from Pareto   85
Alasdair J. Marshall and Marco Guidi

6 Pareto’s Theory of Elite Cycles:

A Reconsideration and Application    111
John Higley and Jan Pakulski

7 Pareto, Mill and the Cognitive Explanation of Collective Beliefs:

Unnoticed “Middle-Range Theories” in the Trattato   131
Alban Bouvier

8 Pareto’s Rhetoric   153

Giorgio Baruchello
vi Vilfredo Pareto

9 Pareto’s Manuscript on Money and the Real Economy    177

Michael McLure

Index   199
 List of Figures

2.1 Distribution of income   24

2.2 Pareto’s comparison of social mobility processes across strata
within a society, and across different types of societies   28
2.3 Four concepts of the interaction of genes with environmental
resources in socio-economic success   39
This page has been left blank intentionally
 List of Contributors

Giorgio Baruchello was born in Genoa, Italy, but is an Icelandic citizen and serves
as Professor of Philosophy at the Faculty of Humanities and Social Sciences of
the University of Akureyri, Iceland. He read philosophy in Genoa and Reykjavík,
Iceland, and holds a PhD in philosophy from the University of Guelph, Canada.
His publications encompass several different areas, especially social philosophy,
theory of value, philosophy of science and the history of philosophy. Since 2005
he has edited Nordicum-Mediterraneum, the first Icelandic scholarly journal in
Nordic and Mediterranean studies.

Alban Bouvier works mainly in the philosophy of social science and theoretical
sociology. Initially an Associate Professor at the Sorbonne, Paris, he is currently a
full Professor at the University of Provence in Aix-en-Provence. He is also Senior
Fellow at the Institut Jean Nicod (Cognitive and Social Sciences) and the Ecole
Normale Supérieure (ENS), Paris. Professor Bouvier has also taught at the London
School of Economics, the University of California at Santa Cruz, the LUISS
(Roma) and the University of Lausanne. He is author of Pareto Aujourd’hui (1999,
Presses Universitaires de France) and has written a substantial number of articles
entirely or greatly devoted to Pareto’s thought.

Joseph V. Femia is Emeritus Professor of Political Theory at the University

of Liverpool. He has published several books, including Against the Masses:
Varieties of Anti-Democratic Thought since the French Revolution (2001, Oxford
University Press), Machiavelli Revisited (2004, University of Wales Press), and
Pareto and Political Theory (2006, Routledge). He has also published many
academic articles, in journals such as Political Theory, Political Studies, and
The British Journal of Political Science. He has been a Visiting Fellow at Yale
and Princeton Universities, and a Visiting Professor at the European University
Institute in Florence.

Marco G.D. Guidi is Assistant Professor at the University of Glasgow. He has

previously taught at Glasgow Caledonian University and at the Graduate Business
School within the University of Strathclyde. His scholarly publications include
two that deal with Pareto: ‘Successfully reshaping the ownership relationship
by reducing “moral debt” and justly distributing residual claims: The cases from
Scott Bader Commonwealth and the John Lewis Partnership’ (2010, Critical
Perspectives on Accounting) and ‘Maximizing the firm’s value to society through
x Vilfredo Pareto

ethical business decisions: Incorporating “moral debt” claims’ (2008, Critical

Perspectives on Accounting).

John Higley is Professor of Government and Sociology at the University of

Texas at Austin, where he holds the Jack S. Blanton Chair in Australian Studies.
Since 2001, he has been chair of the International Political Science Association’s
Research Committee on Political Elites. He has published many books and articles
dealing with classical elite theory, neo-elitism and the comparative study of
political elites and regimes. Most recently he has edited Democratic Elitism: New
Theoretical and Comparative Perspectives (2010, Brill) along with Heinrich Best.

Michael McLure is Professor of Economics at the University of Western Australia.

He is co-editor of the History of Economics Review and the author of Pareto,
Economics and Society (2001, Routledge) and The Paretian School and Italian
Fiscal Sociology (2007, Palgrave Macmillan). His research on the contributions
of Pareto and his followers has been published in: Australian Economic Papers,
the Cambridge Journal of Economics, the European Journal of the History of
Economic Thought, the Journal of the History of Economic Thought, Pensiero
Economico Italiano and the Rivista Internazionale di Scienze Economiche e
Commerciali. He also co-edited Vilfredo Pareto: Critical Assessments (1999,
Routledge) with John C. Wood.

Alasdair J. Marshall received his PhD on Pareto’s Sociology from Glasgow

University in 2000. He has worked as a researcher at the Cullen Centre for Risk
and Governance at Glasgow Caledonian University and is currently a lecturer
in the School of Management at the University of Southampton, England. He is
the author of Vilfredo Pareto’s Sociology: A Framework for Political Psychology
(2007, Ashgate) and his main research interests lie in the study of risk and
uncertainty, from philosophical, sociological and managerial perspectives.

François Nielsen received a BA in Sociology at Université Libre de Bruxelles

(1972) and a PhD at Stanford University (1978). He has been on the faculty at
McGill University and the University of Chicago and is currently a Professor of
Sociology at the University of North Carolina at Chapel Hill and editor of the
journal Social Forces. His research and teaching centre on social stratification and
mobility, behaviour genetics, sociobiology, sociocultural evolution, quantitative
methodology, and the work of Vilfredo Pareto. He has published articles in many
journals, including the American Journal of Sociology, the American Sociological
Review, the European Sociological Review, Social Forces and Sociological
Theory.

Jan Pakulski is Professor of Sociology at the University of Tasmania, Fellow

of the Academy of the Social Sciences in Australia and Fellow of the Center for
the Study of Poverty and Inequality at Stanford University. His current research
 List of Contributors xi

interests focus on elites, democratization, post-communism and social inequality.

Professor Pakulski was co-editor of Postcommunist Elites and Democracy in
Eastern Europe (2008, Macmillan) and has recently co-authored book chapters on
leader democracy and elite degeneration with Professor John Higley.

Charles Powers is a Professor of Sociology at Santa Clara University, in

California’s ‘Silicon Valley’. He has written widely in the area of sociological
theory, including Making Sense of Social Theory: A Practical Introduction (2010,
Rowman and Littlefield). Professor Powers has also written on organizational
innovation. Along with Jerald Hage he co-authored Post-Industrial Lives: Roles
and Relationships in the 21st Century (1992, Sage). His contributions to Pareto
scholarship include Vilfredo Pareto (1987, Sage). He also edited and introduced
the English language version of Pareto’s The Transformation of Democracy (1984,
Transaction Press).

John Scott is Professor of Sociology and Pro Vice-Chancellor for Research at

the University of Plymouth and has previously been Professor at the University
of Essex and the University of Leicester. He has published extensively on social
theory and on economic and political sociology, concentrating on the study of
elites and power. Professor’s Scott’s many publications include Conceptualising
the Social World: Principles of Social Analysis (2011, Cambridge University
Press) and Who Rules Britain (1991, Polity Press).
This page has been left blank intentionally
 Introduction
Joseph V. Femia and Alasdair J. Marshall

This volume explores Pareto’s astonishingly varied intellectual contribution from a

range of disciplinary perspectives, the main intention being to show why it remains
relevant and should not simply be consigned to the history of ideas. Pareto was
an almost obsessive polymath, whose refusal to recognise disciplinary boundaries
has few parallels. It might even be ventured that he deserves the categorisation of
universal genius, commonly reserved for such as Leonardo da Vinci, owing to the
sheer breadth and diversity of his talent and enduring insight.
And yet Pareto did not embody the ideal to which renaissance humanism
aspired. In that cultural movement, which began in Italy during the fourteenth
century, the new man was expected to immerse himself in the universal education
offered within Europe’s newly proliferating universities, and to then flourish across
multiple walks of life. For Pareto, this humanist teleology was reversed. His pattern
is one of varied worldly experience in the first half of his life, leading, eventually,
to an academic career that aspired towards universal social scientific knowledge,
but which saw him become increasingly disillusioned with and remote from the
world. Especially in his later sociological works, Pareto evinced a negative view
of human nature, one that bordered on misanthropy. This is why he is routinely
associated with Machiavellian realism. We find this realism expressed both in his
formal methodological position of scientific indifference towards the nineteenth
century faith in human progress, and in the historical pessimism which shapes his
account of social change. If realism entails a suspicion of theoretical abstraction,
then we can also see it at work in his critique of reductionist explanation. When
analysing society, Pareto emphasised complex interdependency, treating each
social form as a state of dynamic equilibrium where economic, political and social
phenomena interact.
This idea of complex interaction necessarily sets us thinking across disciplinary
boundaries. But Pareto’s initial academic contribution was in the narrow field of
mathematical economics. By the first decade of the century, he concluded that
formal economic theories were too detached from the realities of individual and
institutional behaviour to be of much use in explaining social life. The stage was
set for his subsequent abandonment of disciplinary specialisation. It would be
useful to relate, albeit briefly, this shift in perspective to the formative events and
experiences of his fascinating life story. Pareto was born in Paris in 1848, to a
French mother and an aristocratic Italian father. His determination to extend the
scientific method to the study of society can be traced back to his student days
at the Polytechnic Institute in Turin, where he took a degree in mathematics and
2 Vilfredo Pareto

engineering in 1869. Two years later he became a consulting civil engineer within
the government railway department set up in Rome to run Italy’s newly nationalised
railroads. Soon after that he became General Superintendent of three iron mines
in the Arno Valley that were owned by the Banca Nazionale of Florence. This
professional experience coincided with a tumultuous period in Italy’s economic
and political history. The most important phase of Italian unification began just
months after Pareto graduated. In 1870, the outbreak of the Franco-Prussian war
led Emperor Napoleon III to recall his Roman garrison. Italian forces then seized
Rome from Papal troops and established it as capital for the Italian Kingdom,
constituted just nine years earlier from the old Sardinian monarchy. This was the
Rome Pareto entered as a young graduate. Italy’s new kingdom would change
rapidly throughout the long ‘liberal’ period that took it up to the First World War.
First came the nationalisation programmes of the 1870s that gave Pareto his first
graduate opportunity on the railways. Then, from the late 1880s onwards, came
the colonial military expansions that would set Pareto thinking of the relationship
between economic growth, government protectionism, war and conquest. Pareto,
like many other Italians steeped in the progressive hopes of the Risorgimento,
became increasingly disenchanted by government favouritism and corruption.
Italian liberalism, he felt, blended two of the greatest threats to liberty: protectionism
and military expansionism. He contrasted it unfavourably with the laissez faire
‘Manchester School’ brand of liberalism that preached ‘world peace through free
trade’. Pareto understood English liberalism well because it inspired him during
his business travels around the UK. He became a prolific free marketeer, a member
of the Adam Smith Society in Florence, and, in 1881, a parliamentary candidate.
Over the course of that decade, Pareto emerged as a controversial public figure.
He produced what would eventually amount to hundreds of political and economic
pamphlets calling for free trade, pacifism, level competitive ‘playing fields’ and
small government. His efforts did not bear much fruit, and his youthful idealism
soon gave way to scepticism, even cynicism, about human potential.
It was the older Pareto who then turned to academia. During the early 1890s he
put his mathematical expertise to good use by writing a number of papers which
pioneered the application of mathematical techniques to economic questions. This
won him the respect of economists and in 1891 he was introduced by the economist
Maffeo Pantaleoni to Leon Walras, formerly an engineering student, like Pareto,
and now Professor of Economics at Lausanne University. Walras nominated
Pareto to become his successor in 1893, and he went on to occupy this chair until
1900. In 1898, Pareto gained financial autonomy thanks to an inheritance from a
rich uncle, which finally set him free to indulge his passion to make theoretical
sense of the social world. By this time, he was already in his fifties and becoming
something of a recluse. Perhaps his most influential economics text, the Manual
of Political Economy, was published in 1906. However, he began to develop his
‘general sociology’ a few years earlier, and his determination to construct a science
of society, on the model of physics and chemistry, consumed most of his energies
until his death in 1923.
 Introduction 3

In the (1901) Rise and Fall of Elites, Machiavelli’s ideas helped Pareto give
some systematic expression to his disillusionment with human nature and its effect
on political life. Here Pareto set the rigid psychological and behavioural patterns
of Machiavelli’s ‘lions’ and ‘foxes’ within a theory of political sociology which
argued that survival prospects for political elites hinge upon the extent to which
each pattern is represented and given free reign. Here we are told, for example,
that vulpine elites which display their hallmark combination of ‘effeteness’ and
‘rapacity’ can easily fall prey to violent, though idealistic, leonine elites. Pareto
went on to incorporate this theory into a much broader macrosociology given
fullest expression in the immense four volume Treatise on General Sociology, first
published in 1916 (but not in English until 1935). In that work, the psychological
rigidities of Machiavelli’s lions and foxes provided Pareto with a starting point
for a much more ambitious theory. Their chief sociological significance was now
to determine the extent to which both political and economic elites (mal)adapt
to their economic, political and social environments. Pareto believed that his
emphasis on the interdependence of the different elements of social life would
expose the limitations of Marx’s economic reductionism. However, the twentieth
century – the century of democracy and the rise of the ‘common man’ – turned
out to have little taste for his historical pessimism, which dictated a cyclical rather
than a progressive pattern in human events.
Ironically, for a thinker whose own intellectual horizons were constantly
expanding, Pareto’s sociological project led him to stand the renaissance humanist
faith in the limitless capacity for human development on its head. By the time of the
Treatise, Machiavelli’s grip had tightened. It was human rigidity and inflexibility,
not plasticity or self-creation, that fascinated Pareto most. The world, it now
seemed, cannot be fundamentally changed precisely because it is a human world.
Its movement from one social form to another constitutes some ‘change’, certainly,
yet variability between social forms is limited because human nature allows only
very limited variability in the personality structures that it can accommodate. In
Pareto’s sociological imagination there was to be no limitless progress, no faith
in the power of reason to salvage antisocial human nature, only repetition of the
age-old human drama that places the higher order goals of wealth and the pursuit
of power above all else, and which regards the fortunes of all who would have
these things as dependent on talents and strategic preferences bestowed by nature.
Pareto’s thoughts on how human nature limits human development were
described by Joseph Schumpeter in his (1951) Ten Great Economists as
divided between separate morphological and psychosocial schemas. Pareto’s
morphological schema was concerned with patterns of social stratification and
mobility explained by uneven social distributions of talent, and by the relative
‘openness’ and ‘closure’ of elites to influxes of talent from below. This belief in
natural inequality was reinforced by statistical research leading to Pareto’s famous
80–20 law of income distribution, which had been published as early as the (1896)
Course in Political Economics. According to this law, in every society, 80 per cent
of income is distributed amongst 20 per cent of the population. For Pareto, this
4 Vilfredo Pareto

patterned diversity suggested patterned natural inequality, with respect to both the
talents that underlie wealth creation, and the talents that underlie the spoliation of
wealth created by others. Pareto’s psychosocial schema also dealt with the notion
that universal human nature breeds phenotypical diversity. Pareto, as we have
seen, explicitly endorsed Machiavelli’s representation of human nature as flawed
by rigidities of personality which the Florentine had famously attributed to his
‘lion’ and ‘fox’ political types. This makes both men appear almost Swiftean in
their attitude towards human spirit; or more accurately, towards the animal spirits
that together give human spirit the character of a bestiary. Perhaps because of
its Machiavellian origins, this personality typology was, and probably remains,
deeply engrained in the Italian political psyche. Pareto was, to this extent at least,
in tune with the national spirit. At the heart of his reflections on politics we find the
idea that every leader is either selfish and manipulative, like Machiavelli’s fox, or
forceful and ideologically zealous, like Machiavelli’s lion.
In the Treatise, these psychological rigidities became Pareto’s primary
sociological variables. As the historical cycle runs through its ‘individualised
phases’ where economies flourish, polities decentralise and social attitudes
liberalise, the attributes of Machiavelli’s ‘foxes’ become dominant within the elite.
As the historical cycle turns through its ‘crystallised’ phases, where economies
contract, polities centralise and social attitudes grow conservative, the attributes
of Machiavelli’s ‘lions’ come to prevail. Long before Pareto (and Machiavelli),
Plato and Aristotle had proposed an immanent relationship between political
form and moral character. However, for Pareto, it was not virtue and morality
but broad personality structures and their cultural expressions that mattered. His
whole sociological enterprise seems to assume that human nature has evolved
a capacity to create personality structures with at least some adaptive fit to the
times. Then again, we need to recall that for Pareto, these structures produce rigid
outlooks and behaviours that make their hosts, be they individual decision-makers
or whole elites, hostages to fortune. Even ‘open elites’, which best permit elite
psychological and cultural patterns to shift with the times, cannot overcome this
problem. For Pareto, there seems to be no such thing as an elite that becomes
resilient to changing times through flexibility. Rather, there are only ever highly
inflexible psychological and cultural attitudes from which decisions are taken,
which are always situated somewhere along Machiavelli’s vulpine-leonine
continuum, and which change only with the passing of decades.
Taken together, Pareto’s morphological and psychosocial schemas mark him
out as an inheritor of Machiavelli’s ‘realist’ concern to take people as they really
are, and not as we would wish them to be. This standpoint helps to explain why
Pareto refused to be bound by the particular frames of reference that dominate
each academic discipline. His resistance to academic insularity initially manifested
itself in his disillusionment with formal economic theory, dependent as it was
on the model of a calculating homo economicus, which, he concluded, was too
divorced from normal human behaviour to illuminate economic phenomena on
its own. And so he turned his attention to the irrational side of human behaviour,
 Introduction 5

then being explored by the discipline of psychology. Economists, he concluded,

were being blinded by the image of man as a rational actor. But the disciplines of
economics and psychology both tended to focus on the individual human agent
– his choices, his tastes, his desires, his hidden motivations. Without denying the
role of the individual, Pareto sought to acknowledge, through his equilibrium
theory, the power of ‘social facts’ or social forces as moulders of individual
action. The methodological individualism of the psychologists and the economists
had to be complemented by the ‘holism’ favoured by sociologists. However,
sociology, as a discipline, was essentially antipathetic to the study of politics, as
the latter highlighted the creative potential of political leadership and ideas, which
sociologists typically reduce to underlying social pressures. Pareto, on the other
hand, thought that different styles of leadership, different mind-sets, were crucial
to our understanding of history and social life. Society wasn’t simply a mechanical
system, a nexus of determined and predictable patterns of behaviour. Yet he poured
scorn on the tendency of political scientists and theorists to elevate ‘reason’ as the
driving force of society, and to devise abstract schemes for social improvement.
Their ‘default’ frame of reference ignored the vagaries of human psychology, as
well as the intractable nature of social and economic structures.
Pareto’s contempt for disciplinary boundaries was obviously a source of
creativity, and allowed him to present a more accurate description of reality than
would otherwise have been possible. ‘Completeness’, observing a phenomenon
from different angles so as to offer a complete representation, is a regulative ideal
in scientific inquiry, and one that guided his quest for multiple perspectives. Yet
his interdisciplinary approach can also be seen as a source of confusion, which
accounts for some of the apparent inconsistencies in his thought. For example, how
can someone who wants to explain human history in terms of personality-types
advance a theory of social equilibrium that prompts observers to interpret him as a
structural-functionalist? And how can someone who insists on the irrationality of
human behaviour presume to study society through the use of techniques imported
from the natural sciences?
These problems are not easily solved. Pareto’s effort to create a macrosociology
that emphasises both socio-cultural and psychological variables, from the
standpoint of what is presented to us as a rigorous scientific methodology that
makes no a priori assumptions about its subject matter, was bound to be fraught
with methodological difficulties. Yet the basic research question that sent Pareto
down his interdisciplinary path is central to our collective self-understanding.
How does social reality interact with the givens of human psychology? All of
the concepts Pareto used to answer this question – social equilibrium, residues
and derivations, the ‘logico-experimental’ method, the cyclical view of history
– are worthy of inclusion in the ‘toolkit’ of modern social science. Perhaps he
was less than consistent, but the methodological safety of adhering to disciplinary
boundaries is sometimes purchased at the price of substantive irrelevance.
It is our hope that the various contributions to this volume manage to convey
the range and fecundity of Pareto’s legacy. In the first chapter, John Scott sets the
6 Vilfredo Pareto

scene with some conceptual clarifications. He addresses fundamental questions

which the reader who is new to Pareto might well ask: How does Pareto identify
‘elites’? What does it mean to say they act ‘non-logically’? Why might the relative
proportions of ‘lions’ and ‘foxes’ within elites vary as general social conditions
change? Scott concludes that a reconsideration of Pareto’s work on elites,
especially given the contemporary resurgence of interest in elite theory, is long
overdue. In Chapter 2, François Nielsen looks in detail at the evolution of Pareto’s
morphological schema. He argues that Pareto developed, from his early economic
work, a coherent and insightful general theory of social stratification and mobility
which anticipated contemporary research on gene-environment interaction. In
Chapter 3, Charles Powers discusses (what some refer to as) Pareto’s structural-
functionalist theory of the social system. His particular concern is with issues of
(mal)adaptivity between elite behaviours and their environments. Powers argues
that Pareto’s last major sociological work, the Transformation of Democracy, first
published four years after the Treatise in 1920, demonstrates how societies can
stagnate at costly sticking points. He reminds us that, according to Pareto, elites do
not automatically adjust to fit changing conditions; rather, the idea that entrenched,
maladaptive elites can cling to power for many years is a reasonable inference to
draw from his writings.
The next two chapters consider realist themes in Pareto’s work. In Chapter 4,
Joseph V. Femia explores the philosophical connection between Machiavelli
and Pareto, arguing that their realistic approach to human behaviour and human
possibilities provides a healthy counterweight to the model of abstract political
moralism that now dominates political theory. Realist analyses, Femia nevertheless
affirms, cannot wholly detach themselves from, and are quite compatible with,
value preferences. In Chapter 5, Alasdair J. Marshall and Marco Guidi suggest that
for Pareto, as for Machiavelli before him, the rigidities and inflexibilities of elite
actors can usefully be understood as arising from their failure to adopt the outlook
of intense realism that is necessary where decision environments are characterised
by high levels of uncertainty and change. They re-read Pareto’s Treatise as a
sociology of risk and uncertainty, where the risks that matter to decision-makers
are bound up with equilibrial forces that often remain undetected, and where to be
uncertain is to be possessed by one of Machiavelli’s animal spirits. The ‘lion’ and
the ‘fox’, they suggest, each correspond to rich psychological and cultural patterns
now widely recognised and well understood but rarely linked to Pareto. Their
chapter ends with the provocative suggestion that we now live in a world where
Pareto’s ‘fox’ thrives to a dangerous degree.
Chapter 6, by John Higley and Jan Pakulski, looks much more closely at whether
Pareto’s sociological template can help explain the rise and fall of political elites
in the modern world, giving particular attention to how UK and US governing
elites fared during the twentieth century. Their evaluation of Pareto’s conceptions
of vulpine and leonine elites, and the long and short cycles they follow, is mixed.
On the one hand, the theory is elastic and vague, to the point where some might
 Introduction 7

consider it vacuous. On the other, it does seem to provide intriguing insights into
the patterns of elite rigidity and degeneration.
Chapters 7 and 8 both offer fresh perspectives on the ideological formulations
that Pareto called ‘derivations’, examining issues of communication and
argumentation that arise within the Treatise in particular. In chapter seven, Alban
Bouvier considers those aspects of Pareto’s sociological thought that bring him
close to Freud’s treatment of beliefs as (usually unconscious) rationalisations
and dissimulations of instincts. His purpose is to provide some much-needed
conceptual clarification of what the Treatise says concerning the rationality
and sociological role of collective belief. According to Bouvier, it was Pareto’s
intention that his sociology should complement J.S. Mill’s System of Logic, by
explaining the social distribution of falacious reasoning identified by Mill. A key
suggestion here is that readings of Pareto which stress his Machiavellianism can
easily underplay, or even neglect entirely, the sociological importance of logical
error. In Chapter 8, Giorgio Baruchello gives Pareto’s treatment of rhetoric its first
airing for an anglophone readership. Although Pareto’s Treatise does not contain
any formal study of rhetoric, it has much to say about the psycho-social forces
that make linguistic communications persuasive. Baruchello shows that Pareto’s
view is complex. It certainly agrees with Plato’s negative view of rhetoric as
an art or technique mastered by sophists, and as social belief that can animate
gullible audiences, which thrives where the philosopher’s concern with goodness
and truth is absent. And yet, Baruchello explains, Pareto sometimes, and perhaps
unintentionally, took a more positive position, consistent with Aristotle’s view of
rhetoric as having pedagogic value for the mind that is struggling with higher
forms of knowledge. Pareto’s more positive treatment of rhetoric seems to dovetail
with his political realism. Pareto seems to recognise that the real world is far from
manifest and can be depicted in different ways, depending on the perspective of
the observer. For Pareto the scientist, valuable insights take the form of historical
regularities; for Pareto the realist, it seems they can also take rhetorical form.
The volume concludes with some reflections on Pareto’s contribution to
economic analysis. Michael McLure discusses a recently published manuscript
which Pareto wrote on monetary theory as late as 1920–21, long after he is
commonly thought to have lost faith in this subject. As McLure points out, by
this time Pareto regarded the quantity theory of money as wholly abstract and
unscientific. In this manuscript, Pareto’s critical position appears to emphasise the
complexity and interdependency of real economic phenomena. He explores how
algebraic representations of relationships between monetary and real phenomena
might be improved to allow monetary theory to fit within the model of general
economic equilibrium developed by Leon Walras. Yet this exercise ultimately
leads him to abandon the quantity theory of money.
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 Chapter 1
Pareto and the Elite
John Scott

Introduction

There has been considerable debate and contention over the respective
contributions of Pareto and Mosca to the idea of the elite, and the two authors
themselves challenged each other’s claim to priority in discovering and stating
the principles of elite theory. Mosca reputedly felt that he had been denied his
proper recognition as the progenitor of the theory that all societies are ruled by
organised minorities. Mosca did, indeed, introduce his idea of the ruling class
(classe dirigente) in his Sulla Teorica dei governi e sul governo parlamentare
(Mosca 1884), some years before Pareto examined the organised groups that were
active in Italian politics (Pareto 1893). Mosca himself elaborated on his basic
insight in the first edition of his Elementi (Mosca 1896), in the same year in which
Pareto began to explore ‘aristocracies’ (Pareto 1896–7). It was in 1901 that Pareto
first set out his more systematic account focused on the concept of the political
aristocracy (aristocrazia) as an analytical category (Pareto 1901). Pareto further
developed his ideas in conjunction with his doctoral student Maria Kobalinska,
who completed her thesis on La circulation des elites en France in 1912. Not
until the publication of his Trattato di Sociologia Generale (Pareto 1916) did he
set out his most systematic formulation using the new terminology of the ‘elite’,
developed with Kobalinska. It was following this major work that Mosca returned
to the topic and set out as more fully developed account of his ruling class model;
in the Second edition of his key work (Mosca 1923).
Thus, the concept of the elite emerged in Italy with Mosca, though it emerged
simultaneously with the work of other critics of the economic determinism of the
orthodox Marxist account of class and class struggle (Gumplowicz 1875, 1885;
Novicow 1897). Mosca was, perhaps, the most prominent of these writers, but
his continuing influence owed a great deal to the interest encouraged by Pareto’s
introduction of the word elite and his placing of it in a formal framework of political
analysis. This difference of terminology between Pareto and Mosca – whether
to refer to an elite or a ruling class – proved important in establishing Pareto’s
superior reputation. The term ‘ruling class’ remained too closely tied to Marxist
terminology and failed to properly mark the break with the economic concept of
‘class’. The word ‘elite’, on the other hand, carried none of this conceptual baggage
and served to mark out a new and distinctive direction for political analysis.
10 Vilfredo Pareto

Pareto’s introduction of his new terminology, however, did not have this
distinctiveness as its principal aim. Pareto introduced many new terms and used
existing words in new ways in order to produce a formal, technical language that
would, he believed, allow the building of a true science of politics. His goal was
to formulate precise and testable laws of politics – and of other social processes –
similar to the quantitative laws and simultaneous equations that had so successfully
been produced in marginalist economics. To this end, he frequently used the labels
A, B, and C, etc., and gives verbal equivalents to these only reluctantly and as a
matter of convenience. He therefore chose, whenever possible, those words that
have only minimal existing conceptual baggage within an already established
social scientific discourse. The principal examples of this strategy are his use of
‘derivation’ rather than ‘ideology’ and ‘elite’ rather than ‘ruling class’.
It is on this basis that Pareto developed his theory of elites. The central tenet of
his argument is that all societies are dominated by elites, that the composition of the
elite varies from one society to another, and that membership of the elite changes
over time in each particular society. Structure and change in elites must, therefore,
be understood in relation to structural variations and changes in recruitment, traits,
and capacities in the wider societies from which elites are recruited.

The Model of the Elite

Pareto’s definitive account of the elite occurs in a relatively short section of the
Trattato (Pareto 1916: 1421–32). He begins his construction of a precise and
relatively neutral terminology with the argument of Kobalinska that an elite is
to be defined by its ‘superiority’ and not by any merit or other quality that it may
– or may not – posses. It is simply measurement on a scale of superiority and
inferiority that is to be used in identifying an elite. The moral and social qualities
that its members may possess are ethical or empirical matters that are of secondary
importance to the purely formal definition of the term.
In its most general sense, then, an elite of individuals can be identified in
relation to any trait or attribute that can be measured on a scale of superiority
and inferiority. Activities and occupations can be ranked according to the level or
degree of each particular skill or trait that they manifest. Thus, there can be rank
orderings of criminals, prostitutes, poets, artists, soldiers, chess players, and, we
may add, footballers, stamp collectors, sociologists, and any other activity that
can be imagined. An elite comprises those individuals with the highest ranking
in a particular activity, and the overall elite of a society is the category of all such
separate elites. The elite is the general category of individuals with the highest
ranking in their social activities (Pareto 1916: 1423).
Pareto makes three key assumptions in his initial definition. First, he assumes
that all occupations and activities can, in fact, be measured as continuous variables
and that the level of measurement accorded to a particular individual is a matter
of reliable scientific judgement. However, it is not at all clear that prostitutes, for
 Pareto and the Elite 11

example, can be graded objectively according to the skills and activities that they
bring to their work or that all of their clients will value the same skills and abilities.
Pareto believed, however, that the particular occupations in which he is especially
interested – as I will show below – can, in fact, be ranked in this way.1
His second assumption is that social positions embody a single or dominant
ability or skill and that individuals can, therefore, be ranked by their social positions
rather than directly by their individual traits. This means that political analysis is
concerned with categories of social positions as much as it is with aggregates of
the individuals who occupy them. I will explore some of the implications of this
assumption below.
The third fundamental assumption made by Pareto is that an elite can be defined
as the top percentage of individuals engaged in specific social activities, though the
exact percentage figure was left unspecified. There is no single yardstick against
which skills and abilities can be measured – even money cannot be treated as a
universal measure of value – and so no absolute threshold measure can be specified
for identifying an elite. An elite must be defined by a necessarily arbitrary rank
ordering: as the top 0.5 percent, top 1 percent, top 10 percent, top 15 percent, or
whatever, in a distribution. Pareto gives no indication of what percentage cut-off
point he thinks it is feasible to use and so he bequeathed to all subsequent elite
researchers the task of justifying the particular cut-off points that they must adopt
in their studies.
Despite these problematic assumptions, Pareto proceeded to the second major
step in his argument. He suggested that an overall social elite comprises the collection
of all specialised elites in a society, but that any such overall elite can be divided into
‘governing’ and ‘non-governing’ sections. In this he again follows Kobalinska. The
governing elite of a society comprises those individuals in activities related to the
government of their society. Thus, chess players – no matter how skillful they may
be at the game – are unlikely to form a part of the governing elite, while military
officers and judges may well do so. This definition of a governing elite depends on
a definition of ‘government’, though Pareto does not provide this. His model of the
governing elite trades on conventional understandings of what it means to govern.
The governing elite presumably includes all holders of political offices above a
threshold level, but it must also be considered to extend beyond these to include
all those having a significant influence over the activities of government (Pareto
1916: 1424). Again, Pareto provides no guidance on how his definitions can be
operationalised in empirical work and simply assumes that the formal definition
will be sufficient for his purposes.
A governing elite may include various ‘aristocracies’.2 These are solidaristic
and often hereditary social groups with a particular resource base, most typically

1  The chapter by François Nielsen in this book uncovers the more general model of
inequality implied in Pareto’s remarks.
2  The invoking of aristocracies is possibly a survival of his earlier pre-elite
terminology.
12 Vilfredo Pareto

economic or military. These are what Mosca (1923) referred to as ‘social forces’ in
his more comprehensive account of the social basis of politics. Pareto himself does
not go into any detailed discussion of aristocratic social forces, covering the ideas
in just a few brief paragraphs. Pareto’s emphasis on the idea that governing elites
can be characterised by the social and economic backgrounds of those who fill elite
positions has, nevertheless, been the cornerstone of subsequent elite studies. Pareto
himself introduced this idea in order to make the point that the social concept of an
elite can change over time. Elite members may become weakened or their abilities
may decline. They may decline and lose their power while new aristocracies rise
to take their place. The turnover in the composition of the governing elite ensures
that ‘History is a graveyard of aristocracies’ (Pareto 1916: 1430).
This idea was elaborated into Pareto’s famous thesis of the ‘circulation of
elites’. He holds that any governing elite will include a diversity of individuals with
a specific mix of skills and capacities. The particular mix of skills and capacities
is the result of the circulation of individuals from one sphere of activity to another,
whether this be within the elite or between the elite and the non-elite. He holds,
therefore, that the political sociologist must study the ‘velocity of circulation’,
by which he means the rate of social mobility from one group to another. The
rate of mobility or circulation depends upon both the supply and the demand for
particular skills and abilities.
A problem resulting from Pareto’s initial assumptions may be noted here. As I
have shown, Pareto treated occupancy of a social position as an individual attribute
or as an unproblematic, direct reflection of an individual attribute. This means
that he saw individuals as owing their membership of the governing elite to their
occupancy of particular positions and not simply to their possession of particular
skills. It is difficult, therefore, to see why a changing distribution of skills would,
other things being equal, result in a circulation or turnover in elite membership.
Pareto’s argument that there is a constant circulation of individuals and,
therefore, a continual change in the composition of the governing elite, is central
to his explanation of the equilibrating tendencies of social systems. Equilibrium is
a fundamental system state for Pareto, and he seeks to show how governing elites
contribute to the attainment or disturbance of such equilibrium. Equilibrium, he
argued, is disturbed whenever the changing composition of skills and abilities
is such that a governing elite no longer recruits individuals with the appropriate
balance of skills and capacities. He states that:

the governing élite is always in a state of slow and continuous transformation.

It follows on like a river, never being today what it was yesterday. From time
to time sudden and violent disturbances occur. There is a flood – the river
overflows its banks. Afterwards, the new governing élite again resumes its slow
transformation (Pareto 1916: 1431).

The transformation of a governing elite may be slow and gradual, or it may involve
the revolutionary overthrow of one group by another. To understand Pareto’s idea
 Pareto and the Elite 13

fully, however, his analysis of the forces behind changing skills and abilities must
be followed through his analysis of social action.

Action, Residues, and Rationalisations

All actions, Pareto argues, follow from subjective states of mind. People base
what they do on their understandings of the world and of the likely consequences
of their actions. On this basis, Pareto identified two polar types of action that are
to be the building blocks of his social theories. Some actions – those that Pareto
referred to as ‘logical’ – are strategic or instrumental in orientation. These actions
have a means-ends structure and are based on the technical knowledge possessed
by the actor. They are ‘actions that use means appropriate to ends and which
logically link means with ends’ (Pareto 1916: 77). The prototype of logical action
is that which is objectively logical as well as subjectively logical. That is, such
action can be judged as technically appropriate by scientific observers. Contrasted
with this strategic form of action is the ‘non-logical’ type of action in which the
means-ends relationship is irrelevant to the actor or in which a scientific observer
would judge it to be technically unfounded. In non-logical action, emotional and
value commitments prevail over technical rationality. Non-logical actions are
driven by sentiments but are invariably rationalised in theories that aim to justify
or legitimate these actions, obscuring the real subjectivity by casting the action in
a more socially acceptable context of meanings.
It is not clear that the attitude that a scientific observer might take towards
an action is especially crucial in delineating the two types. Pareto’s sociological
analysis rests on the subjective orientation and organisation of action rather than
its scientific status. The important distinguishing characteristic is the subjective
orientation of the actor, and the two types of action can be regarded simply from
the standpoint of the actor’s subjectivity and definition of the situation as strategic
or expressive or committed.
Strategic – ‘logical’ – orientations are, Pareto argued, typical of artistic,
scientific, and economic activity, and also characterise much military, political,
and legal activity. Such action was central to his own economic theory (Pareto
1896–7). Expressive or committed – ‘non-logical’ – orientations, on the other
hand, are typical of religion and magic but also of certain political activities.
Pareto’s view of political activity and government is that it combines the logical
and the non-logical, with the latter predominating. However strategic they may
be, political activists frequently act from irrational or non-rational motives and
delude both themselves and others about the true motives behind their actions. It is
non-logical action that Pareto sees as having the greatest importance in explaining
the emergence and circulation of elites and the justifications they offer for their
exercise of power. For this reason, he saw an analysis of the forms of non-logical
action as the essential foundations for an adequate theory of politics.
14 Vilfredo Pareto

The sentiments that motivate non-logical action are relatively fixed and
enduring appetites, tastes, inclinations, and interests. They are generally
unconscious, though individuals may become partly aware of them through
the traces or ‘residues’ that they leave in consciousness. These residual
manifestations of the sentiments are the bases of the more extended theoretical
elaborations that individuals derive from them. These derived theories are the
imagined works of the mind that are more variable from one society to another
and that comprise the rationalisations, justifications, and legitimations that
individuals offer for their actions. It is the ‘residues’ and the ‘derivations’, rather
than the sentiments themselves, that Pareto focuses on in his classification of the
forms of non-logical action.
As already noted, Pareto gave no significance to the particular terminology
that he used. The terms residues and derivations have a plausible meaning within
the theoretical narrative that he builds, but he remarks that their commonsense
meanings are of no relevance at all and that they are used simply as a matter of
convenience instead of making constant reference to ‘A’, ‘B’, or ‘C’ in quasi-
algebraic notation. The terms used are mere conventional labels.
Pareto identified six types of non-logical action on the basis of their residues,
along with numerous sub-types (Pareto 1916: 516–9). These six types are those
articulated as a tendency to combine, a tendency to form persisting relationships,
a tendency for self-expression, a tendency to associate collectively with others, a
tendency to maintain a sense of self and individuality, and a tendency to sexual
expression. While all such forms of action enter into the constitution of political
relationships, it is the first two that Pareto sees as having the greatest salience in
political analysis.
The tendency to combine – held to be rooted in an ‘instinct for combinations’
– is the tendency to mentally associate objects of experience. As the tendency
to synthesise in thought, it is the basis of all theorising and involves the whole
range of symbolic associations made in dreams and myths as well as the more
logical associations that characterise rational thought.3 This tendency to combine
comprises the making of integrative and holistic groupings in understanding
experience and is the basis of all inventiveness.
The tendency to form persisting combinations – referred to as resulting from
an instinct for the ‘persistence of aggregates’ – involves making the conceptual
combinations identified in thought into enduring unities to which a real identity can
be ascribed. Individuals oriented in this way see themselves as acting in relation
to ‘the state’, ‘the church’, ‘freedom’, ‘humanity’ or some other abstraction that
constrains and controls their behaviour and that they invoke in order to control

3  This implies that it may not be sharply distinguished from logical action and that,
indeed, logical action may actually be a particular form or modality of sentiment-driven
‘non-logical’ action. In other formulations, however, Pareto holds that logical action is free
of sentiments and theories of logical action are not derivations.
 Pareto and the Elite 15

the behaviour of others. It is a specifically conservative form of action and is

expressed in various forms of traditionalism.4
The partially formulated emotional ideas found in consciousness – the residues
– are verbally elaborated into theories that have an explanatory and persuasive
significance and that, in the case of political activity, comprise the ideological
expressions of sentiments and interests that justify actions to others. These
derivations invoke the authority of individuals, customs, or gods, or they cite
principles and absolute values that sustain non-logical actions through assertion
and argument (Pareto 1916: 886, 899).

The Circulation of Elites and Equilibrium Conditions

Pareto saw the non-logical actions based on residues of combination and

persistence as being the most important for determining social equilibrium. Within
any one society, there is a constantly shifting mix of the sentiments and associated
derivations involved in these action types. A governing elite is recruited from
the wider society and its membership will show a balance between the two types
that is derived from but may not correspond to or represent the balance in the
wider society. It is the balance between the two types within the governing elite
that is the key to understanding the contribution that they are able to make to
government. The balance of sentiments within a governing elite depends upon the
state of circulation in elite membership.
It is in this context that, using Machiavelli’s concepts of the ‘lions’ and the
‘foxes’, Pareto identified two principal types of governing elite (Pareto 1916:
1622–4).His use of this terminology is, however, less heavy handed than some
commentators have implied. The two types of elite are defined by the particular
residue that dominates their thinking and action. Governing elites relying
on physical force and intensely held sentiments are the lions of politics. They
comprise individuals in whom strong tendencies towards the persistence of
aggregates predominate. Their conservatism is such that they may not stimulate or
encourage economic innovation and growth and will be likely to rely on militarism
and conquest. Governing elites relying on intelligence and cunning – the foxes
of politics – comprise individuals in whom the tendency to combine is strong.
They are likely to encourage innovation and change and tend to be ‘open’ and to
encourage rapid circulation.

4  Of the other types of non-logical action, the tendency to associate collectively with
others – the instinct of sociability – is held to be the basis of collectivist orientations and
the tendency to express a sense of self is said to be the basis of individualist orientations.
The tendency to external expression is close to what Max Weber referred to as expressive
or affectual action, as found in religious ecstasy and shamanism. The tendency to sexual
expression is manifest, Pareto argued, in taboo and proscriptions.
16 Vilfredo Pareto

In most concrete societies, the governing elite will combine elements of each
of these types of motivation, the balance shifting over time with trends in social
circulation. An old elite is weakened when it adopts softer, milder forms of rule,
when it becomes sentimental and humanitarian rather than pragmatic and self-
interested. A weakening elite has less ability to maintain the impositions that it
places on the rest of the society (Pareto 1901: 60). The succession of governing
elites disclosed in historical analysis may exhibit a cyclical pattern and Pareto
suggested that the frequency of this cyclical variation will be related to the
general conditions of equilibration in social systems (Pareto 1916: 1836ff.). It is
through their effects on the composition of the governing elite that disequilibrating
conditions may eventually lead to the restoration of equilibrium.
Pareto applied these ideas in a detailed consideration of the phases of Roman
history, but also applied them to contemporary politics. The French revolution,
he argued, ended the power of an old governing elite and led to the rise of a
new, bourgeois elite. The old elite had initiated religious changes that unleashed
a growth in religious sentiment in the wider population that was then available to
be mobilised by the more dynamic and innovative bourgeoisie as a basis for its
achievement of power (Pareto 1901: 39–40). This new elite, however, he saw as
already showing signs of decline in France, though governing elites of this kind
remained strong in Germany and the United States. In contemporary Europe he
identified a continuing growth in religious sentiments through the strengthening of
old religions and the rise of new ones. Among these new ‘religions’ he identified
socialism (Pareto 1902) and also nationalism, vegetarianism, and puritanical
moralism. The rise of a new elite becomes apparent in the growing strength of
the organised working class viz-à-viz the bourgeoisie and, anticipating Michels’
(1911) iron law of oligarchy, an emerging gulf between organised skilled workers
and the mass of unskilled labourers.
Pareto’s ideas have had a huge impact on subsequent studies of elites. Despite
a careful comparative study of his work with that of Mosca (Meisel 1958),
usage of Pareto’s ideas has often been often in the rather simplified terms of
an investigation into the social background and connections of top positions of
decision-making (Lasswell 1952; Bottomore 1964; Parry 1969). Important studies
have, nevertheless, been undertaken, these studies often combining Pareto’s
insights with ideas from Marx and from Weber. Perhaps the most striking such
studies have been those of Mills (1956), Miliband (1969), Domhoff (1967; 1998),
and Scott (Scott 1991) that have demonstrated the close association between
positions within a governing elite and inequalities of wealth and social status.
Other studies have concentrated on the investigation of economic elites at a
national (Useem 1984; Scott and Griff 1984; Mintz and Schwartz 1985; Stokman
et al. 1985; Carroll 1986), and a transnational level (Fennema 1982; Carroll 2004;
Carroll et al. 2010). Most recently, a renewal of elite analysis has connected these
concerns with ideas emerging from the sociology of Bourdieu concerning social
distinction (Maclean et al. 2006; Savage and Williams 2008).
 Pareto and the Elite 17

There has been less attention accorded to Pareto’s suggestions concerning

the relationship between elite circulation and social equilibrium and long-term
patterns of historical succession of elites. Equally there have been few attempts to
apply the elite idea systematically beyond the political and the economic spheres
(but see Daloz 2009). This reflects the more speculative nature of Pareto’s remarks
in these areas and the abandonment of simple mechanical ideas of equilibrium.5
Charles Powers’ contribution to this volume, however, suggests some interesting
ways in which this idea can be developed. Little consideration has been accorded
to Pareto’s discussion of sentiments, residues, and derivations, though there are
interesting parallels with recent discussions of discourse and rationalisation. The
discussion of rhetoric and justification in Boltanski and Théveniot (1991), for
example, suggests that a reconsideration of Pareto’s view is long overdue.
Pareto’s work remains, however, an important landmark in political and
economic analysis and will continue to orient research in this area. It is in
relation to the governing elite and its counterpart in economic affairs that Pareto’s
reputation remains strong. No one researching into these areas can afford to ignore
his powerful ideas.

References

Boltanski, Luc and Thévenot, Laurent 1991. De la justification. Les économies de

la grandeur. Paris: Gallimard.
Bottomore, Thomas B. 1964. Elites and Society. London: C. A. Watts.
Carroll, William K. 1986. Corporate Power and Canadian Capitalism. Vancouver:
University of British Columbia Press.
Carroll, William K. 2004. Corporate Power in a Globalizing World. A Study in
Elite Social Organization. Ontario: Oxford University Press.
Carroll, William K. with, Carson, Colin, Fennema, Meindert, Heemskerk, Eelke
and Sapinski, J.P. 2010. The Making of a Transnational Capitalist Class.
London: Zed Books.
Daloz, Jean-Pascal 2009. The Sociology of Elite Distinction. Houndmills: Palgrave.
Domhoff, G. William 1967. Who Rules America? Englewood Cliffs: Prentice Hall.
Domhoff, G. William 1998. Who Rules America? Power and Politics in the Year
2000. Mountain View: Mayfield Publishing.
Fennema, Meindert 1982. International Networks of Banks and Industry. Hague:
Martinus Nijhof.
Gumplowicz, Ludwig 1875. Rasse und Staat. Wien: Manz.

5  Parsons’ analysis of power and elections (Parsons 1963; Parsons 1959) represents,
perhaps, the most general usage of equilibrium ideas in political analysis, though he did not
link this to the idea of a governing elite. Parsons was somewhat critical of the elite idea as
it had been taken up and applied by more radical theorists (Parsons 1957).
18 Vilfredo Pareto

Gumplowicz, Ludwig 1885. Outlines of Sociology, First Edition. Philadelphia:

American Academy of Political and Social Science, 1899.
Lasswell, Harold D. 1952. ‘The Elite Concept’ in Lasswell, H.D., Lerner, D. and
Rothwell, C.E. (eds) The Comparative Study of Elites. Stanford: Stanford
University Press, 6–21.
Maclean, Mairi, Harvey, Charles and Press, John 2006. Business Elites and
Corporate Governance in France and the UK. Basingstoke: Palgrave
Macmillan.
Meisel, James H. 1958. The Myth of the Ruling Class. Ann Arbor: Michigan
University Press.
Michels, Roberto 1911. Political Parties. New York: Herst’s International Library,
1915.
Miliband, Ralph 1969. The State in Capitalist Society. London: Weidenfeld and
Nicolson.
Mills, C. Wright 1956. The Power Elite. New York: Oxford University Press.
Mintz, Beth and Schwartz, Michael 1985. The Power Structure of American
Business. Chicago: Chicago University Press.
Mosca, Gaetano 1884. Sulla Teorica dei governi e sul governo parlamentare.
Turin: Loescher.
Mosca, Gaetano 1896. ‘Elementi di Scienza Politica, Volume One’ in Mosca, G.
(ed.) The Ruling Class, Chapters 1–11. New York: McGraw Hill, 1939.
Mosca, Gaetano 1923. ‘Elementi di Scienza Politica, Volume Two’ in Mosca, G.
(ed.) The Ruling Class, Chapters 11–17. New York: McGraw Hill, 1939.
Novicow, Yacov 1897. Conscience et Volonté Sociales. Paris: V. Giard et E Brière.
Pareto, Vilfredo 1893. ‘The Parliamentary Regime in Italy’ in Pareto, V. (ed.) The
Ruling Class in Italy before 1900. New York: Howard Fertig, 1974, 11–82.
Pareto, Vilfredo 1896–7. Course d’Economie Politique. Lausanne: Rouge.
Pareto, Vilfredo 1901. The Rise and Fall of Elites. New York: Bedminster Press,
1968.
Pareto, Vilfredo 1902. Les Systèmes Socialistes, Two Volumes. Paris: Marcel Giard.
Pareto, Vilfredo 1916. A Treatise on General Sociology. New York: Dover, 1963.
Parry, Geraint 1969. Political Elites. London: George Allen and Unwin.
Parsons, Talcott 1957. ‘The Distribution of Power in American Society’. World
Politics 10: 123–43.
Parsons, Talcott 1959. ‘“Voting” and the Equilibrium of the American Political
System’ in Parsons, T. (ed.) Politics and Social Structure. New York: Free
Press, 1969, 204–40.
Parsons, Talcott 1963. ‘On the Concept of Political Power’. Proceedings of the
American Philosophical Society 107: 232–62.
Savage, Michael and Williams, Karel (eds) 2008. Remembering Elites. Oxford:
Blackwell.
Scott, John 1991. Who Rules Britain? Cambridge: Polity Press.
Scott, John and Griff, Catherine 1984. Directors of Industry. Cambridge: Polity
Press.
 Pareto and the Elite 19

Stokman, Frans, Ziegler, Rolf and Scott, John (eds) 1985. Networks of Corporate
Power. Cambridge: Polity Press.
Useem, Michael 1984. The Inner Circle. New York: Oxford University Press.
This page has been left blank intentionally
 Chapter 2
Talents and Obstacles:
Pareto’s Morphological Schema and
Contemporary Social Stratification Research1
François Nielsen

Introduction

This chapter presents an overview of Pareto’s morphological schema. Schumpeter

(1951) grouped together under this term various aspects of Pareto’s work related
to the distribution of income and social stratification and mobility, as well as the
famous theory of circulation of elites. These materials pertain to various stages of
Pareto’s intellectual evolution, from the early economic works around the Cours to
the sociological synthesis of the Traité.2 While not forming a strictly chronological
sequence these different themes of Pareto’s thought combine into coherent threads
of theoretical development (Aron 1967; Busino 1967; Nielsen 1972, 2007).
Consideration of these themes throughout Pareto’s entire work – economic as
well as sociological – reveals four interconnected stages of Pareto’s thought on
morphology, representing an overall contribution much more comprehensive than
the sole discussion of the circulation of elites, the aspect of Pareto’s morphological
schema best remembered today in sociology.
In this chapter, I will first summarize four stages in the evolution of Pareto’s
morphological schema. These are the economically focused discussion of the
size distribution of income, the generalization of the income distribution into a
model of social heterogeneity and the movements of individuals within the social
structure, the extension of the income distribution model to the socio-political
model of the circulation of elites and the theory of revolutions, and finally the
integration of the morphological schema as a component into Pareto’s model of
the social system as a whole.
Each of these four stages, of increasing generality, has had its own legacy
for later research on income inequality and on social stratification and mobility.
I will argue that Pareto’s contribution will be further appreciated in the future.

1  Acknowledgement: Graphic assistance provided by the Center for Faculty

Excellence, University of North Carolina at Chapel Hill.
2  I will refer throughout to Pareto’s three larger treatises as Cours (Pareto 1896/1897),
Manuel (Pareto 1909, 1971) and Traité (Pareto 1917–1919, 1935).
22 Vilfredo Pareto

Because of an exceptional intelligence and advanced technical training, Pareto

was scientifically well ahead of his contemporaries in the social sciences. Thus
fruitful implications of his work are still emerging today, as scientific progress
and the more widespread diffusion of technical knowledge make his work more
generally accessible.
In each of the four areas of the morphological schema Pareto’s insights have
become clearer to us. First, the regularity observed by Pareto in the shape and
functional form of the distribution of income across very different societies and,
as it turns out, the similar distribution of many other phenomena of the natural
and social worlds, suggests the existence of very general mechanisms in the
production of inequality. This insight has prompted fundamental research on the
nature of the ‘social law’ (as Pareto would put it) that may underlie the similarity
in the distributions of such varied phenomena, such as that of Benoit Mandelbrot
(e.g., Mandelbrot and Hudson 2004). Second, with respect to the generalized
model of the social structure and mobility, Pareto’s conjecture on differential
returns to native talent for individuals born to different strata of society prefigures
contemporary research on genes by environment interactions in behavior genetic
models of socio-economic achievement. Third, with respect to mechanisms of
the circulation of elites and revolutions, the importance of Pareto’s emphasis on
elites may have yet to receive full appreciation as a realistic alternative to the
Marxist scenario, as recent studies suggest that actual revolutions unfold in a way
that is more consistent with Pareto’s, rather than Marx’s vision (e.g., Riga 2008).
Finally, Pareto’s work on cycles of mutual dependence continues to provide a
model for the integration of theories of social stratification and mobility within a
more encompassing model of the social system as a whole (Lenski 1966, 2005;
Parsons 1949, 1968; Powers 1987).
The outline of this chapter is as follows. The next four sections discuss the
four stages of Pareto’s morphological schema: the size distribution of income and
wealth; the generalized model of the social structure and mobility; the circulation
of elites and the dynamics of revolutions; and integration of the morphological
schema within a model of the social system. I then return to Pareto’s model of
mobility in the social structure, showing how Pareto’s conjecture on the way
opportunity for achievement varies according to location in the social structure
relates to current research on the role of genes and genes-environment interactions
in social mobility processes. The chapter ends with a discussion and conclusion.

Pareto’s Law of Distribution of Income and Wealth

As Aron (1967) noted, Pareto’s more specifically economic work on the distribution
of income is at the root of his broader sociological conception of the social
structure. Materials on this topic are found in the Cours (§957ff. and the important
Note 2 to §962 misplaced on page 461 of the 1896/1897 French language edition)
and in shorter pieces assembled in Pareto (1965). A good overview of Pareto’s
 Talents and Obstacles 23

work is provided by Busino (1967; see also Cowell 1995; Mandelbrot and Hudson
2004; Nielsen 2007).
Pareto’s point of departure was empirical. Toward the end of the nineteenth
century, agencies in England and other industrial countries had begun releasing
income distribution statistics giving the numbers of taxpayers (or, generally,
income-receiving units) in different income brackets. A compendium of these
data by Leroy-Beaulieu (1888) greatly influenced Pareto, who himself collected
additional data, increasing the range of the different societies he could compare
(Busino 1967: 27–34). The discovery of the income law is described by Mandelbrot
and Hudson (2004: 153–4) as follows:

[Pareto] gathered reams of data on wealth and income through different centuries,
through different countries: the tax records of Basel, Switzerland, from 1454 and
from Augsburg, Germany in 1471, 1498 and 1512; contemporary rental income
from Paris; personal income from Britain, Prussia, Saxony, Ireland, Italy, Peru.
What he found – or thought he found – was striking. When he plotted the data on
graph paper, with income on one axis, and number of people with that income on
the other, he saw the same picture nearly everywhere in every era. Society was
not a ‘social pyramid’ with the proportion of rich to poor sloping gently from
one class to the next. Instead it was more of a ‘social arrow’ – very fat on the
bottom where the mass of men live, and very thin at the top where sit the wealthy
elite. Nor was this effect by chance; the data did not remotely fit a bell curve,
as one would expect if wealth were distributed randomly. ‘It is a social law’, he
wrote: something ‘in the nature of man’.

To facilitate comparisons between societies with different population sizes and

currencies, Pareto had tried to find a simple mathematical expression that would fit
the data for different countries and times. Defining x as a given income and N as the
number of taxpayers having an income greater than x, and plotting the logarithm
of N against the logarithm of x, he found that the points trace a straight line with
negative slope. The pattern is remarkably similar for different countries and times.
Linearity of the (log x, log N) relationship entails a relationship between N and
x given by

log N = log A – α log x

Pareto estimated the slope α and intercept log A using a simple linear regression.
Eliminating logarithms in this equation he obtained the complementary cumulative
distribution function
A
N =
xα

which gives, for any x, the number N of income-receiving units with incomes
greater than x. Pareto obtained the probability density function by differentiating
24 Vilfredo Pareto

this equation with respect to x and changing the sign (because the complementary
distribution is reverse-cumulated), so that
dN
y dx = – dx,
dx
yielding the function
αA
y =
x α+1
where y denotes the probability density for income x (see Cowell 1995 for further
mathematical developments).
The graph of the function is shown in Panel (a) of Figure 2.1 from the Cours.
Pareto transposed the usual x and y axes, showing income on the vertical axis to
better evoke the image of the social ‘pyramid’, but commenting that the graph of
the distribution is more like that of an arrowhead or a top than a pyramid. In the
later Manuel Pareto shows the distribution of income as in Panel (b) of Figure 2.1,
with a sharply-tapering ‘bottom’ added. Pareto reckoned that in empirical
distributions the bottom is not flat as the mathematical distribution implies but
sharply tapered, with frequency of incomes diminishing rapidly near the minimum
level of subsistence, as individuals cannot (by definition) survive below it,
although statistical data for this part of the distribution were rarely available in his
days. Thus the probability distribution that Pareto found only describes well the
upper tail of the typical income distribution.

x
s

p q
m n
a' b' s b
a b
t b'
m n a

o y o
Figure 2.1 Distribution of income
Note: (a) Graph of the power law. Income x (vertical axis) against probability density y
(horizontal axis). The shaded area represents the number of units with incomes between x1
and x1 + dx. (b) Typical shape of an empirical income distribution.
Source: (a) Pareto 1896/1897: §961, Figure 48; (b) Pareto 1909: 384, §11, Figure 54.
 Talents and Obstacles 25

Most of Pareto’s data sets could be closely fitted by a function of the type of
Equation 2. Furthermore, the estimated value of α varies relatively little among the
different data sets; α is in most cases in the vicinity of 1.5. Thus, if one compares
the frequency distributions of societies that differ substantially in time and space:

It looks then as if one has drawn a large number of crystals of the same chemical
substance. There are big crystals, and one finds medium ones and small ones, but
they all have the same shape (Cours, §958).

Empirical values of α do vary, however, and Pareto shows that α is a measure of

inequality in the distribution of income, with smaller values of α corresponding to
greater inequality (Cours, §964 and the important correction in Manuel 390, §24;
see also Cowell 1995). As Mandelbrot and Hudson (2004: 158) comment:

In most cases, [Pareto] underestimated alpha, which appears to be closer to 2 than

3/2 – meaning millionaires are rarer than he thought. But his basic observation
of a power law relationship between income and population was insightful. At
its core is the observation that, in a society, a very few people are outrageously
rich, a small number are very rich, and the vast bulk of people are middling or
poor. The alpha in Pareto’s formula is just a way of quantifying exactly how
inequitable the society is.

There is no doubt that Pareto was profoundly impressed by the apparent universality
of the shape of the distribution of incomes in the upper tail, and by the similarity in
values of the parameter α ‘in countries whose economic conditions are as different
as those of England, of Ireland, of Germany, of Italian city-states, and even of Peru’
(Cours, §960). He sensed the existence of some general mechanism underlying
the shape of the distribution, independent to some extent of the nature of social
institutions. Pareto’s view has sometimes been exaggerated by critics (Atkinson
and Brandolini 2006; Cowell 1995). Atkinson and Brandolini (2006: 442 and
Endnote 4), for example, quote a passage of the Cours (§1012, their translation) as
revealing Pareto’s belief in the ‘immutability’ of the law of distribution:

The inequality in the distribution of incomes seems therefore to depend much

more on the human nature itself than on the economic organization of the
society. It could well be the case that deep modification of this organization had
but little impact on the law that governs the distribution of incomes.

The claim that Pareto believed that the distribution of income is ‘immutable’ is
questionable in view of several aspects of his discussion:

1. By ‘the law that governs the distribution of income’ in the quotation, Pareto
may be referring to the family of power distributions, not necessarily to a
particular value of α;
26 Vilfredo Pareto

2. In comparing the distribution of income in a modern industrial society with

that in a society of Antiquity (Manuel 386, Figure 56), Pareto explicitly
allows for technology-related differences in the distributions, especially
with respect to the lower part of the distribution; and
3. In Manuel (388–93, §§23–31) Pareto derives the prediction that inequality
can decrease only if average income level increases, implicitly assuming
that the shape of the distribution is variable as a function of overall
productivity.

The first and most obvious hypothesis that Pareto considers concerning the general
mechanism is that the distribution of income results from chance, or ‘this set of
unknown causes, acting now in one direction, then in another, to which, given
our ignorance of their true nature, we give the name of chance’ (Cours, §957). He
takes pain demonstrating mathematically that the distribution of income cannot be
fitted by a normal distribution, as it would if incomes were sums of independent
causes (Cours, §962, Note 1).
The alternative hypothesis that Pareto proposes is that the distribution
of income is the result of social heterogeneity – individual differences in
the probability of gaining income corresponding to differences in qualités
eugéniques, what we would today call genetic endowment – affecting the ability
of individuals to acquire income. Pareto develops a stochastic process based
on this assumption and shows that it indeed yields a limiting distribution that
coincides well with empirical income distribution data (Cours, §962: 461, Note
2). But Pareto did not find his own derivation compelling, depending as it does
on the assumption of perfect mobility of individuals in society:

But mobility among the different strata of society is far from being perfect. The
law of distribution … thus results [instead] from the distribution of qualities that
permit men to enrich themselves and [italics added] the disposition of obstacles
that oppose the expression of these capacities (Cours: 461, §962 Note 2).

It was later discovered that the same power law (now often called Pareto law) that
was useful in describing the distribution of incomes also fitted the distributions
of many other social and natural phenomena, including the distribution of
the populations of towns and cities, the frequency of words in texts, returns to
individual stocks, sizes of sand particles, sizes of industrial establishments, number
of articles published by sociologists in professional journals, insurance claims and
sizes of meteor impacts on the moon. A substantial literature has attempted to
propose statistical models that account for the ubiquity of the Pareto distribution
(Cowell 1995). In all these examples a power law holds, such that the larger the
size of the phenomenon, the lower is its frequency, in the same proportion that
Pareto found holds for incomes. Some scholars have been deeply intrigued by
such correspondences, reckoning that the universality of the phenomenon suggests
the existence of powerful and general mechanisms acting in the background,
 Talents and Obstacles 27

independently of the specifics of the field of study. This sentiment is expressed by

Schumpeter (1951: 121 and Footnote 8) as follows.

Few if any economists seem to have realized the possibilities that such invariants
hold out for the future of our science … nobody seems to have realized that
the hunt for, and the interpretation of, invariants of this type might lay the
foundations for an entirely novel type of theory.

Schumpeter’s prophecy has in fact come to pass, as fruitful applications of Pareto’s

Law have multiplied in a wide variety of fields, at the hands of Benoit Mandelbrot
and others (Mandelbrot and Hudson 2004; Merton 1968).

The Social Pyramid – Or Is It a Top?

The evolution of Pareto’s ideas on income inequality and social stratifications

can be followed up in Pareto’s (1909/1971) later Manual of Political Economy
(hereafter Manuel). Here he develops the earlier intuition of the Cours that the
universal presence of economic and social inequalities in human societies may
well reflect ‘physical, moral, and intellectual’ differences among individuals, but
are not their direct expression – as social inequalities obey a specific, skewed
distribution that differs from the normal distribution of biometric traits – into a
more general and dynamic model of the social structure.
Figure 2.2 illustrates how Pareto adapts the distribution of income as a general
representation of the social hierarchy. Again he has added an empirical ‘bottom’
to the graph of the mathematical function that is in part speculative as data for low
incomes are generally absent from the tax revenues series available to him. Pareto
explains the pronounced asymmetry of the income distribution on the analogy
of a teacher grading students on a scale from 0 to 20 (in the continental grading
system): there is a flattened bottom to the distribution of income because there is
a minimal level of income under which subsistence is not possible, just like the
teacher may be reluctant to give scores below 8/20 to avoid failing students. On
the other hand, there is no comparable limit to high incomes.
Pareto speculates that although the shape of the upper part of the income
distribution is strikingly similar across societies, there may be more diversity in
the lower part. In Figure 2.2, the horizontal line ak represents the minimum income
below which individuals cannot survive. In an agrarian society typical of classical
Antiquity, in which famines were frequent, the distribution may take the form
(I), with a high frequency of incomes just above the starvation limit. In modern
industrial societies where conditions of life for the lower strata have improved
and fewer people have incomes near that limit, the distribution may take the form
(II). The following passage reveals the dynamic character of Pareto’s vision of the
social structure (Manuel: 386–7, §§18–19).
28 Vilfredo Pareto

c c

C C
a'' l a'' l
B b B b
a' b' a' b'
A A
a k a k
h h

o (I) o (II)

Figure 2.2 Pareto’s comparison of social mobility processes across strata

within a society, and across different types of societies
Note: Distribution of income for an agrarian society of Antiquity (I) and an industrial
society (II). Income level is shown on the vertical (y) axis; strata A, B, and C are discrete
approximations of continuous income variation. Social selection is relatively weak in both
lower strata A and higher strata C; selection is highest in the middle strata B. In the agrarian
society (I) the lower stratum A represents a greater proportion of the distribution of income
than in the industrial society (II).
Source: Pareto 1909: 386, Figure 56; modified.

The area ahbc, [Figure 2.2], gives a picture of society. The outward form varies
little, the interior portion is, on the other hand, in constant movement; while
certain individuals are rising to higher levels, others are sinking. Those who
fall to [minimum subsistence level] ah disappear; thus some elements are
eliminated. It is strange, but true, that the same phenomenon occurs in the upper
regions. Experience tells us that aristocracies do not last; the reasons for this
phenomenon are numerous and we know very little about them, but there is no
doubt about the reality of the phenomenon itself.
We have first a region [A] in which incomes are very low, people cannot
subsist, whether they be good or bad; in this region selection operates only to
a very small extent because extreme poverty debases and destroys the good
elements as well as the bad. Next comes the region [B] in which selection
operates with maximum intensity. Incomes are not large enough to preserve
everyone whether they are or are not well fitted for the struggle of life, but they
are not low enough to dishearten the best elements. In this region child mortality
is considerable, and this mortality is probably a powerful means of selection. …
This region is the crucible in which the future aristocracies (in the etymological
sense: ἄριστος = better) are developed; from this region come the elements who
 Talents and Obstacles 29

rise to the higher region [C]. Once there their descendants degenerate; thus this
region [C] is maintained only as a result of immigration from the lower region.
… One important reason [for this fact] may well be the non-intervention of
selection. Incomes are so large that they enable even the weak, the ill-adapted,
the incompetent and the defective to survive.
The lines [between regions] serve only to fix ideas; they do not actually exist.
The boundaries of these regions are not sharply defined; we move gradually
from one region to the other.

Pareto’s discussion suggests that individuals located at different levels of the

social hierarchy have different opportunities for mobility. While later stratification
researchers often assume that opportunities decline monotonically from the
upper strata to the lower strata, so that individuals born to privileged milieus
have maximum opportunity, Pareto makes the rather different conjecture that
opportunity varies in a nonmonotonic, inverted U-shaped pattern along the social
scale, so that individuals in the middle strata have greater opportunity than those
in both the lower and upper strata. This prediction follows logically from Pareto’s
attention to the intensity of selection as a function of position in the social hierarchy.
Less talented individuals born to a high stratum are effectively prevented by the
absence of selection from ‘achieving’ the low social status corresponding to their
limited endowment. Conversely, talented individuals born to a low stratum –
where ‘extreme poverty debases and destroys the good elements as well as the
bad’ – are prevented by the impoverished environment from achieving the higher
social status corresponding to their superior endowments. In both upper and lower
strata opportunity for achievement is low, if one understands by ‘opportunity’ the
individual’s chances of achieving a status commensurate with one’s potential –
high or low given one’s intrinsic, innate qualities.
If one could measure the degree of opportunity of individuals along a status
dimension such as income one could test Pareto’s conjecture of curvilinear
variation in opportunity against the more traditional assumption of social
scientists that opportunity increases monotonically from lowest to highest
stratum. Conceptualizing and measuring opportunity for achievement, however,
are issues that are still partly unresolved (Guo and Stearns 2002; Nielsen 2006).
There is considerable evidence that the overall degree of social mobility varies
according to the curvilinear pattern conjectured by Pareto. It has been known
since Blau and Duncan (1967) that the dispersion of occupational statuses of
sons with fathers in middle status categories is greater than that of sons with
fathers in both higher and lower occupational categories. The same pattern is
found for both intergenerational and intragenerational mobility among wealth
categories (Bowles, Gintis and Osborne Groves 2005; Keister 2005). There is
also some evidence that the intergenerational elasticity of income (coefficient of
the regression of log income of sons on that of fathers) varies nonmonotonically
as a function of father’s income (Couch and Lillard 2004; Lillard 2001).
30 Vilfredo Pareto

Blau and Duncan (1967) explained the curvilinear pattern in terms of the
social distance among occupational groups, as individuals born to fathers
in middle strata are closer to a larger number of different categories than
individuals born to fathers in extreme categories – high or low – whose
movements are limited either above or below. Pareto’s alternative interpretation
of this pattern is that it results from higher intensity of social selection in middle
categories as compared to extreme ones, with greater mobility in the middle
strata resulting from more frequent and farther readjustments of current status
to that corresponding to intrinsic status-relevant characteristics of individuals.
The crucial empirical difficulty in adjudicating these hypotheses is that indices
of intergenerational occupational mobility – of the type Blau and Duncan used,
or measures of overall mobility among wealth quintiles, or estimates of the
intergenerational elasticity of income – do not control for possible differences
in the distributions of talents of individuals born to different occupational
categories. Therefore the patterns they reveal, while they indicate greater
overall mobility in the middle strata, cannot be simply interpreted in terms of
achievement opportunity (Eckland 1967; Nielsen 2006). I will come back to
this important issue in a later section.

Circulation of Elites and Social Revolutions

Previous sections outline the evolution of Pareto’s thinking on social stratification

from its roots in income distribution statistics by generalization to other aspects of
the social hierarchy. Economist Pareto turned to sociology for reasons having to do
with his view of human nature and the limitations he found in the rational model
of economics – a model he had himself greatly contributed to – in explaining the
full range of human behavior.3 In the Traité Pareto further extends the model of
the social hierarchy rooted in the distribution of income – as a distribution with a
relatively stable shape but within which individuals are in constant movement as
the result of selection processes – to the distribution of political power in society.
This extension corresponds to the theory of the circulation of elites, which is the
part of Pareto’s work with which sociologists are most familiar.
In a well known passage of the Traité (§§2027ff.) Pareto imagined rating the
capacity of each individual in all branches of human activity – business, poetry
writing, chess playing, seducing powerful men, thieving – on a scale of 0 to 10.
Individuals with high scores in any activity are deemed to be members of the
elite; those with low scores members of the nonelite. The governmental elite is the
subset of the elite comprising individuals who ‘directly or indirectly play a notable
role in government’ (§2032). As Pareto warned repeatedly, the distinction between

3  Pareto’s contribution to the rational model of microeconomics and the relation to

sociology are topics beyond the scope of this paper (Allais 1968; Marshall 2007; Nielsen
1972; Schumpeter 1951).
 Talents and Obstacles 31

elite and nonelite is made for convenience and these categories are not to be taken
as real groups: ‘As usual, to the rigor one would obtain by considering continuous
variations in the scores we must substitute the approximation of discontinuous
variation of large classes’ (§2031).
In the same way that the curve representing the distribution of income contains
and conceals the constant movement of individuals and families up and down
along the income scale, circulation takes place along the scale of political power.
The composition of the governing class, in particular, is constantly changing. Two
types of movement are possible: (a) a continuous infiltration of elements from the
governed class into the elite or (b) a sudden revolution replacing at once the major
part of the governing elite. Pareto’s image for the circulation of elites is that of a
slow-moving river with periodic floods (Traité, §2056):

As a result of the circulation of elites, the governmental elite is in a state of slow

and continuous transformation. It flows like a river; today’s elite is other than
yesterday’s. From time to time one observes sudden and violent perturbations,
similar to the inundations of a river. Afterwards the new governmental elite
returns to a regime of slow transformation: the river, back within its banks, is
flowing again steadily.

Under what circumstances do sudden transformations of the elite – revolutions

– occur? It is at this point that Pareto’s morphological schema, dealing with
matters of social stratification, connects with Pareto’s psychosocial schema
(Schumpeter’s 1951 term), which deals with Pareto’s theory of action and
of human nature (Lopreato 1965; Marshall 2007). Detailed discussion of the
psychosocial schema is beyond the scope of this article, but to simplify greatly,
Pareto used the concept of residues to mean sets of propensities to act in a
certain way. Thus, for example, one type of residue consists of a propensity to
use force, another of a propensity to use ideological means of persuasion. The
central mechanism is thus (Traité, §2057):

Revolutions take place because – either following a slowdown in the circulation

of the elite, or for some other cause – elements of inferior quality accumulate
in the superior strata. These elements no longer possess the residues that
would enable them to maintain themselves in power, and they avoid the use
of force. Meanwhile within the inferior strata elements with superior qualities
develop, who possess the residues necessary to govern, and who are disposed
to use force.

Pareto’s discussion suggests that a revolution is likely to occur under two distinct
sets of circumstances. First, a revolution may result from a slowdown or stoppage
in the circulation of elites, which renders the governing class incapable of
staying in power, because the aptitudes of individuals who have once achieved
membership in the governing class are not transmitted to their descendants, and a
32 Vilfredo Pareto

life of privilege protects the incapable from downward mobility. Pareto’s crucial
assumption here is that of the absence of effective intergenerational transmission
of governing talent; thus, ‘if human aristocracies were like choice breeds of
domestic animals, that reproduce a long time with about the same traits, the history
of the human race would be entirely different from what we know’ (Traité, §2055).
A second revolutionary scenario is that of a rapid circulation of the elite, but
one bringing to the governing class individuals or families selected according to
criteria other than those corresponding to aptitudes needed to maintain themselves
in power. An example used by Pareto is that of the ‘industrial protection cycle’
following introduction of industrial protection in a country. Individuals benefiting
from industrial protection – owners of protected industries, labor leaders, and
politicians allied with them – will be mainly individuals with an aptitude and
propensity for economic and financial activities. The governing elite is thereby
enriched with individuals who have a propensity to use ‘combinations’ – legal
and financial maneuvering and ideological persuasion – rather than force. Pareto
describes these behavioral propensities as residues of the first class. When the
proportion of elite members with these residues becomes too high, the elite may
no longer be able to maintain its political domination.
In both cases, a revolution occurs when an outside elite is able to mobilize a
sufficient segment of society to overthrow the elite in place and replace it at the
helm of society. The outside elite is rich in individuals endowed with residues
of the second class, a tendency to maintain ‘aggregates’, things or ideas that
are already combined together, such as a radical religious or political ideology,
together with the willingness to use force to achieve their objective. Pareto is under
no illusion that the overthrow of the old elite and its replacement by a new group
of contenders will fundamentally change the system. Indeed after the revolution
has taken place the victorious new elite will simply replace the old one and begin
oppressing and exploiting the rest of society in their turn.
Pareto’s account of revolutions differs strikingly from Marx’s. For Pareto
the revolution is not carried out by a class representing a large segment of the
population but by a relatively small elite, often composed of disaffected members
of the old elite, claiming to represent the interests of the majority of the population
or society as a whole. The ideology developed by the new elite is designed to
frame the struggle as one of the majority of society against the oppressing elite,
even though the outcome is simply replacement of one oppressor by another.
Remarkably Pareto, who was writing before the Russian Revolution, correctly
anticipated the debate about the dictatorship ‘of’ or ‘over’ the proletariat that was
to occupy the International Socialist movement contemporary of Lenin and Stalin.
Remarkably also Pareto’s guess concerning the social origins of the leaders of
social revolutions was largely correct, as contemporary research shows for the
Bolshevik Revolution (Riga 2008) and other social revolutions (Chirot 1986;
Goldstone 1991, 2001).
 Talents and Obstacles 33

Social Structure and Cycles of Mutual Dependence

In this section I discuss briefly the issue of the integration of Pareto’s model of
the social structure and the circulation of elites within his broader conception of
the social system and the cycles of mutual dependence that describe patterns of
events within the social system. This is a complex topic that deserves much more
attention than can be given here (Nielsen 1972; Powers 1987, this volume).
Pareto’s approach to modeling the social system in general as a system of
mutually interacting parts can also be better understood as deriving from his earlier
work in economics, particularly his mathematical formalization and refinement
of Léon Walras’s model of general economic equilibrium (Allais 1968; Bouvier
1999; Samuelson 1947; Schumpeter 1951), which was itself ultimately based on
models of physical systems with which Pareto was familiar from his training as an
engineer. In the Traité Pareto specifies the internal workings of the social system as
composed of four interacting elements (always aware that these are to some extent
arbitrary abstractions needed to represent reality, and not reality itself). These are:

a. residues reflecting sentiments and psychic states;4

b. interests or economic phenomena;
c. derivations or the myths, ideologies, or ‘culture’ of society; and
d. social heterogeneity and circulation of elites.

Pareto’s quadripartite depiction of the social system has had a perhaps unappreciated
influence on later theorizing in sociology (Lenski 1966, 2005; Parsons 1949, 1968;
Powers 1987).
In Pareto’s later work the model of social heterogeneity and mobility is
incorporated as one component of the larger social system. Pareto reckons that the
complex interdependent relationships between these categories of factors, while
typically consisting of reciprocal action and reaction, can sometimes be unraveled
in a first approximation as a sequence of causal relationships, which then in turn
produce reciprocal consequences. Pareto calls these sequences of causes and
effects cycles of mutual dependence.
The adoption of a tariff on imports of foreign industrial products, mentioned
earlier, provides one example of event that can initiate a cycle of mutual dependence.
Within the economic subsystem protection results in some destruction of wealth
(because of inefficiency corresponding to loss of comparative advantages), but
also in a transfer of wealth from consumers to the domestic producers of the taxed
goods, who now enjoy a temporary monopoly. Adoption of industrial protection
will also affect the social system beyond the economy, by favoring the ascent
of individuals with cunning and a gift for financial combinations (i.e., Class I
residues), who are able to curry the favors of politicians in order to benefit from

4  Pareto’s concept of residues is experiencing a revival in economics under the term

of ‘identity’ (Akerlof and Kranton 2000, 2005).
34 Vilfredo Pareto

protection. Such people will tend to become rich and powerful, rising into the
elite and changing its composition. These developments will in turn affect the
derivations, as theories justifying industrial protection flourish. Finally the elite,
enriched with individuals oriented to finance and industry, will affect the economy
in return, favoring further industrial development.
Besides the ‘industrial cycle’ just described, Pareto also discusses a ‘bellicose
cycle’ at work in a society in a state of enduring warfare. Here frequent warfare
will tend to enrich the elite with individuals with strong senses of honor and
duty, willing and able to effectively use violence and military might (i.e., Class II
residues). Here too the propagation of influences within the system will eventually
lead to an equilibrium state, as influences are attenuated by various circumstances.
The notions of industrial and bellicose cycles will later be integrated in Pareto’s
discussion of cycles of successions of ‘foxes’ and ‘lions’ in history.

Nature of Social Heterogeneity

I described earlier how Pareto envisioned the distribution of wealth and power
in any society in the shape of an arrowhead, with a very pointed tip and a broad
base tapering off quickly near the minimum subsistence level of income. While
the overall distribution is stable, there is considerable movement of individuals
upward and downward within the structure. Individuals are born with certain
innate qualities or talents – that we would today call genetic – which translate into
socio-economic success as a function of the ‘obstacles’ opposing their expression.
The disposition of obstacles depends on the socio-economic stratum. Even talented
individuals born to the lower strata are unlikely to rise because the environment
is too unfavorable, offering little opportunity for advancement. Selection is most
intense in the middle strata, corresponding to maximal opportunity for success as
well as failure. In these strata resources are sufficient to allow innate qualities of
individuals to express themselves, but they are not abundant enough to prevent
individuals with little talents to experience downward mobility. In the highest
strata resources are so abundant that untalented individuals are protected from
downward mobility. In these milieus individuals do not have the ‘opportunity’ to
sink to the lower level corresponding to their limited endowments.
This section discusses how Pareto’s model of mobility within the social structure
is consistent with, and illuminated by, recent research in economics and sociology
reassessing the role of genetic factors in intergenerational mobility in income
or occupational status (Solon 2009; Jencks and Tach 2006). This issue involves
the broader topic of the relation of Pareto’s thinking with biology, particularly
evolution and genetics, full treatment of which is beyond the scope of this chapter
(see Busino 1967; Nye 1999). Pareto, a Darwinian in his youth, had become
critical of Darwin’s theory of evolution at the time he wrote the Cours because
of what he saw as Darwinism’s teleological or ‘Panglossian’ implications – using
a term that was to be made immensely popular by later critics of sociobiology
 Talents and Obstacles 35

(Gould and Lewontin 1979). It is conceivable that Pareto also allowed for a direct
effect of the social environment on individual qualities, such that privileged elite
life by itself would cause degeneracy. This view would be consistent with the
contemporary French neo-Lamarckian ideas and the originally medical notion
of degeneration that were popular during the period – prior to the rediscovery
of Mendel’s work in 1900 and the first statement of the modern synthesis of
Darwinism and Mandelian genetics by Fisher (1918) – and influenced Pareto (Nye
1999). Pareto’s observation of the inability of elites to reproduce themselves is
consistent with the phenomenon of regression to the mean discovered by Galton
(1886), although Pareto does not cite him. As argued below, Pareto’s model of
social mobility is also strikingly compatible with Fisher’s (1918) modern genetic
model of the determination of individual traits.5
While Pareto, as noted by Schumpeter (1951), views innate differences among
individuals as a principal source of social heterogeneity, he does not conclude from
this that dominant classes are able to reproduce themselves across generations.
What impresses Pareto, on the contrary, is that the genetic qualities involved in
the socio-economic success of individuals are only imperfectly transmitted to
the offspring. Indeed ‘aristocracies do not last’. Because of the imperfect genetic
transmission of qualities relevant to socio-economic success, the innate abilities of
individuals often do not correspond to the social milieus where they are born (as
measured by the status of the family). It is these discrepancies between individual
abilities and social status of origin that generate social mobility in the form of the
dynamic adjustment of individuals to their innate potential.
Pareto thus conjectures an inverted U-shaped pattern of variation in opportunity
for mobility as function of social status such that opportunity for mobility is lower
in lower strata, greater in middle strata and, perhaps counterintuitively, also
lower in the higher strata of society. Pareto’s conjecture is illuminated and made
empirically testable by placing it within an emerging literature on the role of genes
in social mobility.
A vast literature on intergenerational mobility investigating the relationship
between the socio-economic status of children and that of their parents flowered in
sociology and economics, largely after Pareto’s time (e.g., Becker 1964; Blau and
Duncan 1967; Becker and Tomes 1979). While that literature often acknowledged
the possibility of genetic transmission of the traits that underlie socio-economic
success, it generally did not try distinguishing the role of genes and that of the
family environment in status inheritance (see however Eckland 1967; Jencks
1972; Taubman 1976). Recent reviews of the mobility literature find empirical
patterns suggesting that the root causes of individual differences in social mobility
outcomes, rather than pertaining to the adult worlds of higher education and
employment, are likely to be located early in the life-course and closely connected
with circumstances of childhood and the family of origin (Esping-Andersen 2004;

5  Another part of Pareto’s work, the theory of residues, makes him a precursor of
modern sociobiology, also connecting him to modern genetic thinking (Lopreato 1980).
36 Vilfredo Pareto

Morgan 2006). What could be these decisive mechanisms operating in early

childhood? Work emphasizing the implications of genetics for social mobility
began to appear in both fields in the late 1960s (Eckland 1967; Jencks et al. 1972;
Taubman 1976, 1977; see also Degler 1991). This tradition of research is currently
enjoying a revival which is leading to a major reassessment of the role of genes in
socio-economic success (Adkins and Guo 2008; Behrman et al. 1980; Behrman
and Taubman 1995; Björklund and Jäntti 2000; Björklund, Jäntti and Solon 2005;
Björklund, Lindahl and Plug 2006; Guo and Stearns 2002; Heath et al. 1985;
Jencks and Tach 2006; Nielsen 2006; Rowe 1994; Taubman 1995a, 1995b).
The new, genetically-aware research in social stratification and mobility
uses a variety of behavior genetic designs including comparisons of identical
and fraternal twins reared together, twins reared apart, and adopted children,
to distinguish three components of the variation in an individual trait, called
a phenotype, such as cognitive ability, education or occupational status, that
predicts or reflects socio-economic success. Heritability in the broad sense,
denoted h2, is the proportion of phenotypic variance attributed to all causes of
genetic variability. The shared environment, denoted c 2, is the proportion of
variance in a measure of socio-economic success attributed to all environmental
factors that vary between families and that tend to make siblings raised in the
same family similar on the trait. The shared environment comprises all influences
related to social class, the neighborhood of residence, the quality of local
schools, and ethnic culture. Finally the unshared (or within family) environment
e2 represents the combined effect of factors that tend to make siblings different
on the trait. These include events (such as an accident or disease, or an encounter
with an inspiring role model) that occur to one sibling and not the other, and any
variable that differentially affects the trait in the siblings, such as birth order or
a parental preference for one sibling over the other.
Empirical studies of the role of genes are based on data for relatives who differ
in their degree of relatedness. A common and powerful design is the classical twin
study, based on monozygotic (MZ) and fraternal or dizygotic (DZ) twins. The
basis data are the correlations for a trait related to socio-economic success, say
high school grade point average (GPA) for the sake of illustration, for samples
of identical (MZ) and fraternal (DZ) twins, denoted rMZ and rDZ, respectively. The
three parameters of the behavior genetic model relate to the correlations as follows.

r
MZ = h2 + c2

r
MZ = ( 12 ) h2
+ c2

1 = h2 + c2 + e2

The first equation represent the correlation between MZ twins as the sum of the
heritability h2 (as MZ twins share the same genes) and the effect c 2 of the shared
environment. The correlation for DZ twins is composed of the shared environment
 Talents and Obstacles 37

c 2 plus 1/2 h2, as DZ twins share only half their genes. The third equation in the
set follows from the assumption that the variance of GPA is standardized to unit
variance. With these relationships heritability h2 may be estimated as twice the
difference between the correlations for MZ and DZ twins, as

h2 = 2 ( rMZ – rDZ )

Once we have h2, we can derive the shared environment c 2 from the first equation
by subtracting h2 from rMZ as

c2 = rMZ – h2

Finally the contribution e2 of unshared environmental factors is recovered from

the third equation as
e2 = 1 – h2 – c2

For example Nielsen (2008) reports correlations rMZ = .660 and rDZ = .332 for
GPA for samples of adolescent twins. Using the equations above we can estimate
heritability h2 for GPA as 2(.660 – .332) = .656; the shared environment c 2 as
.660 – .656 = .004; and the unshared environment e2 as 1 – .656 – .004 = .340.
In this case the estimates suggest that the bulk (66 percent) of the variation in
GPA is due to genes and most of the rest (34 percent) is due the idiosyncratic
factors composing the unshared environment, with essentially zero (.4 percent)
contribution of the shared environment.
Such a pattern of high heritability and small effect of the shared environment
is commonly found in samples of older adolescents or adults for a variety of traits
reflecting, or predictive of, socio-economic success (Freese 2008; Turkheimer
2000). In the case of intelligence (IQ), recent research has found a systematic
pattern of change over the life course in the components of IQ variance. Heritability
is typically about 45 percent in childhood, with the shared environment accounting
for 35 percent of the variation. Heritability rises during adolescence, and the
shared environment declines, until in late adulthood heritability reaches over 80
percent, and the shared environment component vanishes. Throughout the life
course the unshared environment (which includes measurement error) accounts
for some 20 percent of the IQ variance (Boomsma et al. 2002; Jensen 1998). This
life-course pattern is consistent with Pareto’s model of individuals adjusting over
the life course to a level determined by their innate qualities. Early measures of
individual achievement (as measured, say, by IQ or GPA in childhood) would
still be substantially affected by social origins, while measures later in life, after
individuals have adjusted to their innate endowment levels, would reflect genetic
endowment to a greater extent, corresponding to the larger heritability estimates
found in late adulthood.
38 Vilfredo Pareto

Change in the relative importance of genes in the determination of a trait over

the life course, measured as heritability, is one instance of a more general process
of interaction between genes and environment. This phenomenon, denoted G × E,
occurs when a characteristic of the family environment, such as socio-economic
status, moderates the expression of genes so the relative values of the variance
components are changed. Child development psychologist Scarr-Salapatek
(1971), writing in the context of IQ research, reasoned that environments can
differ in the overall degree to which they allow expression of the native potential
for intellectual development in the determination of intelligence: some rearing
environments may be so deficient in resources that even a child with high native
intelligence will fail to develop high IQ. Thus heritability h2 is a function of, and
reflects, the degree to which the environment is conducive to the expression of
innate potential. If one could measure heritability of the same trait (such as IQ)
in environments that vary along a resources gradient, one would find that h2 is
not constant but increases as a function of environmental resources. In other
words, there is an interaction between genes and environment, such that the level
of environmental resources affects the extent to which the genes are expressed
into the phenotype. In rearing environments characterized by an abundance of
resources h2 will be high, with much of the variation among individuals related
to their different genetic endowments; but h2 will be low in environments with
insufficient resources, and c2 will be correspondingly high.
Scarr-Salapatek’s (1971) discussion of G × E is illustrated in Figure  2.3.
Panel (a) depicts the assumption that heritability h2 is constant (set at .5 for
illustration purpose) over the range of environmental resources – an assumption
often necessitated by data limitations precluding estimation of, rather than
deriving from a substantive belief in an absence of interaction. Heritability
h2 (measured on the vertical axis) traces a horizontal line as environmental
resources vary from low to high on the horizontal axis. Panel (b) is a schematic
representation of Scarr-Salapatek’s G × E conjecture: heritability h2, measuring
the level of expression of the genotype, increases monotonically from a low
value in impoverished environments to a high value in environments with
sufficient resources to permit expression of genotypic differences. Later
research in developmental psychology, acknowledging that the relationship of
h2 with environmental resources may not be linear, developed the alternative
model illustrated in Panel (c): heritability increases rapidly with resources over
a range of poverty below a threshold. Once the resources level passes into a
‘humane range’ of environments above this threshold, increasing resources no
longer induce increased heritability (Rowe 1994).
Scarr-Salapatek’s (1971) G × E model, originating in her study of child
intelligence, has been extended to other aspects of socio-economic success. Heath
et al. (1985), for example, show that liberal reforms in the Norwegian system
of education after World War II resulted is a trend of increasing heritability of
educational attainment, measured as the chance of achieving higher levels of
education, at least for men. Earlier-born male cohorts, who experienced a less
 Talents and Obstacles 39

(a) (b)

1.0

1.0
Heritability

Heritability
0.5

0.5
0.0

0.0
Resources Resources

(c) (d)
1.0

1.0
Heritability

Heritability
0.5

0.5
0.0

0.0

Resources Resources

Figure 2.3 Four concepts of the interaction of genes with environmental

resources in socio-economic success
Note: The figures show heritability (h2) of socio-economic success as a function of
environmental resources. (a) No interaction; (b) Environmental resources have a linear
effect on gene expression (h2) (Scarr-Salapatek 1971; Heath et al. 1985); (c) Tapering effect
of environmental resources on h2 within the ‘humane range’ above the threshold of severe
deprivation (dashed line); (d) Curvilinear effect of environmental resources on h2 with
maximum in middle range implied by Pareto (1909).

meritocratic system of education, are characterized by lower h2 and a higher

value of c 2, suggesting that between family environmental differences, such as
those related to social class, were still most influential for these cohorts. Later-
born cohorts have higher heritability and a lower shared environment component,
suggesting higher returns to native ability and lower impact of social origins on
educational attainment. However heritability remains lower for later-born cohorts
of women, suggesting that women have not benefited from educational reform to
the same extent as men. The G × E model has been fruitfully used in assessing
differences in opportunity regimes not only across historical periods and by gender
in the same society, but also across ethnic groups and social classes, and societies
40 Vilfredo Pareto

at different levels of development, or characterized by different political regimes

(Adkins and Guo 2008 and literature cited in Nielsen 2006).
Pareto’s model of the mobility of individuals within the social structure
as a function of both innate endowment and the disposition of ‘obstacles’
to mobility as a function of social stratum can be interpreted in G × E terms.
Pareto’s model is shown in Panel (d) of Figure  2.3 where the horizontal axis,
as before, represents environmental resources corresponding to different strata of
origin of the individuals. Heritability or, as Pareto would put it, the ‘expression
of eugenic qualities’, is low in the lower strata where resources are insufficient
to permit talented individuals to rise; heritability increases toward the middle
strata where the strength of selection is greater, causing individuals to rise and
sink as a function of their innate abilities; heritability decreases again in higher
strata where resources are in such abundance that even less capable individuals
are protected from downward mobility. These differences among strata produce
the inverted-U shaped trajectory shown in the graph. Pareto’s model of the social
mobility process thus implies a specific hypothesis on the shape of the relationship
between environmental quality and the heritability of socio-economic success. As
one moves from lower to higher strata heritability describes an inverted U-shaped
trajectory, increasing at first to reach a peak in middle strata, and then declining
again in higher social strata.
Pareto’s conjecture of the inverted-U shaped relationship of heritability
with environmental resources can be tested with the statistical tools available to
behavior geneticists. This requires genetically-informative data, such as samples
of MZ and DZ twins, from families spanning a wide range of socio-economic
status. Quite independently of Pareto’s work, some research results are suggestive
of such a curvilinear relationship, e.g. for the heritability of intelligence in
children (Turkheimer et al. 2003). Obtaining sufficient data for the descending
part of the heritability curve in high status regions may be particularly difficult,
as the descending part (represented as symmetrical in Figure  2.3, Panel (d) for
illustration purposes) may in fact be restricted to very high, and thus sparsely
populated, strata. This difficulty may be compounded for such dimension of status
as political power, which we don’t really know how to measure but is likely to
be distributed in a very unequal fashion, perhaps more so than income or wealth.
While one can easily think of instances of political families and even dynasties,
such as the Kennedy’s or the Daley’s of Chicago, the likelihood of obtaining
sufficient numbers of twins from such rarefied circles is probably small.
Pareto’s anticipation of the modern notion of G × E represents an important
contribution to our understanding of social mobility processes, in part because of
the way it avoids a conceptual error of later generations a researchers who have
tended to adopt an asymmetric notion of ‘opportunity’ as referring exclusively
to upward movement in the social hierarchy. With his habitual lucidity Pareto
recognized that opportunity represents achievement of native potential and thus
cuts both ways: downward as well as upward, a notion that has only recently been
voiced clearly in mainstream stratification research (Guo and Stearns 2002; Jencks
 Talents and Obstacles 41

and Tach 2006; Nielsen 2006, 2008). Because of the positive connotations of
‘opportunity’, many social scientists remain instinctively reluctant to understand
the term as opportunity for failure as well as for success.

Discussion and Conclusion

This chapter has focused on Pareto’s contribution to the study of social

stratification and mobility. I have argued that Pareto’s thinking on these topics
is best understood as forming a thread that begins in the more purely economic
conception of the distribution of income as presented in the Cours. The intuition of
the Manuel is that the long-tailed distribution of income provides a representation
of the social structure in general, as a slow-changing framework of inequality,
largely impervious to many policy changes, within which individuals move
up and down. The Traité amplifies the economic model to the political in the
theory of the circulation of elites and later integrates the model of social mobility
and of the circulation of elites as a component of the system of mutually dependent
parts that constitutes Pareto’s conception of the social system, a model that would
influence later theoreticians as diverse as Lenski (1966, 2005), Parsons (1949),
and Powers (1987).
Looking at the whole span of Pareto’s contribution in this way reveals that
Pareto’s work contains a coherent theory of social stratification and mobility much
more general than the sole circulation of governmental elites which constitutes its
best known aspect. I have described the central role played in Pareto’s schema by
the inability of elites to reproduce in their children the same levels of moral and
intellectual qualities that had originally gained them a place among the ranks of
the aristocracy. The resulting discrepancies, associated with genetic regression to
the mean, then fuel in each generation a vast process of social reshuffling through
vertical mobility of individuals, as their status adjusts to a level corresponding to
their innate abilities. The associated selection processes, however, are modulated
by social strata – selection is most intense in the middle strata, and weaker both in
low strata where deprivation suppresses even the best elements and in high strata
where the less able may be protected from downward mobility.
I have shown that Pareto’s discussion of the way individuals are selected on
the basis of their innate characteristics with different intensity depending on their
location in the social structure is consistent with, and prefigures, behavior genetic
models of genes-environment interactions in the impact of genetic endowment on
social status, which are currently being developed at the interface of economics,
sociology and behavior genetics (e.g., Jencks and Tach 2006).
This brief discussion of some aspects of Pareto’s work on social stratification
and mobility serves to illustrate the continued relevance for this field of the social
sciences of a scholar whose exceptional imagination coupled with scientific rigor
has so often vaulted well ahead of his time.
42 Vilfredo Pareto

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 Chapter 3
The Role of Sticking Points in Pareto’s
Theory of Social Systems
Charles Powers1

An important (and still underappreciated) aspect of Pareto’s theoretical framework

took shape in the final decade of his life. In his final years, much of Pareto’s attention
was focused on the fact that “social systems” sometimes arrive at equilibrium
sticking points; points where dysfunctional outcomes are reproduced for extended
periods of time. In other words, social system processes can sometimes unfold in
ways that bring change to a virtual standstill (for a time), even if the status quo has
appreciable negative consequences. Thus, by taking account of sticking points,
Pareto both anticipated and explained maladaptive equilibrium outcomes. This is
theoretically quite important, because Pareto’s treatment of sticking points brings
greater clarity to his otherwise rather ambiguous conceptualization of “social
systems.” And in practical terms, Pareto’s analysis of sticking points can explain
societal procrastination in the face of serious problems.
Pareto devoted much of his life to developing an empirically informed
theoretical framework for understanding significant socio-economic and
political change (Pareto 1916/1935: §145). And by the time he completed his
final monograph, Pareto felt he had achieved some measure of success in this
regard.

We began with an examination of empirical events and drew some indications.

What emerges is a general theory of social change. It seems likely that we have
obtained worthwhile insights about the transformation through which societies
move (Pareto 1921/1984: 71).

The focus of this chapter is on some insights in Pareto’s final works from which
we can continue to learn.
At least in Pareto’s own view, he was able to bring his dream of a predictive
theory of social system change to fruition. He explicitly said this as he began his
appendix to his final work (The Transformation of Democracy).

1  An earlier version of this chapter was presented at the eighth annual Social Theory
Forum, Boston, April 13–14, 2011. Alasdair J. Marshall and Jonathan Turner provided very
helpful comments on earlier drafts.
48 Vilfredo Pareto

Chapters of The Transformation of Democracy were published in serialized

form between May 20 and July 20, 1920. Current events prove the prophetic
nature of these chapters. These confirming events have come even earlier than
I would have predicted. In turn, verification of the deductions presented in
the earlier chapters of this monograph establishes the accuracy of my broader
theory as set forth in Treatise on General Sociology. Since Treatise on General
Sociology was written, actual events have followed along something like
a continuous curve, just as predicted. It appears that this curve will extend
itself into the future, allowing us to forecast unfolding events before they occur
(Pareto 1921/1984: 73).

In the pages which follow, this chapter validates Pareto’s assessment by drawing
attention to the theoretical significance of sticking points, which took on more
importance as Pareto’s theoretical framework evolved in the final ten years of
his life.

At Odds with his Times, Were Many People Listening to Pareto in his Last
Years?

Pareto was at odds with the prevailing social science trends of the time. This
resulted in his work being dismissed even before it was adequately understood.
This is why his work (especially his last work) is still worth revisiting almost
a century after his death. Pareto’s final years were the occasion of significant
development of some of his most important theoretical ideas.
Looking with hindsight at the intellectual currents dominating twentieth
century social science investigation, we can see that Pareto’s long and illustrious
career ended with scholarship that ran counter to prevailing trends:

1. throughout the twentieth century, the work of individual social science

scholars tended to become more narrowly specialized into isolated
disciplines and still more isolated subdisciplines; and
2. as the twentieth century unfolded, there was also a growing tendency to
disconnect comprehensive theorizing from carefully detailed empirical
description.

These two trends (disciplinary isolation and separation of data gathering from
grand theorizing) were already underway at the time Pareto was writing his
crowning work, Treatise on General Sociology (1916/1935), hereafter referred
to as Treatise (although all quotations are taken from the 1935 English translation
which appeared under the title Mind and Society). Pareto’s dissention from the
mainstream, combined with his awkward use of terminology and laborious
writing style, help explain the lack of receptivity of twentieth century social
 The Role of Sticking Points in Pareto’s Theory of Social Systems 49

scientists to striking developments advanced by Pareto late in life. Thankfully,

the twenty-first century is already proving more receptive to Pareto (e.g.,
Marshall 2007; Femia 2006).
Pareto’s disillusionment with twentieth century social science trends (trends
toward narrow disciplinary isolation and increasing separation of theoretical
activity from the research enterprise) are clearly in evidence in Treatise and in
Transformation. Illustrative of his thinking about disciplinary isolation and
separation of theory from grounded empirical reality, Pareto noted:

… economists today are aware that the results of their science are more or less
at variance with concrete fact, and are alive to the necessity of perfecting it.
They go wrong, rather, in their choice of means to that end. They try obstinately
to get from their science alone the materials they know are needed for a closer
approximation to fact; whereas they should resort to other sciences and go into
them thoroughly—not just incidentally—for their bearing on the given economic
problem (Pareto 1916/1935: §2022).

Thus, Pareto understood disciplinary isolation and a separation of theoretical

activity from grounded empirical investigation to be antithetical to the scientific
enterprise.
Readers of Transformation (1921/1984) immediately sense Pareto’s
disillusionment about public response to Treatise (1916/1935), for Pareto
begins Transformation by noting that his goal is to distill his latest and most
significant insights from Treatise into more concise form. One can presume
his goal was to make what he regarded as his most important insights easier to
follow.

… social processes take a long time to complete. My previous effort to conduct

this kind of inquiry fills Treatise on General Sociology. I will therefore be
obliged to make frequent reference to that work. And in order to save readers
from having to familiarize themselves with that work in complete detail, I will
preface this study with some relevant findings (Pareto 1921/1984: 25).

Transformation was, in this respect, Pareto’s own effort to consolidate and more
clearly convey important theoretical insights he had attempted to drawn from all
the historical detail introduced in Treatise.

Empiricists, in order to explain existing phenomena, look for past phenomena

which are exactly alike. But like phenomena are not and cannot be found because
history never really recurs. Infinite combinations can arise from the elements of
human action, and history only chronicles such combinations.
Social order is never perfectly still: it is in perpetual motion. But
metamorphosis can occur at different speeds. It can be observed in ancient
50 Vilfredo Pareto

times in Sparta as well as in Athens, and in modern times in China as well as in

England. The difference is that change can occur at a slow pace as in Sparta or
China, or motion can proceed quickly as in Athens or England. Moreover, such
differences can characterize the same country at different points in time (Pareto
1921/1984: 26–7).

Given Pareto’s own words on the matter, it seems reasonable and appropriate to
regard Transformation as not only Pareto’s final theoretical statement, but as a
self-conscious effort to advance what Pareto believed was his most mature attempt
to make theoretical sense of social system change.

Distinguishing Pareto from Durkheim

Many of Pareto’s contemporaries were also interested in societies as social

units. Among the greatest was Durkheim, whose work predated both Treatise
and Transformation. This makes Durkheim a useful starting point from which
to assess the significance of Pareto’s last writings (volume four of Treatise and
Transformation) for the theoretical contribution they make.
In using societies as units of analysis, Durkheim (1895/1966: Chapter 1)
posed a litmus test question for sociologists to answer. Why not be satisfied with
psychology? Why does there need to be more to social science than a broadly
informed version of psychology has to offer us? Durkheim’s answer to this
question was that social entities (“superorganic” units made up of many people)
have emergent properties which are not entirely reducible to the study of individual
people. Nor are they entirely explainable in terms of the aggregation of behaviors
and beliefs of the multiplicity of people making up the social whole. Thus, if social
systems are real enough to be considered distinct units of analysis, they must be
understood to have emergent properties and processes, sui generis. In essence,
Durkheim argued that, with the obvious exception of psychology itself, the heart
of the other social sciences must reside in what each discipline teaches us about
properties and processes of emergent organizational forms which are not strictly
reducible to the study of individual people or the aggregation of individual people.
Durkheim’s writings remain relevant because his work suggests a possible
explanation for broad institutional developments. For Durkheim, “society:”

1. is composed of institutionalized legal codes and other arrangements people

are expected to comply with (Durkheim 1893/1964); and
2. is symbolically embodied and ritually reinforced by cultural understandings
people are expected to adhere to (Durkheim 1912/1951).

In Durkheim’s view, societal forms can be expected to evolve in response to

societal needs, in the sense that (he believed) cultural beliefs and institutional
 The Role of Sticking Points in Pareto’s Theory of Social Systems 51

arrangements develop to help society meet current challenges. This line of

reasoning is predicated on the twin assumptions that social systems:

a. have systemic awareness of needs; and

b. undergo change to better meet those needs.

Unfortunately, Durkheim’s reasoning was often teleological, subtly convening the

notion that the status quo must be good (even if we do not quite appreciate how
it is good) in as much as the status quo is presumed to have evolved to meet the
real needs facing a social system. Pareto is read by some to agree with Durkheim,
in the sense that equilibrium typically holds a society close to states which are
normal for that society.

The system changes both in form and in character in course of time.

When, therefore, we speak of ‘the social system’ we mean that system taken both
at a specified moment and in the successive transformations which it undergoes
within a specified period of time… Let us imagine that some modification in
its form is induced artificially … At once a reaction will take place, tending to
restore the changing form to its original state as modified by normal change.
If that were not the case, the form, with its normal changes, would not be
determined but would be a mere matter of chance (Pareto 1916/1935: §2066–7).

This is a very important passage, for it establishes that Pareto’s primary theoretical
goal was to identify systemic properties and processes which make the course
of social change predicable. But does this passage also suggest that equilibrium
solutions are functional, as Durkheim was inclined to assume?
Clearly, a careful reading of Pareto (1916/1935: §2066–7) cannot be taken to
discount the possibility that a social system can settle at equilibrium points that are
functional, or positive in terms of their intermediate-term balance of consequences
for the social system as a whole. But, by the same token, a careful reading of Pareto
also leaves open the possibility that the countervailing forces at work within a
society can settle for a time at dysfunction sticking points. Pareto (1916/1935:
§2066–7) does not preclude the possibility of dysfunctional equilibrium solutions,
and this is an important difference between Durkheim and Pareto.
It is true that Pareto tried to avoid judging a generic form of government, such
as democracy, as either good or bad. But he did believe we could assess a particular
social system or a particular government as, at some specific point in time, being
either efficacious or dysfunctional in its response to sets of challenges. In the passage
which follows, we see Pareto taking care to distinguish generic forms (such as
monarchy), which should not be generically judged as always functional or always
dysfunctional, from specific times and places, which should be empirically judged
on the basis of the efficaciousness of the equilibrium solutions arrived then and
there. The equilibrium Pareto kept calling reader attention to in Transformation is
52 Vilfredo Pareto

a cycle (regardless of government form) alternating between periods when holders

of institutionalized offices of governance exercise meaningful public authority and
regulatory oversight, and periods when special or private interests are generally
able to act with impunity.

It does not really matter whether central power is monarchial, oligarchic, or

popular in form. For ‘sovereignty’ is a word that ceases to have much meaning
as central power crumbles and covers the country with its debris. When central
power crumbles the power of some individuals and some collectivities will
grow. These collectivities remain subordinate in theory to the seat of central
government. But in practice they gain autonomy. Those who do not belong to
such collectivities are weak. No longer protected by the sovereign, they must
look elsewhere for protection and adjudication. They can either trust a powerful
patron, enter into secret or public partnerships with other weak people, or join
associations, communes, or trade unions.
Movement in this direction inevitably generates a reaction in the opposite
direction. Reaction occurs because protection gradually turns into subjugation.
The number of adversaries to the existing order grows as a result… At the same
time, rivalries among loci of decentralized power grow as their fears of central
power diminish. These rivalries frequently end in open conflict and anarchy.
Centripetal force gains momentum under this combination of circumstances
(Pareto 1921/1984: 41).

Thus, Pareto’s insistence that we need to refrain from judging a general form of
government in the abstract did not prevent him from noticing that a particular
social system’s institutions for governance work better during some periods than
others.
By the end of Pareto’s life he was quite emphatic in pointing out what he
regarded as dysfunctional outcomes arrived at through equilibrium dynamics.

Whether government programs will have useful or noxious consequences

will be determined with the passage of time. It is difficult to make absolute
judgments about the things a statesman says and does. Actions should be
assessed contextually… On the other hand, it is necessary to determine if the
measures adopted were the best options available to government functionaries
(Pareto 1921/1984: 77).

One can surmise from this passage, which is almost the last thing Pareto wrote for
publication, that his final and most evolved conceptualization of social systems
considered institutions of governance to be critically important, and Pareto
considered the functionality of government action to be problematic rather than
a foregone conclusion. This put Pareto, at least the late Pareto, squarely at odds
with Durkheim.
 The Role of Sticking Points in Pareto’s Theory of Social Systems 53

The specific details introduced throughout Transformation provide concrete

illustrations of the fact that Pareto’s theory, as it evolved near the end of his life,
was focused largely on institutions of social system governance and social system
movement through successive periods of greater functionality/resilience and lesser
functionality/resilience in the face of challenges.

Many governments have been weakened or destroyed by their inability to raise

needed cash. The English Commons and the Estates-General in France were
convened by sovereigns in need of financial resources. Sovereigns were in need
principally because of war, pensions, and in modern times, public debt. Had
they had the force and will to cut expenses, they could have avoided that need
and the dependency which resulted from it… Our own government lacks both
the will and the power. It is therefore in very serious trouble that may spell its
ruin. Current circumstances favor the ascendance of a new social order (Pareto
1921/1984: 50–51).

Pareto believed that dysfunctional outcomes eventually lead to change. But change
sometimes only comes about through a long and tumultuous process. At the heart
of this phenomenon is a shifting balance between robust government authority and
individual or special interest autonomy (Pareto 1921/1984: 30).
In contrast with Durkheim’s more or less explicit position that a society can
be assumed to evolve features for its own (societal) functionality and in its own
(societal) well-being, Pareto’s final work focused on the societal processes and
pressures that can result in changes (programs, policies, resource redistribution,
reconfiguration of efforts) that are detrimental to society in a short or intermediate
time span, while impeding changes which would be advantageous for society. This
is because any equilibrium results from a tug-of-war of competing interests. The
more control which special interests are able to exert over society’s institutions,
the more likely that the give and take of equilibrium processes will produce
solutions which are detrimental in terms of social system resilience in the face of
future challenges.
Viewed in this light, Pareto’s equilibrium theory of “social systems” simply
does not presume that a society will arrive at what are optimal solutions from the
vantage point of the society as a whole. Pareto is, in fact, rather pessimistic about
the way “social systems” work. Hence, Pareto explains variable outcomes without
ever resorting to the kind of teleological reasoning Durkheim too often relied on.

Pareto’s Reason for Writing The Transformation of Democracy

As Pareto approached the end of his life, he was deeply frustrated by the fact that
most readers failed to truly understand the intellectual agenda he had pursued
in his Treatise on General Sociology (1916/1935) or adequately appreciate the
progress he had made on that agenda. It was in this context that he embarked on
54 Vilfredo Pareto

a final attempt to more accurately convey his agenda and leave a clearer though
condensed synopsis of his theory of social system change in its final and most
theoretically mature form, although not it its most fully detailed exposition. This
effort at a clearer though condensed synopsis took form as a series of journal
articles Pareto began to write in late 1919, when he was already 71 years of age. A
total of four journal articles were published in serialized between May and July of
1920. To these, an Appendix was added in October 1920, and the five papers were
published together as a monograph, The Transformation of Democracy, appearing
in 1921 (and translated into English in 1984).
By the time Transformation was written, Pareto was in failing health and
approaching the end of his life. The Transformation of Democracy would be his final
statement as a social scientist. Pareto certainly understood the intellectual finality
of this effort. In this sense it seems reasonable to consider The Transformation of
Democracy as a kind of intellectual last will and testament.
To a casual reader, The Transformation of Democracy could be misread as a
jaded reflection on early twentieth century politics in Italy (when Italy was on the
verge of being overtaken by Mussolini’s fascism), with some notes on historical
parallels to earlier times. But the brief snapshots Pareto offered in Transformation
were not intended as a detailed analysis, but instead, are a vehicle for conveying, in
shorthand form, something much bigger and much more ambitious. Pareto’s goal
was to clarify and convey his final (most theoretically powerful) framework for
societal analysis. In it, Pareto sought to reveal society as a “social system” having
features which, over time, variously promote or resist change. He wanted, in other
words, to illuminate the role of feedback mechanisms in variously motivating
social change (including certain times when change is dysfunctional for the social
system at large) and retarding social change (including certain times when change
would be functional for the system at large).
In The Transformation of Democracy, Pareto writes about contemporary (early
twentieth century) events in Italy as a convenient shorthand way of revealing
certain systemic properties and processes characteristic of social systems. Social
systems perhaps most vividly reveal their systemic character by the ways in which
equilibrium processes sometimes produce bad outcomes for prolonged periods
(Pareto 1921/1984: 26–7). In other words, the “social system” theory in Pareto’s
work describes how, and explains why, equilibrium dynamics often arrive at, and
for extended periods of time can lock into, dysfunctional sticking points.

Pareto’s Nuanced Understanding of “Social Systems”

Pareto was disappointed by the fact that most readers of Treatise on General
Sociology failed to appreciate the progress he had made toward the development
of a robust, powerful, predictive theory of social system change. He should not
have been surprised, however, because Treatise has several flaws characteristic of
 The Role of Sticking Points in Pareto’s Theory of Social Systems 55

a work in progress. Perhaps most catastrophic of these flaws is that the key term
“social system” is never clearly defined in a single place.
What Pareto did try to introduce as a concise definition (Pareto 1916/1935:
§2066) was a rather vague and aimless statement appearing at the beginning of
volume four, when Treatise was far from complete and writing Transformation
was still several years away. Fortunately, at different points sprinkled throughout
volume four of Treatise and Transformation, Pareto offers a number of specific
insights that provide tangible indications of what he meant by a “social system” as
his career was ending.
Readers who put these various insights together will find that Pareto offers
us an understanding of “social systems” which is surprisingly detailed and
nuanced. Taken together, these insights might reasonably be judged to complete
the ambitious agenda Pareto had set for himself. Four interrelated points are
particularly important. First, not all social aggregates are what Pareto meant by
“social systems;” at least not in the way he used that term near the end of his life.
Modern scholars should consequently consider the wisdom of applying Pareto’s
later theoretical insights (explored in this chapter) only to entities that are “social
systems” the way Pareto used that term in his final years. Second, equilibrium
dynamics provide a key for understanding how social systems change systemically
over time. The concept of equilibrium enables us to take account of the shifting
balance of countervailing forces variously resisting change or promoting it in the
structure of the system itself. Third, an important part of Pareto’s social system
theory can appropriately be thought of as a theory of aftershocks. Pareto’s attention
was riveted on the ways in which the forms and features of a social system exert a
determining influence on system response to external shocks. This means, fourth,
that Pareto’s concern was centered on the nature of endogenous processes rather
than on the character of exogenous shocks.

Not all Social Aggregates are Social Systems

Pareto had a well-trained scientific mind. It was not satisfying for him to claim
the existence of “social systems” without thinking about what that implies. For
Pareto, the existence of a “system” necessarily suggests that an entity is composed
of interdependent elements having impact on one another in understandable,
and therefore predictable, ways. This basic definition of systemic character is
clear even in Pareto’s earliest work (Pareto 1869/1952). But over course of the
six decades that followed, there was considerable evolution in Pareto’s thinking
about the properties and processes which are important to take into account when
building a theory of social systems.
By the time Pareto was writing volume four of Treatise (which, based on
footnotes and textual clues seems to have been primarily 1914), and certainly by
the time Pareto was writing the essays which were to appear in Transformation
(which we know to have been primarily in 1919 and 1920), it is striking how much
his focus had moved to governance mechanisms. Governance mechanisms, which
56 Vilfredo Pareto

had previously received very little of his attention, were a dominant concern in the
last decade of his life. By then Pareto was emphasizing that an important source
of social system predictability is to be found in the ways those having governance
authority process information and formulate and implement decisions.
For a society, or for that matter any other social entity, to be what Pareto
regarded as a “social system,” at least in the way he tended to use that term in the
final decade of his life, it must be more than an aggregation of people who happen
to jointly occupy some geographic territory and share some attributes of language,
lifestyle, and cultural beliefs. Territorial proximity, common language, and shared
beliefs may be enough to warrant using the label “society” in anthropological
terms, but do not capture the essence of “social system” as Pareto was employing
the concept at the time he wrote The Transformation of Democracy.
Examples in Transformation draw attention to governance structure linking
people in different locations through regularized arrangements for making
decisions and taking authoritative action. Although a culture zone lacking a
government may reasonably be called a society in anthropological terms, a culture
zone lacking an institutionalized system of governance is not the same kind of
social entity Pareto theorized about in his final years. This suggests, by weight of
example, that before his death, governance structure had become central to the
way Pareto distinguished social “systems” from other social entities.

An Equilibrium Framework

It is clear that Pareto’s theory of social systems is an equilibrium theory. Repeating,

here, a quotation which is often the subject of discussion among scholars of
Pareto’s work:

The state of equilibrium. If we intend to reason at all strictly, our first obligation
is to fix upon the state in which we are choosing to consider the social system,
which is constantly changing in form. The real state, be it static or dynamic, of
the system is determined by its conditions. Let us imagine that some modification
in its form is inducted artificially (virtual movements, §130). At once a reaction
will take place, tending to restore the changing form to its original state as
modified by normal change. If that were not the case, the form, with its normal
changes, would not be determined but would be a matter of chance (Pareto
1916/1935: §2067).

This chapter will demonstrate that Pareto did a reasonably good job of completing
this intellectual agenda. By the end of his life, he had come to understand social
systems as having constantly changing character involving equilibrium movement
back and forth between periods of consolidation and erosion of authority as
exercised by those occupying governance roles. This theme is the singular focus
of chapter two but pervades all of Transformation.
 The Role of Sticking Points in Pareto’s Theory of Social Systems 57

It is very important that we stop to consider what this suggests in terms of

Pareto’s late-life evolution as a theorist. Earlier in Pareto’s theorizing, even at the
very beginning of volume four of Treatise, governance structure seems to have
been of secondary consideration at best (e.g., Pareto 1916/1935: §2060). But by
the end of volume four of Treatise, and throughout Transformation, governance
structures assume a central place in Pareto’s descriptions of equilibrium and
cyclical change in social systems.
The contention of this chapter, then, is that meaningful theoretical progress was
made, though haltingly and with great ambiguity, in the fourth volume of Treatise,
and moreover, that the significant development in Pareto’s theory of society is
more readily apparent by the time he wrote Transformation. New insights offered
in Treatise were also crystallized and clarified somewhat in Transformation,
making them easier to recognize.
The heart of the late-life development in Pareto’s theoretical formulation is
that governance structures came to be the defining characteristic of entities Pareto
used to illustrate stable or moving “social system” equilibria. At least by example,
the presence of established governance mechanisms came to define what Pareto
meant by “social system” as he was employing that term near the end of his life.
Connecting the concept of equilibrium to the presence of a governance structure
directed Pareto’s attention to countervailing internal forces endogenous to social
system. Doing so allowed Pareto to understand how equilibrium processes can, in
the normal course of affairs (not just pathologically abnormal instances) result in
dysfunctional outcomes. Decisions to embrace or forego change are most likely
to be dysfunctional when (a) societal change systematically privileges feedback
from the same special interests, or (b) is driven by systematic errors in judgment
undermining balanced analysis of reality.

Aftershocks in Equilibrium Theory

It is important to note that Vilfredo Pareto’s university training culminated with

his undergraduate thesis in engineering. His thesis examines ways in which solids
can be thought of as systems which undergo some internal rearrangement in
response to exogenous influences such as change in outside temperature. Change
subsequently occurs through processes of adjustment that reverberate through a
solid as a reaction to exogenous conditions (such as temperature change). So while
an exogenous event like a drop in temperature might be described by some people
as causing the reconfiguration of material making up the solid, Pareto would have
said it was more appropriate to think of drop in temperature as the trigger, but not
as a real explanation for the kind of change that subsequently unfolds.
This is an important theoretical and conceptual point. Explaining why one
solid contracts more than another when both are subjected to the same drop in
temperature requires that we think about differences between internal configuration
of elements making up the two solids. The trigger initiating a change process may
be exogenous, but understanding differences in adjustment needs to be predicated
58 Vilfredo Pareto

on awareness of endogenous properties and processes. Good scientific theory must

consider external triggers, dealt with perceptively by Marshall (2012), but also
needs to consider the adjustment processes through which external shocks cause
reverberations of different kinds throughout the system, altering the ways in which
interconnected elements are arranged relative to one another (Pareto 1869, and the
focus of this chapter).
It therefore follows that if we want to develop an explanatory and predictive
science, as Pareto did, a significant portion of our theoretical attention needs
to focus on the nature of systemic interconnections giving social systems their
systemic character. We can then ask, as Pareto did, how systemic properties and
processes influence the adjustments that take place as a system responds to events
in the external environment. A robust and powerful systems theory should enable
us to predict the way different systems of the same analytical type (different
societies, for example) respond to the same test conditions. Thus, equilibrium
system theory can, in this sense, be thought of as a theory of aftershocks. For
Pareto, an important dimension of equilibration in a social “system” involves the
way in which decision-making and action-taking office holders will interpret and
adjust to the feedback they receive about internal and external conditions.
We can infer from Pareto’s discussions of “public authority” that he understood
systemic processes as operating largely through institutionalized positions of
public authority responsible for monitoring and responding to various classes
of events. It was Pareto’s conviction that by understanding how institutionalized
arrangements fit together, we could make reasonable predictions about the likely
level of functionality or dysfunctionality of expected system responses at a given
point in time. For example, when governments are overly responsive to special
interests, it is reasonable to anticipate that, as the system responds to unfolding
events, the resource reallocations that take place will be suboptimal (wasteful).
Furthermore, when tasks are reassigned, systematically privileging the same
special interests will tend to result in suboptimal changes, such as spreading some
people too thin, asking too little of others, and assigning responsibility to people
who are structurally not in a position to know how to best address that type of
problem. Changes of this nature only make the social system weaker and less
resilient in the face of future challenges (a central concern of chapter three in
Transformation).
We should note that reallocation of resources and reconfiguration of activities
are not ephemeral kinds of adjustments. They can reshape the institutionalized
arrangements giving a social system much of its structure. And in this sense, a
social system reconfiguring itself through its own governance mechanisms is
revealing systemic processes, sui generis. A good system theory should thereby
allow us to predict how a given social system, by virtue of having particular
internal characteristics, is likely to reconfigure itself (or fail to do so) under
changing external conditions.
 The Role of Sticking Points in Pareto’s Theory of Social Systems 59

Concern with Endogenous Processes rather than Exogenous Shocks

Pareto’s central purpose in writing both Treatise on General Sociology and The
Transformation of Democracy was to try to identify and understand processes
giving superorganic social entities whatever systemic properties and character they
might realistically be said to possess. This was a very complicated undertaking,
so it is little wonder than many of Pareto’s readers failed to follow his chain of
reasoning. But if we look to Transformation as a guide, thinking of it as his final
and most theoretically mature effort at social system theory building (even though
it was certainly not his longest and most detailed work), we can see the essential
elements of an equilibrium theory of social change. System change occurs, or
resistance to change develops, because of give and take of feedback gathering
and assessment orchestrated within a social system, and particularly within the
mechanisms of governance defining the boundaries of that social system.
In Pareto’s hands, with his engineering frame of mind, the word “system”
connotes a practical and realistic understanding of the way in which the world
operates. The theoretical contribution he made in the final parts of Treatise and
then in Transformation was to outline an equilibrium analysis of endogenous
processes influencing which changes people in positions of public authority would
champion and which changes they would impede. Equilibrium outcomes were
never assumed by Pareto to necessarily embody the best interest of the social
system itself or the greatest good for the greatest number of people associated with
the social system (again, Pareto 1921/1984: 77). Functionality or dysfunctionality
of institutional change depends, among other things, on the adequacy of the
feedback system and the balance with which feedback is analyzed and interpreted.

Distinguishing Social System Equilibria from Economic Equilibria

Pareto’s efforts to examine economic equilibria dealt with changes in production

levels, wage rates, prices for goods and services, and consumption levels. It is
easy to see that the economic equilibria Pareto studied (Pareto 1909/1971) were
all functions of aggregate changes in discrete decisions made by a multiplicity of
individual people. For example, other things being equal, an increase in the price of
crude oil will make some people think about ways to lower their fuel consumption.
If enough conservation efforts are sufficiently successful, lower demand might
result in lower prices. In this common example, economic equilibrium analysis
looks at the aggregation of discrete actions taken by people who are assumed to
be relatively free and independent of one another except for the fact that they are
exposed to the same market environment. If everyone has to pay more for petrol,
we can try to predict how many people will cut back on driving. In this example,
economic equilibrium analysis suggests a pattern of self-retarding developments
resulting in a “stable” equilibrium. An increase in demand often encourages a
60 Vilfredo Pareto

price increase, which typically acts as a damper on demand. As demand drops,

producers have more incentive to lower price as a way of attracting customers.
This returns supply, demand, and price back to something like their “stable”
equilibrium point.
An equilibrium can also “move” and re-establish itself at a very different point.
With computers, for example, improved technology stimulated growth in demand.
But growth in demand enabled companies to achieve economies of scale that
continued to drive down prices. In this instance, the balance of supply, demand,
and price moved to new equilibrium points; hence, a “moving” equilibrium.
When an economic equilibrium is the focus of our attention, feedback does not
need to be very precise (Pareto 1909/1971). If demand seems to outstrip supply,
business people do not need to know exactly how big the imbalance between
supply and demand actually is, because they can allow price to float upward
until reaching the price at which the market is cleared. But by late in Treatise and
certainly be the time Pareto wrote Transformation, his conception of social system
equilibria had diverged significantly from his conception of economic equilibria.
By then, a social system equilibrium point was no longer being conceptualized by
Pareto as a shift in average patterns of behavior by large numbers of individual
people. Instead, a social system equilibrium point came to be understood by Pareto
as a particular allocation of resources and activities within an institutionalized
governance apparatus or within the domains of human activity those governance
institutions oversee. The focus moved from the everyday cost/benefit decisions
of ordinary people to competing interests vying for the attention and support of
persons occupying positions of public authority.

Distancing Pareto from Parsons

Pareto was introduced to American sociologists through members of the “Harvard

‘Pareto Circle’” (Heyl 1968). This circle included many future luminaries including
Talcott Parsons, George Homans, and Robert K. Merton (all future presidents of
the American Sociological Society, now the American Sociological Association).
Through their writing, awareness of Pareto spread in the United States.
The concept of “social system” gained wide currency in American sociology
after publication of Talcott Parsons’ The Social System (1951). Unfortunately,
American sociologists have consequently tended to confuse Parsons’ conception
of “social system” with that of Pareto, despite the fact that Parsons was quite
emphatic in stating that his structural functional approach to the study of social
systems differed from that of Pareto. Parsons begins his book The Social System
(1951) with this admission:

The title, ‘The Social System,’ goes back, more than to any other source, to the
insistence of the late Professor L.J. Henderson on the extreme importance of the
 The Role of Sticking Points in Pareto’s Theory of Social Systems 61

concept of system in scientific theory, and his clear realization that the attempt
to delineate the social system as a system was the most important contribution
of Pareto’s great work. This book therefore is an attempt to carry out Pareto’s
intention, using an approach, the ‘structural-functional’ level of analysis, which
is quite different from that of Pareto … (Parsons 1951: vii).

It is important to appreciate that, in terms of their basic premises, the ways in

which Pareto and Parsons conceptualized and theorized about “social systems” are
quite different, especially with respect to their approaches to functional theorizing.
Parsons, having received pre-med training as an undergraduate (in marked
contrast with Pareto’s engineering training) began with a particular epistemological
sense of the world. Parsons (bio-medically informed) epistemological sense is that
a “system” has interdependent components which have purposefully evolved to
perform indispensable functions. System components can therefore be assumed
to contribute to the health and maximum survivability of the system as a whole.
This amounts to assuming that change will normally be functional and that
dysfunctional change will be aberrant.
Trained as an engineer, Pareto was more inclined to think about change in
social systems the way one might think of looking at bridge design. Bridges
have expansion joints for internal adjustment to temperature change, and we can
note that bridges are constructed of materials capable of flexing in the wind. But
there is nothing ordaining that a particular bridge should necessarily be designed
for maximum survivability. In a sense the opposite is actually true. Bridges are
generally built to maximize efficiency in light of anticipated load, with an eye to
avoiding “overbuilding” in order to conserve resources.
The metatheoretical outlook which Parsons projected onto social systems is
that they evolve in the direction of maximum survivability of the system itself
without much calculation of anything else, including the willingness of people to
bare costs. But Pareto’s way of thinking about social systems involves the cost/
benefit analysis of people who have more immediate concerns than their own
tiny contribution to the survival of the social system, and who usually have an
interest in using the system as a means of improving their own circumstances
and advancing their own positions. The concern for Pareto, really, is whether the
system is set up in a way that insulates against or facilitates hijacking of public
authority by special interests.

Social Systems other than Societies

When Pareto wrote about social systems, he referred to present and past societies
and he emphasized particular properties/processes. This leaves open to some
question, exactly what Pareto meant by the term “social system.” Is a social
“system”
62 Vilfredo Pareto

a. any social entity, regardless of its features,

b. only societies, but all societies, regardless of their features,
c. only societies, but more specifically, only those societies having a specific
set of features, or did he mean
d. all social entities having a specific set of features?

If we are to assume that Pareto’s latest work was his most intellectual mature
work and the contribution for which he would most want to be remembered, we
can dismiss the first two possibilities (a and b). By late 1913 or early 1914, Pareto
began to think somewhat differently about his theory of social systems, and was in
the process of bringing institutionalized governance mechanisms to the forefront
of his analysis. By that time, he was identifying “public authority” as something
that is a defining part of a social system, sui generis. This is because he came to see
relatively stable (even if sometimes dysfunctional) system attributes emanating
from the exercise of public authority. Information (sometimes relatively realistic
information and at other times highly skewed information) is available to decision
makers, and if authorities have realistic information and accurately interpret it,
then the course of change is more likely to be functional in its consequences; that
is, change is more likely to contribute to system resilience and enhance system
capacity to meet challenges and solve problems. This means, however, that the
application of Pareto’s theoretical framework in its final form assumes some
institutionalized governance as a defining characteristic of what it must mean to
be a social system.
Pareto may possibly have expected his theory (c) to apply only to societies
displaying requisite properties/processes, or (d) he may have welcomed the
application of his equilibrium theory of social systems to any social entities (for
instance, complex organizations or communities) having governance mechanisms.
The argument in favor of restricting application of the concept of “social systems”
to societies having governance mechanisms is that most of Pareto’s examples,
and certainly the more fully developed examples, are societal in character. But
Pareto’s language really was quite generic when he discussed his equilibrium
theory of social systems. A reasonable reading of Pareto is that he intended the
application of his equilibrium theory of “social systems” to any entity (1) having
institutionalized positions responsible for arriving at decisions to change resource
allocation or to reconfigure the responsibilities and activities of people occupying
institutionalized roles, and (2) having on-going processes for taking actions
for changing the system itself and for altering the relationships among people
interspersed throughout the system (e.g., Pareto 1916/1935: §121–31).
In the decades since Pareto’s death, a number of organizational theorists have
used the concept of social system to good affect, and in ways Pareto probably
would have appreciated. Alfred Chandler (1962), in his classic work Strategy
and Structure, provides very tangible definition requiring positions of designated
authority, lines of formal or informal communication, and institutionalized
processes for making decisions and taking action. This is roughly consistent with
 The Role of Sticking Points in Pareto’s Theory of Social Systems 63

the constellation of features the late (that is, post 1913) Pareto (e.g., 1921/1984)
introduces in his examples as factors stitching social systems together. The view
that even small organizational subunits can take on a systemic reality has received
some empirical confirmation (Powers and Fernandez 2009). This could turn out to
be a very important point for future theory development.

The Paradox that Social System Equilibria Can Produce Dysfunctional

Outcomes

The functionalism implicit in Pareto’s work until 1913 differs significantly from
the functionalism undergirding his theoretical framework as it was being reshaped
by 1914 (fourth volume of Treatise) and subsequently (in Transformation). Before
1913, Pareto generally tried to avoid using evaluative terms like “good” and
“bad” in reference to societal practices and institutional arrangements. Instead, he
advised sociologists to concentrate on describing widespread and enduring social
forms and practices, without judging whether those forms/practices were “good”
or “bad.” By late in Treatise, and clearly in writing Transformation, there is what
might appear to some readers to be a change in tone as Pareto describes some
equilibrium solutions as highly dysfunctional.
The apparent contradiction (but this is only an apparent contradiction and not
a real contradiction) is revealed in strongly worded passages which are only a
few pages apart in Transformation. Pareto ends chapter four of Transformation by
writing that he will not judge. “As already pointed out, we will refrain from judging
the desirability or undesirability of the facts noted above” (Pareto 1921/1984:71)
which in that instance had to do with a more democratically responsive government
expanding its role by legislating protection or providing benefits for working
people. But within a few pages, he notes that we must assess consequences (in this
case, of government action), and recognize that those consequences can in fact be
“noxious” (Pareto 1921/1984: 77). Indeed, the recurring theme of Transformation
is that social systems frequently arrive at stable equilibrium solutions (that is,
a status quo) which Pareto describes in terms that are clearly and more or less
unequivocally negative.
What we should make of this is a categorical type of government (such as
democracy) cannot be assumed to be either good or bad. However, a particular
government, which at least on the basis of superficial characteristics would
seem to fall within a category, can indeed be judged to produce system changes
which are generally functional in some respects or in certain time periods, while
generally dysfunctional in other respects or at other time periods. This variability
between propensity to arrive at functional or dysfunctional outcomes is what
Pareto sought to explain, but he felt that it had little if any real relationship with
the categorical type a government can be placed in. There can be functional
democracies and dysfunctional ones, and there can be functional autocracies and
dysfunctional ones.
64 Vilfredo Pareto

Whenever the occupants of institutionalized positions of authority are in the

habit of pandering to special interests, we can anticipate that the social system at
large will probably grow weaker over time. Referring to the Italian case around
1920 (with institutions of governance that were democratic in their outer form),
Pareto uses Transformation to describe some of the systemic factors leading to
dysfunctional sticking points. Common elements suggested in Transformation
include:

1. feedback channels which give too much voice to some interests and too
little to others, and
2. ideological bias which perpetuates rather than challenges the myopic vision
on which misguided programs and policies are often based.

Although Pareto was (like Durkheim) convinced that some social mythologies
have utility for society at large, he certainly did not feel that all mythologies are
useful for society. The crux of disagreement between Durkheim and Pareto was
Durkheim’s tendency to assume that the status quo has functional purpose and is
consequently justified, while Pareto’s functionalism seeks to understand why a
social system will tend to produce equilibrium solutions which are functional at
some periods of time and noxiously dysfunctional at others.
Transformation is important because it allows us to understand how equilibrium
solutions can stabilize around dysfunctional sticking points, thereby diminishing
a social system’s capacity to meet challenges with resilience. In this way, Pareto’s
late writing offers a framework in which dysfunctional outcomes are treated as
normal and predictable. Volume four of Treatise and Transformation provide us
with a theoretical framework explaining how it can happen that a social system
does a poor job of recognizing and correcting disastrous courses of action (e.g.,
the Iraq war) while being slow to recognize and aggressively respond to major
challenges (e.g., climate change).
For Pareto, the functionality of outcomes from social system equilibration will
always be contingent on the adequacy of the feedback channels and mechanisms,
because they are critically important features of any social system. When
information gathering processes are such that a particular set of entrenched interests
dominate feedback, and also, when interpretation of feedback is distorted by the
ideological blind spots of the people who occupy or advise positions of public
authority, equilibrium solutions are more likely to have negative consequences
and to resist correction.
In social systems, it is common for feedback signals from some quarters
to be accurately transmitted or even amplified and enhanced, at the same time
that feedback signals from other quarters are routinely suppressed or distorted
(e.g., if not shut out altogether, then garbled to be unintelligible or altered to be
misleading). To the degree that there is systematic suppression or distortion of
feedback, Pareto expected equilibrium solutions to settle on dysfunctional rather
than functional outcomes.
 The Role of Sticking Points in Pareto’s Theory of Social Systems 65

Vested Interests and Networks as Sources of Selectivity in the Collection of Feedback

By focusing on the role of vested interests and network connections, Pareto

understood that social system feedback always suffers from selection bias
(Pareto 1916/1935: §2009). Among all the possible socio-economic and political
directions a social system might turn at a given point in time, some directions will
never be considered because:

a. the voices of advocates for those positions are never heard, or

b. the positions being advanced fail to comport with the interests and
sensibilities of decision-makers and the people having influence over
decision-makers.
By contrast, the potential outcomes having the greatest chance of being pursued
are those favored by persons or groups who are allowed to have the most voice,
for their feedback counts the most (Pareto 1916/1935: §2128).
Pareto did not regard differential access as a matter of “right and wrong.” He
simply felt it was inherent in the nature of social systems. Depending on where
feedback signals come from, some concerns and outlooks will be amplified and
others will be obscured. This is just the way social systems work, and realizing this
goes a long way, in Pareto’s view, to explaining why social system equilibria will
sometimes produce suboptimal outcomes.
Recognition of this important factor is one way Pareto’s later work diverges
from that of economists like Walras. To begin with, the late Pareto turned his
attention from equilibria involving aggregate patterns of individual choice (such
as the price at which a market will clear) to changes made (or avoided) by people
in positions of public authority as they order the systemic redirection of resources
or rearrangement of activities (Pareto 1916/1935: §2129).
At this point it is useful to make an analytical distinction between Type I
and Type II decision-making errors (not following Pareto’s use of those terms,
but using this vocabulary in a more contemporary way). A Type I error involves
adopting a change that turns out badly. A Type II error involves failing to adopt a
change that would have been beneficial. The existence of sticking points suggests
that both kinds of errors can be made and can compound one another; first, making
changes that are deleterious, and then stubbornly trying to “stay the course” for
much too long, even as mounting evidence calls into question the wisdom of a
current course of action. (For analytical clarity, we can say that a case in which
a lower level functionary makes a good decision to change and this decision is
overruled at a higher level, is best viewed as a Type II error if the unit of analysis
is the whole social system.)
The reality of economic interests makes it clear why a dysfunctional status quo
is sometimes tenaciously defended by those with power. “People who are already
rich and powerful oftentimes have little to gain from innovations, whereas society
may benefit greatly by them” (Pareto 1916/1935: § 2139). This means that the
systemic character of every society can lead to something other than what is best
66 Vilfredo Pareto

for the social system as a whole or for the majority of people who are part of that
social system, for “…there are many cases where, even taking very liberal account
of indirect utilities, the result shows not an advantage, but a sacrifice, for the
subject classes” (Pareto 1916/1935: §2134). Those with power are rarely anxious
to see things change even if it is for the betterment of the social system at large.
A good illustration may be found in Haiti during the period of rule by François
(“Papa Doc”) Duvalier and Jean-Claude (“Baby Doc”) Duvalier. By any objective
standard, the social system outcomes for Haiti during that period were dysfunctional
for the society as a whole, and the efficacy with which public authority could
respond to challenges was generally compromised by the mechanisms used to
govern and rule the country. There is nothing mysterious about this. A small elite
was able to maintained itself, and indeed, maintained itself in luxury, through
perpetuation of arrangements which failed to serve most people well and left
societal institutions with very little capacity for action.
Pareto was quite specific about the nature of this problem.

The admirer of the ‘superman’ will assign a coefficient of approximately zero

to the utility of the lower classes, and get a point of equilibrium very close to
a state where large inequalities prevail. The lover of equality will assign a high
coefficient to the utility of the lower classes and get a point of equilibrium very
close to the equalitarian conditions (Pareto 1916/1935: §2135).

Pareto goes on to say more in the same passage, sounding as if he does not care
about high levels of inequality. “There is no criterion save sentiment for choosing
between the one and the others” (Pareto 1916/1935: §2135). Pareto did understand
that some outcomes are indeed better than others. But he did not want to arrive at
overly general assessments, such as less inequality is always better (or worse) than
more inequality. He was, in any case, in disagreement with Durkheim’s position
that the equilibrium dynamics of a social system generally lead to a set of solutions
which are “functional” for the social system as a whole or for or the majority of
its members. Instead, Pareto used social system equilibrium dynamics as a way of
explaining suboptimal sticking points. Suboptimal sticking points are frequently
rooted in the desire of powerful people to prolong a status quo benefiting only
themselves (Pareto 1916/1935: §2131).
The importance which Pareto attributed to having people in positions of public
authority work with broadly accurate and revealing feedback, is not to be confused
with the concept of being equally responsive to everyone without regard to the
merits of their various positions. Throughout Pareto’s career, he insisted that
governments or administrative units incapacitate themselves if they try to be all
things to all people. Giving everyone a little of what they want is simply not what
Pareto regarded as a sure path to societal greatness. (It may not be any better than
giving the rich what they want and forgetting about everyone else.) Greatness
requires strategically resourcing those initiatives that are worthy and have goals
 The Role of Sticking Points in Pareto’s Theory of Social Systems 67

which can be achieved, rather than trying to placate every demand or the demands
of those interest groups powerful enough to make their presence felt.

Interpretive Bias as a Source of Feedback Distortion

Distortions in the interpretation of feedback can reflect the prejudices, proclivities,

and presumptions of leaders and of those people whom leaders hear from and
are inclined to care about (Pareto 1916/1935: §2128–9). This means that, at any
moment in time, the role of leadership in promoting change or resisting change
will be determined not only by the information leaders receive, but also by the
ideological “spin” that is applied to that information.
Every person occupying a position of “public authority” has to make judgment
calls determining which priorities (“utilities”) are most important or most pressing
at any given point in time (Pareto 1916/1935: §2131). Population increase offers
an interesting example (Pareto 1916/1935: §2234). Pareto noted that during his
own time, some government officials viewed population increase as a factor
adding to a country’s military posture, by contributing to strength of numbers.
But other officials, or perhaps even the same officials, wondered if population
increase might simultaneous sap national strength by eroding overall standard of
living and spreading educational and other public investments thin. This posed a
policy dilemma. Should high fertility rates be encouraged or discouraged? Should
national borders be open or closed to immigration? Pareto noted that there is no
objective way of answering questions like these, but that answers are often found
in the interpretive biases held by people in positions of authority. Here, Pareto’s
frequent discussion of “combinations” and “persistence of aggregates” is relevant
and remains an open area of investigation (e.g., Bouvier 2002, 2012). How are we
to understand what people value and how they set priorities?
The distortion that occurs as feedback is analyzed and interpreted by those in
authority was one of Pareto’s deepest concerns (Pareto 1916/1935: §2131). As
elites change, the balance of proclivities and prejudices among decision-makers
also changes. This alters administrative response to challenges (Pareto 1916/1935:
§2025). Who is in power, where those people solicit feedback, and how the
feedback is interpreted, all influence the outcomes of social system equilibrium
processes.
Every society has some kind of governing elite. And in every society, the
membership of the governing elite shifts somewhat over time, as people occupying
elite status in non-governmental sectors (cultural institutions, media, the economy,
etc.) move into positions of political importance, or as politically powerful people
are replaced by a younger generation with the passage of time. It also sometimes
happens that leaders of disaffected sectors of the population can organize to
wrench power from the hands of a decaying elite.

In moving from one group to another an individual generally brings with him
certain inclinations, sentiments, attitudes, that he has acquired in the group from
68 Vilfredo Pareto

which he comes, and that circumstance cannot be ignored” (Pareto 1916/1935:

§2041). “In virtue of class-circulation, the governing elite is always in a state of
slow and continuous transformation. It flows on like a river, never being today
what it way yesterday. From time to time sudden and violent disturbances occur.
There is a flood—the river overflows its banks. Afterwards, the new governing
elite again resumes its slow transformation (Pareto 1016/1935: §2056).

In addition to the circulation of various elites in and out of governance positions,

we also have to recognize a “class circulation” from non-elites to elites (Pareto
1916/1935: §2042 and §2047). This is an important final element in Pareto’s
understanding of sticking points and equilibrium in social systems. Elites often
defend a dysfunctional status quo, though sometimes at their own peril.

Sticking Points as an Explanation for Dysfunctionality

Pareto’s analysis of social system equilibrium processes is distinguished by the

fact that he embraces dysfunctional outcomes as natural, predicable, and expected.
First, suboptimal equilibrium solutions are to be expected because feedback is
always gathered selectively. If feedback is gathered in a way that treats only a small
fragment of the total social landscape as important, one can hardly expect patterns
of change that will optimally redirect time and resources in the best interests of the
social system as a whole. Second, in social systems, some degree of interpretive
bias is unavoidable. Interpretive bias frequently (not always, and perhaps not even
most of the time, but at least rather frequently) leads to bad decisions because
of the distortion it causes in analysis of feedback. This adds another source of
suboptimalization when the equilibrium processes of social systems are at work.
With regard to what we can understand as sticking points, Pareto also kept
emphasizing the importance of the rate of “circulation of elites.” Slow circulation
tends to prolong periods of stationary rest at social system sticking points. Having
arrived at a state of affairs with downside costs exceeding benefits for the social
system as a whole, what happens? Quite frequently, nothing happens for a
time because those who benefit the most from the status quo have little interest
in meaningful change. But costs do accumulate, and where exploitation and
repression are most obvious, the process of change, when it finally comes, is more
likely to be dramatic and violent.
Pareto may have been thinking about suboptimal sticking points for most
of his career. For instance, as a corporate manager and managerial consultant,
Pareto developed the versatile 80/20 principle. This is what we might think of as
an “open application” principle because it can be applied to many different things.
For example, for corporations it has often been more or less generally true that
80 percent of profits come from 20 percent of a company’s product line, and 80
percent of useful ideas for change come from 20 percent of the employees. Also,
80 percent of complaints come from 20 percent of customers and 80 percent of
personnel problems revolve around 20 percent of employees. A key question we
 The Role of Sticking Points in Pareto’s Theory of Social Systems 69

might ask is, how can it be that organizations do not correct such imbalances by
addressing the people/places/issues that are most often the source of problems?
Applying Pareto’s post 1913 thinking, we can understand the tolerance of
80/20 type imbalance as rooted in a combination of:

a. failure to collect feedback on critical matters from people who are in the
best position to know,
b. failure to analyze that feedback in an unbiased way, and
c. reluctance to press for change, based on a wish to avoid disruptive or costly
or distracting pushback.

But the consequence of inaction at any sticking point is accepting a steady

accumulation of problems associated with suboptimal strategies, practices, or
performance patterns. Consequently, failure to act in the present only delays the
point at which growing problems must be reconciled.
As an economics professor, Pareto also gave a good deal of attention to the
stability of income distribution over time in any given country (e.g., Nielson
2012) and this may offer another illustration of sticking points in Pareto’s work.
Income is far less equally distributed in some countries than in others, but in any
given country a change in the distribution of income takes place rather slowly,
perhaps because the rich feel they are already getting as much as they can without
generating a lot more resistance, and the poor are fearful of losing what little
they have now (Pareto 1921/1984: 55). History is therefore characterized by a
surprising level of stability in the distribution of income.
Whatever the distribution of wealth in a given society at a particular point in
time, Pareto rejected the idea that we should see this equilibrium solution as the best
of all possible outcomes. Where income distribution is associated with debilitating
poverty (too much inequality) or fails to provide incentives for entrepreneurship
(too little inequality) the social system will lack resilience. So Pareto’s law of
income distribution represents another example of Pareto’s awareness of and
concern for dysfunctional sticking points early in his work, before the theoretical
advances in volume four of Treatise and in Transformation.

The Enduring Social Scientific Importance of Pareto’s Work

It is important to both ask and answer this question. Why must we continue to
seek forward-looking intellectual direction from the works of a scholar who was
75 years old (75 years, one month and four days) at the time of his death roughly a
century ago (on August 19, 1923)? Generally speaking, the norm for the sciences
is to rapidly forget the identities of prior generations of scholars and relegate them
to obscure footnotes. Why should Pareto be the exception? The answer is that,
even after all this time, Pareto’s work continues to have scientific importance
70 Vilfredo Pareto

for the previously overlooked insights it continues to hold and for the way those
insights can continue to inform us.
The focus of theoretical concern at the end of Pareto’s life, as is clear in
Transformation, was on systemic properties that make functional patterns of
system change more or less likely. This is the core of his final theory of social
systems and, it would seem, what he earnestly hoped to be remembered for. The
internal organization of a social system includes processes of give and take which
ultimately determine how feedback will be collected and processed, and what
kinds of change will be forthcoming. (Principal types of change resulting from this
equilibrium give and take in social systems include redistribution of resources and
reconfiguration of activities expected of people occupying institutionalized roles.)
The analysis of change Pareto arrived at late in life differs from his earlier work
in four important respects or matters of emphasis. Some people would challenge
this rendition of Pareto’s theory, in part because it gives special weight to the
concerns and outlooks dominating Pareto’s thinking in the last decade of his life.
The four developments marking Pareto’s final burst of theorizing can be succinctly
summarized:

1. Social systems are more than aggregates of people having some similarities
and sharing some beliefs in common. Social “systems” also have some
form of institutionalized governance structure. For it is the existence of
a governance structure, or arrangements and practices for marshalling
manpower and resources to meet challenges, that allows a social entity
to change itself over time. (Although governance structures were rarely
emphasized by Pareto as one of his central concerns before 1913, they are
of pivotal importance in The Transformation of Democracy, where Pareto
self-consciously made his final effort to further clarify what he understood
as his major contribution to the social sciences.)
2. Pareto’s heightened concern for institutionalized governance structure
allowed him to move beyond an economic conception of social system
equilibrium, in which price setting is understood to modulate aggregate
patterns of supply and demand in an exchange environment occupied by
individual actors. Paying attention to governance structure, or arrangements
and practices for marshalling resources to meet challenges, allowed Pareto
to look beyond aggregate patterns of individual behavior and to understand
societal properties and processes as a equilibrating balancing act unfolding
not between individual people but among structurally related parts of a
system, sui generis. In writing Transformation, Pareto seems to have
thoroughly focused on the central role played by government functionaries
in the equilibrium processes influencing change in the systemic character
of society. For the decisions made within governance structures can
change the character of society by influencing the distribution of resources
within society and the configuration of activities of people occupying
institutionalized roles.
 The Role of Sticking Points in Pareto’s Theory of Social Systems 71

3. Pareto’s Transformation conveys, without any equivocation, that changes

brought about through political processes are often dysfunctional, both in
the sense of compromising general welfare and in the sense of sapping
the resilience of society to meet challenges. New changes are more likely
to be dysfunctional to the degree that decisions are made on the basis of
incomplete or misleading information, or when analysis of information is
subject to biased interpreted.
4. Dysfunctional changes are likely to enjoy longevity to the degree that they
favor powerful interests or conform to cherished presuppositions. That
is, a social system can rigidify and stagnate at sticking points which are
costly and which impede performance enhancing innovation. The presence
of sticking points suggests a downward spiral in which resources are
squandered as problems continue to mount. In the most pronounced cases,
the presence of sticking points can set the stage for cataclysmic change,
most likely at times when a well entrenched elite can no longer impose
itself on citizens unwilling to continue to absorb the costs of dysfunctional
social arrangements.

There are good scientific reasons for returning to re-read Vilfredo Pareto and for
continuing to pursue lines of inquiry he pioneered. If we pull together various
threads drawn from Treatise on General Sociology and The Transformation of
Democracy, we can arrive at a theory of social system equilibrium which uses
feedback distortion (from selective feedback and interpretive bias) to explain
short-term social system stability around what can actually be very dysfunctional
equilibrium solutions.

References

Bouvier, Alban. 2002. “An Epistemological Plea for Methodological Individualism

and Rational Choice Theory in Cognitive Rhetoric.” Philosophy of the Social
Sciences 32(1), 51–70.
Bouvier, Alban. 2012. “Pareto, Mill and the Cognitive Explanation of Collective
Beliefs: Unnoticed Middle-range Theories.” In Beyond Disciplinary
Boundaries: Essays on Pareto, edited by Joseph Femia and Alasdair Marshall.
Farnham: Ashgate.
Chandler, Alfred. 1962. Strategy and Structure: Chapters in the History of
American Industrial Enterprise. Cambridge, MA: MIT Press.
Durkheim, Emile. 1893/1964. The Division of Labor in Society. New York, NY:
Free Press.
Durkheim, Emile. 1895/1982. The Rules of Sociological Method. New York, NY:
Free Press.
Durkheim, Emile. 1912/1951. Elementary Forms of Religious Life. New York,
NY: Free Press.
72 Vilfredo Pareto

Femia, Joseph. 2006. Pareto and Political Theory. London: Routledge.

Heyl, Barbara. 1968. “The Harvard ‘Pareto Circle.” Journal of the History of the
Behavioral Sciences 4(4), 316–34.
Marshall, Alasdair. 2007. Vilfredo Pareto’s Sociology: A Framework for Political
Psychology. Aldershot: Ashgate.
Marshall, Alasdair. 2012. “Pareto’s Sociology of Risk and Uncertainty.” In
Beyond Disciplinary Boundaries: Essays on Pareto, edited by Joseph Femia
and Alasdair Marshall. Farnham: Ashgate.
Nielsen, François. 2012. “Talents and Obstacles: Pareto’s Morphological Schema
and Contemporary Social Stratification Research.” In Beyond Disciplinary
Boundaries: Essays on Pareto, edited by Joseph Femia and Alasdair Marshall.
Farnham: Ashgate.
Pareto, Vilfredo. 1869/1952. “Principi fondamentali della teoria della elasticita
de’ corpi solidi e ricerche sulla integrazione della equazione differenziali che
ne definiscono l’equilibrio.” Reprinted in Scritti teorici. Milano: Malfasi, 593–
639.
Pareto, Vilfredo. 1909/1971. Manual of Political Economy. New York, NY:
August M. Kelley.
Pareto, Vilfredo. 1916/1935. Treatise on General Sociology, first published in
English under the title Mind and Society. New York, NY: Harcourt Brace.
Pareto, Vilfredo, 1921/1984. The Transformation of Society. New Brunswick, NJ:
Transaction Press.
Parsons, Talcott. 1951. The Social System. New York, NY: Free Press.
Powers, Charles, and Fernandez, Marilyn. 2009. “Using Department Protocols
as Indicators of Emergent Organizational Reality in a Ground-Level
Administrative Unit: A Modest but Important Basic Research Development.”
Administration & Society 41(6) (October), 715–38.
Scott, John. 2012. “Pareto and the Elite.” In Beyond Disciplinary Boundaries:
Essays on Pareto, edited by Joseph Femia and Alasdair Marshall. Farnham:
Ashgate.
 Chapter 4
Pareto, Machiavelli, and the Critique
of Ideal Political Theory
Joseph V. Femia

For a couple of generations now, the dominant model of political theory – at

least in the English-speaking world – has been to formulate ideal principles and
concepts, and to assume that these must be expressed in political action. Since this
model presupposes ‘the priority of the moral over the political’ (Williams 2005:
2), it can be labelled ‘political moralism’. Since its practitioners (Rawls, Dworkin,
Raz, Habermas, to name a few) are preoccupied with characteristic liberal themes,
such as justice, individual autonomy, human rights, and democratic deliberation,
it is sometimes referred to as ‘liberal moralism’. In all its forms, it assumes, in the
Kantian tradition, that reason can give us access to a fixed and stable moral order.
A striking feature of this type of theorising is its anti-political bias. As Glen
Newey points out, the implementation of rational patterns of life, whatever their
content, ‘would herald the end of politics’ (2001: 7), if by that term we mean the
clash of interests and opinions. One is reminded of Marx’s view of communism,
‘the riddle of history solved’, a society of perfect transparency and solidarity,
where politics in the familiar sense of the word ‘withers away’. Marx realised
that the supersession of politics spells the supersession of political philosophy.
Normative political philosophers of the present day resemble Marx in their search
for a ‘final solution’ to problems of political and social organisation, one that
would render further speculation otiose. Even Habermas, who apparently wants
to subject us to incessant political deliberation, assumes that universal dialogic
procedures or discursive principles, which themselves embody absolute moral
commitments, will provide a means of rationally resolving practical discord. The
purpose of public debate is merely to endorse decisions generated by reason. The
aim of political theory, for Habermas as for other political moralists, is to arrive
at a set of ideal prescriptions rather than to justify preferences in the context of
existing values and political constraints.
Perhaps inevitably, this reduction of political theory to applied ethics has given
rise to a counter-movement of philosophers or theorists who find it insufficiently
realistic and insufferably arrogant. The first rumblings of discontent were audible
in the late 1980s, when Judith Shklar (1989) urged us to substitute a ‘liberalism
of fear’ for the more fashionable liberalism of hopes and dreams. But the reaction
against political moralism has gathered pace during the past decade or so, with an
increasing number of theorists challenging the idealistic identification of politics
74 Vilfredo Pareto

with mankind’s most noble aspirations (e.g. Newey 2001, Williams 2005, Mills
2005, Farrelly 2007, Miller 2008, and Geuss 2008). Now of course, Pareto scholars
will know that he too was a critic of normative political theory, and that he worked
in the tradition of political realism founded by Machiavelli (see Femia 2006:
Chapters 4, 6). Like the Florentine, Pareto conceived ‘the political’ as a product
of the appetitive nature of human beings, and ridiculed theorists who, positing a
cosmic purpose or order, dreamt up imaginary republics of ideal virtue, without
even the slightest genuflection to things as they are (1935: paras. 277, 300). In the
modern era, Pareto can be seen as the standard-bearer of political realism, which
he opposed to the Enlightenment moralising that dominated the political discourse
of the eighteenth and nineteenth centuries. Yet the ‘new realists’ do not seem to be
aware of his existence. Some of them barely even mention Machiavelli. While they
attack liberal moralism for its lack of historicity, their own awareness of the past
hardly inspires confidence. But, needless to say, the fact that they are essentially
‘reinventing the wheel’ does not negate the validity of their arguments. In what
follows, I want to examine the main criticisms of political or liberal moralism, and
to argue that consideration of the attempts by Machiavelli and Pareto to establish
political realism can shed light on the strengths and weaknesses of that approach.

The Critique

Realist objections to normative political theory can be divided into four categories.
First of all, it is deemed to be descriptively inadequate, insisting on the idealisation
of reality ‘to the exclusion or at least marginalisation of the actual’ (Mills 2005: 167).
That is to say, it ignores the realities of power and recalcitrant political institutions;
it pretends that traditions or economic constraints do not exist, and turns a blind
eye to the plurality of values and interests in modern society. Assuming, as did
Kant, that politics is the application of a priori principles, discoverable by the
exercise of pure reason, it seems to be addressed to benign dictators in the Platonic
mould who are empowered to enact morally perfect schemes – though no such
audience exists in contemporary society. Such criticisms echo Pareto’s scorn for
what he called ‘metaphysical’ thinking, which tried to demonstrate particular facts
by means of general principles, instead of deriving the general principles from
the facts. As he described his own theoretical project: ‘We have no knowledge
whatever of what … ought to be. We are looking strictly for what is’ (1935: para.
28). Pareto was unremittingly hostile to the seductive idea that there is something
perfect, a realm of Platonic Forms, which contrasts with the imperfect world of
experience, and holds out the prospect of political and moral finality. In common
with Machiavelli, who wanted to focus on – as he put it – ‘real truth’ rather than
‘imaginary things’ (1975: Chapter XV, 90–91), Pareto was determined to protect
us from the tyranny of abstraction, and to take ‘experience and observation’ as his
guide (1935: para. 6).
 Pareto, Machiavelli, and the Critique of Ideal Political Theory 75

G.A. Cohen (2003: 243–5) has responded to this strand of criticism by arguing
that ideals such as justice are completely independent of facts about human social
existence. Principles of justice tell us what we should think, not what we should
do. Factual constraints are relevant to the application of such principles, but the
principles themselves must remain pure, cleansed of all empirical considerations.
However, you do not have to be a Machiavellian realist to wonder whether the
validation of moral principles can be independent of all facts. Take the concept
of justice. A moment’s reflection will tell you that it becomes an issue only in
what David Hume called the ‘circumstances of justice’ – scarcity and limited
altruism. If both material resources and human compassion were infinite, there
would be no need for rules governing the distribution of benefits and burdens. To
assume, as does Cohen, that a concept which owes its very existence to factual
limitations could be ‘fact-insensitive’ is conceptually incoherent (Farrelly 2007:
844–5). Consider another example. Could the moral objection to torture survive if
mankind had a much reduced susceptibility to pain?
This reference to human nature, to the natural human condition, brings us
neatly to the second type of criticism levelled at the political moralists: that their
theories violate the ‘ought implies can’ proviso and are therefore practically
unrealisable. The ‘motivations that are morally required of us’, asserts Thomas
Nagel, ‘must be practically and psychologically possible, otherwise our political
theory will be utopian in the bad sense’ (1987: 218). Normative political thinkers
tend to ignore this advice. They assume idealised human capacities and pay little
or no heed to the limitations of human nature. Cosmopolitan theories of global
justice, for example, rely on the prevalence (eventually, if not now) of an almost
boundless altruism. Listen to Thomas Pogge, who seems to believe that strangers
in distant lands are no less entitled to our beneficent concern than are our closest
relatives: ‘… individual human beings are what ultimately matter ; they matter
equally, and nobody is exempted by distance or lack of shared community from
political demands arising out of the counting of everybody equally’ (1994: 32).
Similarly, the Habermasian ideal of endless democratic discourse presupposes
the availability of almost unlimited time – or at least unlimited willingness to
engage in public debate. Both Machiavelli and Pareto, by way of contrast, saw
selfishness or egotism as a natural property of the human species. Indeed, the
supposed constancy of human nature was what allowed them to discover repeated
patterns in history. They poured scorn on all attempts to imagine man as an ideal
moral being, and – like the present-day realists – saw no point in judging the real
against a vision of perfection.
But here the moralists can enter a plausible objection. Surely moral principles
should allow us to criticise agents and practices that fail to conform to them. If we
make no demands on the human capacity to make sacrifices for others, or for the
common good, if we always assume the worst about human nature, how can we
ever discover its limits? However, it is one thing to expect morality to challenge
existing thought patterns; it is quite another to make demands that are alien to our
deep-seated emotional needs and responses, such as our instinctive valuation of
76 Vilfredo Pareto

associative duties over those to remote strangers. As David Miller (2005, 2008)
has argued, the universalism of normative political theory requires too much of
people – to act purely with regard to rational considerations, to abstract oneself
from all social particularity and become a citizen of nowhere, an impartial actor.
There is the danger of slipping into a kind of absolutism, where – in the words
of C.A.J. Coady – the ‘morally advisable becomes the morally obligatory, or the
somewhat morally preferable becomes a stern duty’ (2008: 17). The purveyors of
such absolutism, it could be argued, condemn themselves to moral irrelevance.
A deontological ethic (I have Cohen in mind) in which the definition of what is
right is not derived from a calculation of what is possible would oblige us to hold
(oddly) that certain actions are morally obligatory even though no one, or hardly
anyone, can be expected to perform them. Of course, this argument could be
pushed too far. By definition the ideal stands in opposition to the real, and not even
Machiavelli and Pareto wanted to deny that we could aspire to something better
than the status quo. Moreover, the present unrealisability of an ideal does not show
that it is unrealisable tout court. Slavery was once seen to be an entrenched part of
the natural order, and those who opposed it were dismissed as idealistic visionaries.
While there is no disputing such considerations, it is generally understood that
moral thinking must pay attention to possibility and feasibility if it is to avoid
destructive outcomes.
This brings us to the third type of criticism levelled at political moralism: that
attempts to implement ideals, however admirable these ideals might seem, can
lead to unintended and unwelcome consequences. The main problem here is the
alleged mismatch between natural human behaviour and the requirements of the
ideal. Machiavelli expressed this point with brutal clarity in chapter 15 of The
Prince, where he issued a warning to all ‘well-meaning’ statesmen: ‘… the gulf
between how one should live and how one does live is so wide that a man who
neglects what is actually done for what should be done learns the way to self-
destruction rather than self-preservation’ (1975: 91). Pareto, defending Machiavelli
against the charge of immorality, points out how hard it is to get people to face
inconvenient political facts: ‘Anyone viewing the facts objectively, anyone not
minded deliberately to shut his eyes to the light, is forced willy-nilly to recognize
that it is not by being moralists that rulers make their countries prosperous’. If
anyone is to blame for this unpleasant truth, it is not the rulers but ‘“corrupt”
humanity’ (Pareto 1935: paras. 1975, 2410).
But those who are enamoured of normative ideals are not only accused of
harbouring illusions about the powers and capacities of ordinary people and
ordinary politicians; they are also berated for ignoring empirical constraints
and competing ideals. In Machiavellian fashion, the critics draw attention to the
paradox that virtues can become vices in a political context. It is not sufficient, they
say, for philosophers to evaluate an ideal itself, in all its pristine purity; we must
also assess the likely or necessary moral costs of the changeover to the supposedly
ideal system. In Pareto’s words, we should ‘consider both the intended and the
incidental effects’ (1935: para. 1864). Certain ideals should be rejected, not only if
 Pareto, Machiavelli, and the Critique of Ideal Political Theory 77

it is literally impossible to implement them, but also if in practice it would be too

costly in terms of values we hold dear. According to J. Raikka (1998: 37):

Kant and his followers are wrong in claiming that only social arrangements that
are impossible to carry out are infeasible. When evaluating the feasibility of a
social institution, it is not enough to consider the strong constraints. Indeed,
a political theorist should consider some of the weak constraints too, namely
those that entail moral costs if the suggested institutional arrangements are
implemented.

On this argument, even when a morally desirable ideal is infeasible only in the
weaker sense, the morally correct approach would be to counsel compromise.
Ignoring Voltaire’s famous aphorism that ‘the best is the enemy of the good’ could
produce an outcome that makes the status quo seem attractive.
This argument is open to challenge, however, since it assumes that political
philosophers can accurately predict the costs of changing social arrangements,
and in all circumstances. Political scientists, let alone political philosophers, find it
difficult to make such predictions; and in any case – say the defenders of normative
theory – the evaluation of social ideals should be distinguished from the evaluation
of policies designed to implement those ideals (O’Neill 1988). This is true to a
degree, but our accumulated human experience does provide solid evidence of
the unwanted consequences that can be generated by pursuing certain ideals. The
complexity of social causation need not reduce us to cognitive helplessness. While
the twentieth century experiment in communism is an obvious example, there
are other, less dramatic ones. We now know, for instance, that our high-minded
efforts to aid poor individuals and countries can result in debilitating cycles of
dependency. For a political philosopher simply to ignore such considerations
when devising an ideal scenario would seem to be remiss, given that they appear
to be grounded in unavoidable economic and administrative imperatives, and in
permanent patterns of human motivation. An ‘ideal’ theory is hardly ideal if its
implementation will almost certainly entail significant moral costs.
It could be argued, however, that this ‘realist’ argument is based on a narrow
understanding of the functions served by universal ideals. Furnishing a blueprint
for radical change is only one such function. As John Rawls (1999: 216) has
argued, an ideal conception gives us a standard by which to measure reality. How
could we ever use the term ‘unjust’ unless we had an ideal standard of justice
to guide our judgement? This is an unconvincing argument. In order to identify
individual cases of injustice, we need possess only a loose principle of fairness,
which need not aspire to universality or timelessness. It may simply be inherent
in the habitual practices of our society. How many people feel the necessity to
consult an ideal political philosopher before making such judgements?
We therefore come to the fourth and final criticism of political moralism: that it
lacks an historical perspective and shows no understanding that moral vocabularies
will necessarily vary over time and space (e.g. Williams 2005: 13). When it comes
78 Vilfredo Pareto

to morality, realists are cognitive pessimists, who doubt that such a thing as ‘truth’
exists or is usefully accessible to human intelligence. Political concepts, they
tend to believe, are subject to competing interpretations and historical changes of
meaning. It follows that the quest for an Archimedean point, removed from any
context, is futile. In its Marxist, or postmarxist, form, this perspective goes so
far as to accuse the liberal moralists of being bourgeois ideologists, reflecting in
their ideas and values the interests and experiences of their own class. To Mills,
their social ontology ‘will typically assume the abstract and undifferentiated
equal atomic individuals of classical liberalism’. This ontology is oblivious to
the ‘relations of structural domination’ that profoundly shape the thought and
behaviour of all social agents. The hypostatised individual that dominates the
discourse of liberal political philosophy, that ‘natural’ possessor of rights and
freedoms, that exemplar of rationality, is nothing but a false universal, a mental
construct, detached from the hegemonic ideologies and group-specific experiences
that distort our perceptions of the social order (Mills 2005: 168–72).
But one can reject the ‘spurious universalism’ (Mills 2005: 173) of normative
theory without endorsing class analysis and all its attendant intellectual baggage.
Pareto, for his part, insisted on the inevitability of historical and cultural variation
in the normative content of political concepts. Like Machiavelli and other realists,
he was hostile to ‘essentialism’ and to the assumption that ‘logic’ and ‘reason’
could or should dictate human behaviour (Pareto 1935: paras. 69, 300, 471).
For him, ethical standards were not universal and rational truths but historically
conditioned products of changing circumstances and shifting passions. The idea
that such standards had a purely ‘logical’ foundation was antithetical to his account
of human psychology, which assumed that’ sentiments’, or – in his distinctive
jargon – ‘residues’, determined our behaviour, and that what we call rational
judgement was merely an exercise in ex post facto justification for instinctive
preferences (1935: para. 359). For example, when a person says ‘That thing is
unjust’ what he really means, according to Pareto, is ‘that the thing is offensive
to his sentiments’ (1935: para. 1210). These psychic states (sentiments/residues)
were, in Pareto’s opinion, more or less universal responses, but their theoretical
expression – belief systems or ‘derivations’ – varied according to context. From a
Paretian perspective, then, the contractarian theory of Rawls would be dismissed
as ‘essentialist’ or ‘metaphysical’ in its assumption of an objective idea of justice,
floating above all historical and cultural particularities. Pareto was a critic of
contract theory, seeing it as a bogus and futile attempt to escape temporal criteria
of judgement (1935: paras. 1146, 1504–7). For him, political categories such as
‘justice’ are functional rather than objective – serving both psychic and social
needs. They can never achieve closure since their content – unlike their underlying
motivation – is culturally determined (1935: para. 1893). Pareto’s argument finds
an echo in those critics of Rawls – often cultural relativists – who maintain that
his theory of justice is nothing more than a liberal theory of justice, reflecting the
outlook of comfortable American professors.
 Pareto, Machiavelli, and the Critique of Ideal Political Theory 79

Rawls and other normative theorists might object that such criticisms confuse
questions of origin with questions of validation. The existence of historical and
cultural diversity does not rule out the possibility that one single idea or ideal is
indeed the true one, with the rest being impostors. Well, perhaps – but the liberal
idealists scrupulously avoid any reference to God or Revelation. In the absence
of divine intervention, what mysterious factor or attribute has allowed them to
overcome the cultural limitations that have afflicted all previous thinkers, and to
arrive at the one true concept of humanity? Pareto was contemptuous of such
pretentions. In his view, even if abstract moral absolutes did exist, we could never
discover what they are, as they correspond to ‘nothing real’, nothing tangible
(1935: para. 1551). Except in the realms of logic and mathematics, we cannot
demonstrate the truth or existence of what we cannot observe, or reduce to a set
of identifiable empirical operations, performances, or capacities. For Pareto, as
we have seen, abstract concepts such as ‘justice’ are used to designate specific
situations that agreeably stimulate our sentiments (1935: paras. 1210, 1609). Yet
normative philosophers persist in their tortuous efforts to ‘prove’ that the term
refers to some objective reality that is not immediately evident to the senses.
Pareto offers a psychological explanation for this otherwise puzzling ‘delusion’
(1935: para. 1501):

A person living in a civilised society becomes familiar with certain moral or

juridical relationships that are continually shaping his life, with which his mind is
gradually saturated, and which end by becoming part and parcel of his intellectual
personality. Eventually, through group-persistences, through his inclination to
take what is relative as absolute, he carries them beyond the limits within which
they may have been valid. They were adapted to certain circumstances, certain
cases, merely; he makes them serve all cases, all circumstances. So concepts of
an absolute morality and an absolute law come into being.

Pareto believes that the ‘residue’ of ‘sociality’ plays an important role here (1935:
para. 1429). If a person reading a poem exclaims, ‘It is beautiful’, he really means
that it seems beautiful to him. Given our social/imitative nature, however, anyone
hearing the exclamation will feel that the poem ought to make a similar impression
of beauty upon him. And so on and so forth. What was originally a subjective
preference is transmuted into an ‘objective’ fact. The perception grows that the
poem is beautiful, no matter what people may think of it.

Towards a Realist Alternative

Even if we accept, as I do, that the realist criticisms of political or liberal moralism
are convincing, this does not necessarily mean that realism constitutes a viable
alternative. Is it really possible, as Machiavelli and Pareto apparently claimed, to
have a purely empirical political theory, one that only explores (as the Florentine
80 Vilfredo Pareto

put it) ‘what is actually done’, not ‘what should be done’ (1975: Chapter XV, 91)?
Are normative preferences not built into our descriptive language? Do our factual
claims not often have an evaluative element? When we describe the glass of water
as either half empty or half full, are we not making a kind of value-judgement? Of
course, we could simply say that a realist theory of politics should be primarily
descriptive, even if it cannot avoid normative content altogether. When Pareto
(1935: para. 365) writes that it is ‘not the function of theory to create beliefs’, he
means that theorists should not presume to develop visions of the good society. It
is not a logical corollary that they should eschew any hint of evaluation in their
theoretical analyses. But there is a further question. Assuming it is possible, is
it actually desirable to avoid direct consideration of ‘what ought to be’? Are we
really willing to renounce the idea of a political ‘good’ that transcends the actual,
and to define politics as nothing more than the struggle for power and advantage?
As Rawls has pointed out, ‘the limits of the possible are not given by the actual’
(1999: 12). Not without reason, the realist outlook is routinely lambasted for
reifying the present by identifying existing arrangements with abstract necessity.
Despite their frequent professions of perfect scientific impartiality, neither
Machiavelli nor Pareto rejected all normative claims. Although they offered
no explicit conception of ‘the good’, nor any notion of the ideal arrangement
of society, they both expressed clear political preferences. The former thinker
defended the virtues of republican governance and called for the expulsion
of foreign forces from the Italian peninsula; the latter was a champion of free
market principles. Rather like Marx, however, they saw these preferences as
emerging, almost naturally, from their empirical observations. When discussing
Machiavelli, Antonio Gramsci – Marx’s most eminent Italian disciple – reminded
us that hostility to abstract universals does not necessarily exclude normative
aspirations, as long as these originate in real, observable social trends, and not
in ‘idle fancy, yearning, daydream’. Far from being a Kantian moral imperative,
the ‘ought-to-be’ is, properly conceived, a projection of forms and principles
inherent in existing reality (1971: 130, 172). Gramsci is not saying that values can
be logically deduced from facts about the world; he is simply saying that political
values and goals should have a factual, as opposed to speculative, basis. It seems
to me that the normative preferences expressed by Machiavelli and Pareto satisfy
this criterion. In their writings, we can find the outline of a ‘realistic’ political
theory that can nevertheless transcend the present and fulfil the natural human
desire for improvement. The theorist, on this conception, immerses himself in
‘what exists’ in order to change society. But why does the realist thinker want
to change society? After all, he disparages the doctrinal liberal for seeking to
eradicate the mysteries of the human world by substituting for them the certainty
of applied reason. The answer perhaps lies in what is, for political realism, the
primary political objective: namely, the establishment of order and the conditions
for cooperation. To most realists, the requirements of good order will not remain
static. Because of the appetitive and competitive nature of human beings, order is
precarious and susceptible to being undermined by any of the infinite variety of
 Pareto, Machiavelli, and the Critique of Ideal Political Theory 81

life’s contingencies. Given this existential instability, given this assumption that
transience is part of the human condition, the maintenance of a balance of mutual
advantage will often entail the need for innovation. Ought propositions, in other
words, would be fundamentally determined by the struggle for power, and not by
a desire to impose timeless moral truths.
In defence of this position, Gramsci refused to accept a dichotomy between
realism and idealism (1971: 172):

The opposition between Savonarola and Machiavelli is not an opposition

between what is and what ought to be … but one between two concepts of what
ought to be: the abstract and phantasmagorical concept of Savonarola, and the
realistic concept of Machiavelli.

Machiavelli was keen to mobilise the Italian people for progressive ends –
ultimately, the creation of a unified national state. But, to him, these ends were not
imaginative constructs or logical deductions from first principles. To the contrary,
they were practical aspirations, grounded in objective historical forces. Gramsci,
in his attempt to explain the nature of Machiavelli’s project, distinguished between
two types of realism: one wishes only to ‘manage’ the status quo, to preserve the
existing configuration of power; the other is willing to pursue a radical agenda,
since it views empirical reality not as ‘something static and immobile’, but as ‘a
relation of forces in continuous motion’ (1971: 172). Gramsci saw his own thought
(and Marxism in general) as exemplifying this ‘transformative’ type of realism,
whose origin he attributed to Machiavelli.
Pareto, too, maintained that the social system is ‘constantly changing in form’
(1935: para. 2067). It is ‘never at perfect rest’, he informs us; ‘it is in a perpetual
state of becoming’ (1966: 299). While he focuses on social equilibrium, it is a
dynamic equilibrium, analogous to that of a living organism, not one defined
by coexisting properties in a static system (Pareto 1935: para. 2072). It was
mentioned earlier that realists could advocate change as a way of preserving
social order in the face of instability. The richness of Pareto’s analysis allows
us to explore this idea in greater depth. By way of preliminaries, let us bear in
mind that realism, in the Machiavellian sense, is not just about practicality; it
also involves the uncovering of hidden truths (motives, power relations, perverse
consequences) lurking beneath the veneer of pieties and platitudes that sustains
the status quo. The realist typically wants to lift the veils of euphemism and
portray social and political life as it really is, without embellishment. In this sense,
the realist, even if he veers to the right, is never conventionally conservative; he
is alive to the contingencies and dysfunctions of society, and – at least in the
cases of Machiavelli and Pareto – takes pleasure in pointing them out. Even if we
remove Marxist ‘realists’ from the equation, the realist mind-set is potentially, if
not actually, subversive; its attachment to ‘what is’ smacks of conditionality. The
underlying structural reality of society may point in a different direction from its
professed values and objectives. In Pareto’s equilibrium theory, the fundamental
82 Vilfredo Pareto

reason for such a discrepancy might lie in economic development, which often
requires a corresponding change in the collective psychology or thought-processes
of society in order to restore stability (Pareto 1935: para. 2340). As a realist,
Pareto was hostile to change that originated in abstract theoretical schemes or in
what he dismissed as ‘sermonizing’ (1935: para. 2016). Such change he described
as ‘artificial’ rather than ‘normal’ (1935: paras. 2067–8), for it is disconnected
from observable social trends. His equilibrium model is broadly ‘functionalist’
in the sense that actions, whether individual or collective, are ‘selected’ by their
functional consequences. In his phrasing: ‘It is a matter of selection, the choice
being dictated by the nature of the system’ (1935: para. 2268). What is functional
at one time may not be functional at other times. Changing circumstances (not just
economic change, but also events such as defeats in war or political upheavals)
may cause a ‘normal’ disturbance to the social balance. Existing modes of
belief and political behaviour may appear ‘at odds with reality’ and therefore
unsustainable in present form. A ‘society which is not eager to decline or perish
must necessarily reject them’ (Pareto 1935: para. 2340).
Those who approach society from a broadly functionalist and realist perspective
will not always converge on the identification of dysfunctions or on their solution.
A Marxist like Gramsci will stress the supposed contradictions of capitalism, along
with their resolution in a form of radical socialism. Pareto, a staunch defender of
capitalism, would hardly agree. It should be clear by now that a realist analysis
cannot entirely detach itself from value preferences. As Gramsci recognised,
however, there is no contradiction here. Such preferences are compatible with
realism provided that they are embedded in society and do not express mere
‘yearning’ or ‘daydream’. Of course, patterns of thought and behaviour in any
modern society are complex and variable. Deciding which potential changes
are ‘intrinsic’ and which are – in Pareto’s parlance – ‘artificial’ will inevitably
involve a large degree of subjectivity – and this indeterminacy could be seen as
a weakness. But what I think I have shown is that political moralism, with its
exclusively normative concerns, does not enjoy a monopoly of political morality.
Those who reject the abstract idealism of Anglo-American political philosophy
are not thereby condemned to act as apologists for the status quo. And in their
search for guidance in these matters, they would do well to consult the teachings
of Machiavelli and Pareto.

References

Coady, C.A.J. 2008. Messy Morality: The Challenge of Politics. Oxford: Clarendon
Press.
Cohen, G.A. 2003. Facts and Principles. Philosophy and Public Affairs, 31(3),
211–45.
Farrelly, C. 2007. Justice in Ideal Theory: A Refutation. Political Studies, 55(4),
844–64.
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Femia, J.V. 2006. Pareto and Political Theory. New York and Abingdon:
Routledge.
Geuss, R. 2008. Philosophy and Real Politics. Princeton, NJ: Princeton University
Press.
Gramsci, A. 1971. Selections from the Prison Notebooks, translated and edited
by Q. Hoare and G. Nowell Smith. London: Lawrence and Wishart [The
Notebooks were written between 1929 and 1935].
Machiavelli, N. 1975. The Prince, translated by G. Bull. Harmondsworth: Penguin
[First published in 1531].
Miller, D. 2005. Against Global Egalitarianism. The Journal of Ethics 9(1), 55–79.
Miller, D. 2008. Political Philosophy for Earthlings, in Political Theory: Methods
and Approaches, edited by D. Leopold and M. Stears. Oxford: Oxford
University Press, 29–48.
Mills, C. 2005. “Ideal Theory” as Ideology. Hypatia, 20(3), 165–84.
Nagel, T. 1987. Moral Conflict and Political Legitimacy. Philosophy and Public
Affairs, 16, 215–40.
Newey, G. 2001. After Politics: The Rejection of Politics in Contemporary Liberal
Philosophy. Basingstoke: Palgrave.
O’Neill, O. 1988. Abstraction, Idealization and Ideology in Ethics, in Moral
Philosophy and Contemporary Problems, edited by J.D.G. Evans. Cambridge:
Cambridge University Press, 55–69.
Pareto, V. 1935. The Mind and Society (4 volumes), translated by A. Bongiorno
and A. Livingston. London: Jonathan Cape [First published in 1916 under the
title Trattato di sociologia generale].
Pareto, V. 1966. Trasformazione della democrazia (1921), in Sociological Writings,
translated by D. Mirfin and edited by S.E. Finer. Oxford: Basil Blackwell,
299–325.
Pogge, T. 1994. Cosmopolitanism and Sovereignty, in Political Structuring in
Europe: Ethical Perspectives, edited by C. Brown. London: Routledge.
Raikka, J. 1998. The Feasibility Condition in Political Theory. The Journal of
Political Philosophy, 6(1), 27–40.
Rawls, J. 1999. The Law of Peoples. Cambridge, MA: Harvard University Press.
Shklar, J. 1989. The Liberalism of Fear, in Liberalism and the Moral Life, edited
by N. Rosenblum. Cambridge, MA: Harvard University Press, 21–38.
Williams, B. 2005. In the Beginning was the Deed: Realism and Moralism in
Political Argument. Princeton, NJ: Princeton University Press.
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 Chapter 5
The Idea of a Sociology of Risk and
Uncertainty: Insight from Pareto
Alasdair J. Marshall and Marco Guidi

Introduction

Pareto’s (1935) The Mind and Society (originally published as the [1916] Trattato
di Sociologica Generale) will be re-read here as a sociology of risk and uncertainty.
To be clear, the terms ‘risk’ and ‘uncertainty’ held no sociological significance
whatsoever for Pareto. Nonetheless, we suggest his sociological thought can
usefully be recast in a risk and uncertainty discourse. This concern will lead us to
clarify Pareto’s sociological purpose by situating the Treatise in the long tradition
of Machiavellian realism. Our re-reading will also deliver up a unique way of
thinking about what it means to be exposed to risk, and to be uncertain, in our
individualised, complex, fast-paced world.
Many definitions have been proposed for risk and uncertainty (Samson et al.
2009). When we conceive of risk within the ‘logico-scientific’ or ‘positivist-
probabilistic’ paradigm (Ben-Ari and Or-Chen 2009), our concern is usually
to estimate probabilities (frequencies) and consequences (magnitudes of loss)
for possible occurrences. Frank Knight (1921) argued that where these are
objectively measurable (e.g. with actuarial loss data) we have ‘risk’. Without
such measurement, we have mere ‘uncertainty’. Of course, we can only guess
probabilities and consequences in many cases. Hence many ‘risks’ pushed through
cyclical risk management processes and entered in risk registers are actually
Knightian uncertainties (Power 2007).
Some recent psychology literature defines Knightian uncertainty more
broadly as ‘the state of an organism that lacks information about whether, where,
when, how or why an event has occurred or will occur’ (Bar-Anan et al. 2009).
This allows psychologists to study uncertainty as an aversive state that we
escape by acquiring risk information. However, it is too simplistic to conceive
of uncertainties as transforming into risks as empirical knowledge about events
stacks up. The ancient Greek distinction between episteme (true knowledge)
and doxa (opinion or prejudice) is useful here. It leads us to consider that whilst
awareness of risk can always be considered true knowledge, uncertainty may
comprise subjective belief about risk, including error and distortion produced by
culture and personality. Our experiences of uncertainty might then include what
86 Vilfredo Pareto

Bourdieu (1990, 20) called those ‘doxic experiences’ that shape our ‘illusions of
immediate understanding’. Uncertainty thus becomes a state of risk ignorance
and complacency, resulting from the naturalisation and normalisation of our
thought over time, and leading us to forget that the objective world of risk can
surprise us by behaving contrary to expectation. This state might sometimes
be explained with reference to how our internalisations of risk are distorted
through framing. Kuypers’ (2009) contribution to frame analysis literature
emphasises that frames can be rhetorical devices which filter perception to
produce simplifying narratives that explain, evaluate, and invent remedies for,
situational challenges (i.e. risks). We can be uncertain both within these frames
and about these frames’ veracities.
Useful differentiations between risk and uncertainty don’t need to take this
route. Chapman and Ward (2002) have contrasted risk and uncertainty with no
explicit reference to doxa, treating uncertainty as true knowledge of ‘variabilities’
and ‘ambiguities’ that provide useful preliminary context for risk identification.
Yet for our purpose we prefer a strong ontological differentiation between risk and
uncertainty, which situates risk within objective reality and states of uncertainty
within doxic experience. Following Pfeffer (1956), we conceive of risk as a
‘state of the world’ and uncertainty as a ‘state of mind’. We regard culture and
personality as forming states of mind, and as supplying us with strategies for
engaging with Knightian uncertainties and risks in consistent and predictable
ways, across time and place (which is of course an important condition for social
action). Hence our experience of uncertainty comprises our affective, emotional
and intellectual experience of all the cultural and personological factors that weigh
upon each decision-making factum we encounter, perhaps most heavily when we
are oblivious to risk, but also when we act with hazy impressions of risk, and
sometimes when we think we know risk well.
And yet, to conceive of uncertainty as always being about some risk is to
needlessly limit its scope to our beliefs concerning how the present may transform
into possible futures. Uncertainty can be about much more than this. Consider that
we are often uncertain regarding:

a. our motivations,
b. our beliefs about the world, and
c. the best means by which we might pursue our objectives.

As we will soon see, our re-reading of what Pareto said in the Treatise about social
action, leads us to view our experience of uncertainty as our sensitivity to the
awkwardness of fit that bedevils forever shifting relations between (a), (b) and (c).
Our re-reading will lead us to use the term thoroughgoing uncertainty to refer to
the sensitivity of the decision-maker to the dissonance that opens up between (a),
(b) and (c) each time change occurs in (a), (b) or (c).
 The Idea of a Sociology of Risk and Uncertainty 87

Seeing Risk Clearly: Intense Realism

Our differentiation between uncertainty and risk allows the gulf between the mind
of the decision-maker, and objective reality, to become the focus of our attention.
This has been quite deliberate, because it sets us, just as Pareto set himself over a
century ago when he first ventured from economics into sociology, firmly within
the tradition of Machiavellian realism. Realists have long been fascinated by
the manifestness of objective reality, arguing that in order to think and act well
we must first accomplish something many find impossible, which is to see well.
Chapters 5 through to Chapter 9 of Niccolo Machiavelli’s (1513/1966) The Prince
famously discussed the ‘New Prince’ as gaining power through effective sense-
making amidst political chaos and the fog of war. The New Prince sees the world
as it really is, once all the religious, moral and superstitious frames that separate
us from it have been removed. Where others blinker themselves with opportunity
or threat frames, the New Prince is able to appreciate that reality is neither good
nor bad in its own right. This allows him to keep scanning for both opportunity and
threat in every situation. Where others relinquish opportunities for action because
they have framed events as predetermined or unavoidable ‘fate’, the New Prince
can instead appreciate the ‘chance’ nature of things. As Machiavelli famously put
it, he might usefully conceive of fortune as a woman who allows herself to be
mastered by the impetuous, or as a river whose flood currents we can resist if we
act with foresight to build flood defences. Machiavelli’s New Prince is also no
slave to the past. Having an eye for emergent detail, and knowing that novelty and
change may require the jettisoning of old assumptions and the creation of new,
more relevant ones, he can thrive during periods of change.
Strategy author Robert Greene has recently collaborated with a famous rap
musician, Curtis Jackson (better known as ’50 cent’) to write a (2009) bestseller
which brings Machiavellian realism to a wholly new and enthusiastic readership.
They regard the above qualities of mind as combining to form what they call
intense realism. Their central argument is that in our increasingly chaotic, high
velocity world, where ‘complete objectivity’ is becoming an ever more elusive
goal, intense realists who act fearlessly will increasingly outmanouevre their
opponents. Their link between intense realism and strategic advantage chimes
with a number of contemporary management literatures, which emphasise that
firms must continually update corporate strategy to adapt to changing conditions
(Hamel and Valikangas 2003) and which ask firms to position themselves ‘at
the edge of chaos’ (Brown and Eisenhardt 1998). Recent advances in marketing
theory resonate particularly well with their warning that reality is less manifest
than we typically assume it to be. Customer insight theory is today steadily
overturning the traditional marketing view that markets and customers are readily
understood using conventional marketing techniques. Working from the realist
axiom that customers and markets are hard to fathom, it proposes systematic
organisational scanning and problem-solving, aimed at yielding only very rare
88 Vilfredo Pareto

moments of customer or market insight that can have potentially great competitive
and strategic value (Smith and Raspin 2008). This effectively converts intense
realism from mental state to management philosophy and process.
Iiterature concerned with the mental alertness and vigilance demanded in high
reliability entities such as nuclear aircraft carriers, places an even higher value
on intense realism, although it prefers to use the term ‘mindfulness’ to denote
its constituent mental qualities. Weick and Sutcliffe (2001: 42) list these as: the
ability to scrutinise existing expectations, to refine and differentiate expectations
whenever new experiences arise, to invent new expectations that help deal with
novel events, and to continually strive for a keener understanding of context.
Our Paretian sociology of risk and uncertainty will rearticulate all of these
realist positions, which warn that the world is less manifest than is often perceived,
and that all of the qualities of mind which we might cultivate to get closer require
a great deal of effort, because to overturn lazy common sense is no easy task.
In order to read Pareto’s Treatise as a sociology of risk and uncertainty, then, it
is helpful to consider his theory as one of widespread failure to internalise risk,
caused by widespread failure to cultivate intense realism. Just like Machiavelli’s
fifteenth century guidance to the Prince, Pareto’s Treatise is concerned with risk
insofar as it discusses the objective realities that challenge decision-makers, and
the strategies that are objectively necessary under these conditions. And just like
Machiavelli’s guidance, it is concerned with uncertainty insofar as it emphasises
the sociological reality of widespread failure to see, think and act well, as the
background risk environment continually changes. As we will now see, both
Machiavelli and Pareto explained these failures of intense realism as arising from
the same rigidities of personality.

Human Nature as a Bestiary of Lions and Foxes

Pareto’s sociology can be read as linking risk and uncertainty in a particular way.
Arthur Livingston’s (1935) English translation of the 1923 Italian version of the
Treatise was renamed The Mind and Society to highlight what Livingston called,
in his Treatise foreword, Pareto’s greatest achievement:

to illumine the whole relation of thought to conduct, and of thought to sentiment,

and the relation of the individual in all his mental processes to the society in
which he lives.

To rephrase this in the language of risk and uncertainty, we will argue that Pareto
was interested in two fundamentally different kinds of objective riskscape, each
of which can influence the development of phenotypical personality and culture
towards a particular subjective experience of uncertainty. We will suggest that
the two alternating personological and cultural expressions of human nature
which come to the fore in Pareto’s discussions of elite strategy and culture, could
 The Idea of a Sociology of Risk and Uncertainty 89

well have the evolutionary function of rendering us more resilient within the
two alternating background riskscapes which come to the fore in his writings on
history. As we will show, Pareto’s writings are highly consistent with the idea that
humanity has evolved separate skillsets for living as social beings through periods
of austerity (‘crystallised social forms’) and periods of social complexification
(‘individualised social forms’). Much of the Treatise can be read as deriding our
use of the wrong skillset at the wrong time throughout European history.
To be very clear, Pareto was no evolutionary psychologist. His ‘mid-Victorian
understanding of psychology’ (Meisel 1965: 28) led him to fill the Treatise with
a sometimes misleading lexicon of ‘instincts’ and ‘sentiments’ (e.g. Pareto 1935:
§870, §888). However, we know that he conceived the influence of mind upon
elite thought and behaviour as the influence human universals have exerted down
the centuries, simply because he used the same personality typology to explain
decisions made by elites throughout the whole sweep of European history.
This concern with human universals reflects the towering influence of Niccolo
Machiavelli within Italian social theory (Burnham 1943). Machiavelli famously
gave us the idea that the ideal Prince should be both ‘lion’ and ‘fox’. Careful
analysis of both his fictional and non-fictional writings (e.g. Rebhorn 1988)
shows a preoccupation with two very different personality types. One of these,
Machiavelli represented as the ‘epic hero’ or ‘farmer warrior’, who shares with
modern conservative personality a concern with social order founded upon
internalised norms. The other was the renaissance cultural icon of the confidence
trickster who emerges amidst rapid social change and who shares with today’s
liberal personality a critical scepticism towards norms. Machiavelli’s most famous
expression of this personality typology occurs in Chapter 18 of The Prince where
we are told that the ideal Prince must be both a lion capable of force and a fox
capable of fraud.
As Rebhorn points out, Machiavelli’s real Prince tends to remain trapped
within personality as either lion or fox. Hence the purpose of Machiavelli‘s written
guidance was to encourage the real Prince to develop at least some of the ideal
Prince’s mental flexibility and versatility (or intense realism). To appreciate the
sociological ‘guidance’ offered by Pareto’s sociology we can replace ‘Prince’
with ‘elite’ here. Pareto treated mind as sociologically significant because it has
manifested itself, from the early Greek tyrannies right through to twentieth century
Europe on the verge of fascism, in two basic configurations which correspond to
the attributes of Machiavelli‘s ‘lions’ and ‘foxes’ (Marshall 2007). He viewed these
as forever competing to set the tone for elite culture, psychology and decision-
making.
Although Pareto believed there will usually be more foxes at the top and more
lions at the bottom of any elite (e.g. Pareto 1935: §2268) the overall proportions
are important because they influence elites to behave in ways that determine their
adaptive fit to the times. Pareto’s sociological theory is therefore a Machiavellian
theory of both mind and society in the sense that just as there are foxes there are
90 Vilfredo Pareto

vulpine societies within which vulpine elites may prosper; just as there are lions
there are leonine societies within which leonine elites may prosper.
And yet, for Pareto, mind and society do not automatically adjust to fit
each other. Rather, what matters is that the degree of fit becomes the focus for
sociological analysis. As Charles Powers points out in his chapter (in this volume),
societal change may create pressure for change of mind and culture within the
elites, yet the future is always open and they can resist this pressure, perhaps
settling into ‘sticking points’ where they become maladapted but may retain power
with a dysfunctional fit to societal conditions for many years. As John Higley and
Jan Pakulski similarly observe in their chapter, Pareto’s elites follow life cycles
of birth and decline. As they approach their end they degenerate into increasingly
resource-consumptive squabbles with non-elites and rival elites.
We can better appreciate this intransigence and degeneration by clarifying that
for Pareto, as for Machiavelli, human nature is a bestiary. Their lions and foxes are
(to use a phrase more commonly attributed to Keynes) animal spirits that emerge
to exert highly permanent influences upon elite thought and behaviour. As times
change, new social conditions may draw forth or repress either. Old patterns may
persist as cultural survivals long after the conditions that produced them have
passed. Pareto treated the emergence of these patterns as a zero sum game: social
conditions that repress the lions draw forth the foxes (and vice versa), such that
lions and foxes each correspond to sometimes latent, sometimes active expressions
of universal human nature which have a strong tendency to emerge separately as
guides to social action.
So in what sense are Machiavelli and Pareto therefore concerned with the
interplay of risk and uncertainty? Consider that Machiavelli famously advised
the ideal Prince to use the ferocity of the lion to‘fright away the wolves’ and the
guile and cunning of the fox to ‘avoid the snares’. In each case a particular kind
of riskscape is at issue (wolves or snares). In each case, Machiavelli’s guidance
recommends a strategy (force or fraud) for successfully negotiating that riskscape.
Pareto’s sociology follows this pattern. It is about risk inasmuch as it is concerned
with how broad societal change varies the riskscapes (crystallised or individualised
social forms) within which elites take decisions. It is about the subjective experience
of uncertainty in as much as it highlights elite strategies, rooted in human nature
(force or fraud) which can provide heuristic guidance for each riskscape. Both
Machiavelli and Pareto, then, were concerned with how culture and psychology
prime us to become more resilient within particular kinds of riskscape. They show
how we negotiate uncertainty against background conditions where certain types
of risk have proven sufficiently prevalent as to shape personality and culture, but
where many individual risks cannot be, or are not, anticipated.
This kind of ‘fit’ between risk and uncertainty is bound to be imperfect.
Pareto has been accused of having an ‘error complex’ (Meisel 1965). The Treatise
makes endless references to European history, spanning the early Greek tyrannies
right through to the twentieth century, where kings, tyrants, prime ministers,
chancellors, generals, priests, astronomers, philosophers, whole political and
 The Idea of a Sociology of Risk and Uncertainty 91

economic elites are mocked and derided. Pareto highlights countless elite
behaviours which undermine elite interests and are maladaptive to the times, and
countless more elite beliefs which serve as post-hoc rationalisations for these
behaviours, justified more through the invocation of convenient metaphysical
entities and rhetorical contrivances than through recourse to the disciplining
power of fact and experience. To couch this in risk terms, the Treatise revels in
many examples of elite maladaptivity where elites negotiate uncertainty poorly,
with the consequence that risks threatening their continued existence intensify and
eventually become unsurvivable. Hence Pareto’s famous expression: history is a
‘graveyard of aristocracies’.

Pareto’s Residues

Instead of writing about vulpine elites, Pareto preferred to talk about elites strong
in ‘class I residues’; instead of writing about leonine elites, he preferred to write
about elites strong in ‘class II residues’. Pareto labels his ‘class I’ residues the
‘instincts of combination’. This plays on the Italian word combinazione and
carries those strong connotations of both guile and creativity that Machiavelli
attributed to his foxes. Pareto labels the class II residues as involving ‘the
persistence of aggregates’, a term that rearticulates the conservative intransigence
of Machiavelli’s lions. Pareto’s emphasis upon these two residues for purposes of
sociological explanation (Pareto 1935: §2194) entails that the Treatise shares with
cultural theories of risk (Douglas and Wildavsky 1982; Thompson et al. 1990) a
broad concern with alternative ‘ways of life’ that situate the mind within society.
Cultural theory is concerned with how and why sometimes very complex and
subtle orientations towards risk develop within ‘individualistic’, ‘egalitarian’,
‘hierarchical’ and ‘fatalistic’ cultural contexts. Pareto’s class I and class II residues
correspond very broadly to liberal-individualist and conservative-collectivist
ways of life, which are also considerable for the orientations towards risk that
develop within them. Marshall (2007) shows how Pareto brought together the
themes of entrepreneurial risk taking, liberalism and innovation within the class
I residues, while the class II residues represent the opposite polarities of risk
aversion, conservatism and intransigent preference for the status quo. Marshall
demonstrated that much psychometric evidence strongly confirms these clusters
and allows Pareto’s class I and class II residues to be explained from perspectives
in psychology and sociology.
Much of Pareto’s discussion of the residues focuses upon strategies for
managing social conflict between ruling elites, prospective elites and non-elite
masses. Elites strong in class I residues use fraud to negotiate these relations
while elites strong in class II residues use force. Pareto viewed both residues
as always present, yet as varying in relative intensity right across the social,
political and economic elites, as societies move through periods of austerity and
prosperity (Pareto’s ‘crystallised’ and ‘individualised’ social forms). As societies
92 Vilfredo Pareto

move towards austerity, the conservative class II residues tend to intensify across
the elites. As Marshall (2007) pointed out, this view is consistent with much
contemporary research which discusses the influence of social threat (e.g. Duckett
and Fisher 2003) and economic instability (e.g. Abramson and Inglehart 1995) upon
personality and attitudes. To find support for Pareto’s belief that richer and more
prosperous social conditions produce a cultural and psychological shift towards
the class I residues, on the other hand, we can usefully consult the voluminous
and growing literature that charts the growth of ‘Machiavellianism’ and related
constructs within modern society as it has grown wealthier, more complex, more
turbulent, and as it has speeded up over the course of recent decades.
We have only known for about a decade that the psychological construct of
‘Machiavellianism’ overlaps substantially with ‘narcissism’ and ‘psychopathy’ to
form what is now widely referred to as a dark triad of socially aversive traits (see
Paulhus and Williams 2002). Hence we can consult such popular texts as Babiak
and Hare’s (2006) Snakes in Suits or Maccoby’s (2003) The Productive Narcissist
about the changing psychological composition of modern business elites, to find
more than a grain of truth in Pareto’s class I residues. What we might provocatively
call Pareto’s ‘dark triad’ representation of liberal-individualistic ways of life lays
down an enormous challenge to us, a century after he wrote, to think about the
modern experience of uncertainty in a particular way. He provides us with a
unique theoretical perspective from which we might frame the problem of how
risk is (mis)handled by elites within modern society. Do we live in a world where
Machiavelli’s ‘foxes’ populate the higher echelons of the political and economic
elites, taking decisions under uncertainty which fall heavily under the influence of
the cognitive biases, attitudes, values, ego defensive requirements and emotional
needs of the ‘Machiavellian’, ‘psychopathic’ or ‘narcissistic’ personality? Pareto’s
sociology, considered as a sociology of risk and uncertainty, encourages us to
think carefully about aspects of the modern riskscape that advantage and stimulate
the dark triad pattern. And it provides useful insight into exactly how the dark triad
pattern might negotiate uncertainty within the modern riskscape.
This chapter will conclude by illustrating just some of the richness of this idea
missed by previous Pareto commentators. Before that, however, the following two
sections will look more closely at the conceptions of risk and uncertainty that
emerge from specific passages within Pareto’s Treatise.

Risk in Society

This section will explain that ‘risk’, seen from the perspective of Pareto’s sociology,
has a particular characteristic: it weaves its way freely between social, political
and economic life. Hence the clearest and longest sightings will be enjoyed by
those prepared to look without prejudice from multidisciplinary perspectives. This
is, of course, not an easy thing to attempt. Modern multidisiplinary risk research
now encounters many of the same challenges that a century ago obstructed
 The Idea of a Sociology of Risk and Uncertainty 93

Pareto’s effort to build his general sociology. Many of the ‘risks’ dealt with by risk
sociology are just like Pareto’s ‘residues’ in that they range freely across social,
political and economic boundaries. Hence they require the broad understanding of
the polymath, not the narrow competence of the specialist who today dominates
within academia and the professions. So what approach can the polymath take,
to produce analyses superior to those of specialists? Clearly, some conceptual
reductionism is necessary. As we will see within this section, when the Paretian
sociologist refers to ‘residues’, as when the risk sociologist refers to ‘risks’, both
reduce the complexity of their subject matter with a simplifying makeshift term for
causal patterns that may be significant, to different people, for different reasons,
across different life domains.
Practicing risk managers must think as generalists whenever they categorise
risks prior to their allocation to organisational specialisms. They know that
conventional categories of ‘economic risk’, ‘political risk’, ‘reputational risk’,
‘stakeholder risk’, ‘regulatory risk’ etc., struggle to accomodate many significant
‘cross-cutting’ risks. Framing problems quickly arise such as when is an
operational risk not a financial risk? Whilst some categorisation must precede risk
allocation and treatment, narrow categorisation may frame risk so as to reveal
only the tip of an iceberg. Risk sociologists encounter similar problems when
constructing narratives that tell the story of a risk. Such narratives easily become
far too reductionist when they narrow their interest towards particular groups said
to be exposed to the risks, or towards particular life domains within which these
exposures are said to occur. Habitual reliance upon particular socially constructed
concepts, to elucidate each individual risk dynamic, can also present problems.
What the Paretian sociologist, the risk sociologist and indeed the practicing
risk manager all have in common then, is a need to think as homo universalis
and develop forms of knowledge which are not mired within social, political or
economic life but rather express their interconnectedness. Hence the risk manager
struggles to develop appropriate risk categories, the risk sociologist struggles to
represent risk as a narrative traceable through society, polity and economy, and the
Paretian sociologist refers awkwardly to the ebb and flow of the class I and class
II residues across society, polity and economy, always saying little but inferring
much about the sorts of risks that may be at issue across various life domains. All
do this because they know that important social forces operate across life domains.
Without referring specifically to ‘risk’, Pareto recognised that the sorts
of important causal sequences that sociologists may be interested in, cannot
adequately be explained from any single reductionist perspective. He insisted,
contra Marx, that economy, polity and society each deserve no primacy within
causal explanation. Instead he recognised complex interaction between these
domains through his metaphor of social equilibrium (Pareto 1935: §2552, §2207).
The individual person supplies the ‘molecules’ of the social system. Just as
molecules bind into molecular compounds, individuals are bound by ‘residues’
which supply the social system with basic ‘elements’ (Pareto 1935: §2079–80);
which is to say, organising principles for social action.
94 Vilfredo Pareto

Pareto viewed society as ‘constantly changing in form’. The class II residues

become adaptive within ‘crystallised’ social forms where economic conditions
are characterised by material austerity, political conditions are characterised
by centralised militaristic or theocratic government, and social sentiment is
characterised by fierce and unquestioning internalisation of dominant social and
moral norms. Class I residues become adaptive for ‘individualised’ social forms
where economic conditions improve, polities decentralise, power is parcelled
out amongst an increasingly rich civil society, and social sentiment turns
towards critical doubt. In Pareto’s (1935: §2206–36) writings on the Cycles of
Interdependence we are told that basic social forms change constantly between
these poles as the grand historical cycle (comprising the three interdependent
social, political and economic sub-cycles) runs its course.
Pareto argued that whenever some ‘artificially induced modification’ is induced,
‘at once, a reaction will take place, tending to restore the changing form to its
original state as modified by normal change’ (Pareto 1935: §2067). Social change
(through phases of crystallisation and individualisation) therefore sweeps us along
like a strong river current (Pareto 1935: §2071). We might add that when elite
decision-makers induce, or are affected by, a disequilibriating movement within
Pareto’s social equilibrium, they become exposed to risks comprising social forces
of equilibrial restoration.
When elites perturb social equilibrium by acting with residues contrary to
those present across the elites as a whole, they may face problems of cultural
misunderstanding or clash. These problems may well be described as ‘soft’ risk
issues. For example, a political elite that authorises the use of military force to
disperse a violent mob may shock powerful liberal elements across civil society.
However, the more important ‘hard’ risk issues that arise from Pareto’s theory
of social equilibrium are those that occur when elites resist the broad patterns
of societal change that Pareto considered bound up with the slow turning of the
historical cycle.
Charles Powers (1987) helps us to appreciate these harder risk issues by listing
causal mechanisms that both drive and synchronise the social sentiment, political
and economic cycles. In each case, mind and culture play an important role in
either facilitating or obstructing change. What is perhaps most interesting here,
is a methodological individualism which treats the individual decision-maker
as someone whose simultaneous exposure to social, political and economic
domains, leads them to resolve their experiences into consistent ways of seeing
and interacting with the world, which they then apply to their decisions across all
of these domains. For example, in Powers’ (1987, 122) account of the dynamics
linking public sentiment to economic productivity, we are told that relaxed social
prescriptions render self gratification more legitimate, which stimulates consumer-
driven economic growth, as well as broad infrastructural transformation to a
consumer economy.
This of course has implications for how a government seeking to promote
economic growth might frame the risks it faces: conservative social attitudes can
 The Idea of a Sociology of Risk and Uncertainty 95

be viewed here as possible drag factors on economic growth, or perhaps as factors

that threaten to send economic growth into reverse. Hence prospects for economic
growth will depend on whether class I residues intensify across both economic
and social domains. In his (1987: 138) account of the dynamics linking public
sentiment to political organisation, we are presented with the further idea that as
central political authority erodes, and as government becomes more responsive to
citizen demands, co-optation will come to the fore as a political control strategy.
The enjoyment of, and increasing expectation of, forms of patronage that are
extended by government, will stimulate hedonistic social attitudes. Here a possible
risk is that conservative social attitudes may, in addition to retarding economic
growth, lead many to view government by co-optation as ‘corruption’, thus
advantaging political extremists who would impose highly centralised political
rule, and who may quickly seize upon any economic contraction as an opportunity
to capitalise on popular discontent with democratic rule. The severity of this risk
will depend upon the rate at which class I residues intensify right across across
social, economic and political domains.
Interrelationships between social, economic and political domains that
determine prospects for political and economic elites may be very tight indeed.
Consider for example prospects for social freedom, economic development and
political democratisation in Afghanistan, a country which Pareto would surely
have considered locked in the intense cultural and psychological grip of the class
II residues, and whose prospects, looking forward over the next few decades, he
would surely have equated with prospects for the growth of the class I residues
across the elites. Looking from a Paretian perspective, initiatives such as the UK
government’s 2011 policy of targeting foreign aid spending towards educational
projects which seek to ensure that young Afghan and Pakistani children
do not turn to terrorism, seem unlikely to succeed where there is no broader
cultural shift towards the class I residues across society, economy and polity.
Arguably, in time, if the class I residues do intensify amongst Afghanistan’s
emerging elites, then the country could experience a liberal Afghan Spring. For
Pareto, that may well bring an end to any political or economic elite foolish
enough to cling to the class II residues. However, looking even further ahead,
to a time when new elites, steeped in the class I residues, have ascended, it is
worth considering that for Pareto this would amount to nothing more than the
raising of the curtain upon a new act in the age-old drama of elite downfall.
He would be quick to point out that the same psychological and cultural
proclivities that give emergent elites strong in class I residues their progressive
or revolutionary character (manifesting as clamourings for change, freedom and
quality of life) can also appear within more mature political and economic elites
as psychological and cultural dysfunctions (manifesting this time as excessive
individualism, materialism and short-termism) with the potential to lead these
elites into the graveyard of aristocracies. We explore these dysfunctionalities in
the final section of this chapter.
96 Vilfredo Pareto

Pareto’s vision of slow social, political and economic change, synchronised

by the class I and class II residues, thus provides us with a powerful technique
for thinking of risks according to their true natures, as possible future patterns of
cause and effect with no respect for the artificial boundaries drawn by academic
specialists between social, political and economic life. Anthony Giddens’ (1990)
has conceived of risk similarly in his famous references to the great ‘juggernaut’
of modernity which is forever either out-of-control or threatening to become
so. Giddens uses this metaphor to conceive of rapid change within the modern
world as something that may be steered to a limited extent but which is forever
threatening, just like Pareto’s river currents, to roll over us when we resist. Giddens
(1991) argues that no way of life can remain ontologically secure and insensitive
to the ‘generalised risk climate’ generated when modernity moves at speed. Our
failure to resist or steer the juggernaut, he argues, has much to do with high
levels of uncertainty within the expert knowledge that might allow sufficiently
scaled institutional steering. Powers’ development of Pareto’s sociology, we
suggest, provides a fresh slant on what gives Giddens’ juggernaut its unstoppable
momentum.
If we are to read Pareto as a theory of limited variability within human nature,
where sometimes the lion and sometimes the fox emerge as guides to decision-
making, then it makes sense to regard the crystallised and individualised
social forms as each having basic characteristics that are natural to the human
environment, and as each having spurred the development of human nature
over evolutionary time. Each can be read as corresponding to a particular kind
of riskscape, which has become familiar to us over evolutionary time, and for
which we are prepared as a species. Hence we might say that the individualised
social form emphasises risks associated with competitive powerplay between
many individuals whose interactions tend to be short lived and characterised by
the absence of clear guiding norms. Human nature mitigates these risks through
our hardwired capacity for ‘Machiavellian intelligence’ (e.g. Byrne and Whitten
1997). The crystallised social form, on the other hand, seems to emphasise risks
to social solidarity under conditions of material scarcity or crisis. Here the chief
risk is that resource conflict might return us to something like a brutal Hobbesian
state of nature. Evolutionary theories such as ‘genetic similarity theory’ (e.g.
Rushton 1997) suggest that human nature has evolved a mechanism whereby
exposure to such risks stimulates in-group altruism, as well as increases in
levels of prejudice and suspicion directed towards out-groups. In this chapter
we cannot sketch out basic features for these evolutionary riskscapes and the
hardwired responses they have produced in more detail. However we do suggest
that the potential for risks relating to periods of societal complexification, and to
periods of crisis and resource scarcity, to awaken relatively dormant aspects of
universal human nature formed by our evolutionary riskscapes, deserves much
further consideration.
 The Idea of a Sociology of Risk and Uncertainty 97

Uncertainty in the Mind

Here we suggest that Pareto’s theory of non-logical conduct can help sociologists
better understand the social and psychological processes through which we
experience and deal with uncertainty. And we further suggest that Pareto’s
sociological emphasis upon widespread human failure to meet his tough standard
of logical action can perhaps best be appreciated by sympathising with the
predicament of the decision-maker who must act where prospects for anticipating
risk are poor.
Pareto’s effort to build a unified social science is well known to have rested
upon an action theory which stressed the prevalence of non-logical conduct in
social, political and economic life. As Homans and Curtis (1970: 10) put it, ‘the
great importance of the Sociologie Generale is that it presents a well-developed
theory of the non-logical actions of men’. Pareto’s first effort to explain non-
logical action ran as follows: ‘logical’ actions (1) ‘use means appropriate to
ends’ and (2) ‘logically link means with ends’. These conditions must be satisfied
both by the person performing the act (i.e. from the internalist perspective), and
from the perspective of third party observers who possesses ‘more extensive
knowledge’ (i.e. from the externalist perspective) (Pareto 1935: §150). Non-
logical action then becomes a residual category comprising all action that does not
satisfy these requirements. This necessarily includes action undertaken without
full risk information that might confirm efficacy of means, as judged from both
internalist and externalist perspectives. The simple notion that inadequacy of risk
information precludes the effective linking of means and ends for instrumentally
rational action accords well with organisational understandings of risk which link
explicitly to organisational objectives. It is commonplace to define risks as threats
and opportunities that affect efforts to achieve organisational objectives (e.g. Ward
2005).
This renders Pareto’s sociological emphasis on the prevalence of non-
logical conduct quite uncontroversial. During the early twentieth century, many
interpreted his position as a misanthropic, counter-enlightenment and even proto-
fascist celebration of human irrationality (see Lyttleton 1973). Instead we suggest
it is best interpreted as an astute anticipation of the now universally appreciated
fact that we often have to take decisions under uncertainty with incomplete risk
information.
Yet Pareto’s theory of non-logical conduct is about more than this. It encourages
us to think much further about social action as a negotiation of uncertainty. In
fact, Pareto’s thought reveals instrumental rationality as itself providing us with
a comforting and illusory veneer of certainty over our selected actions, because
it asks us to question whether the objectives which we think we have chosen
for ourselves are appropriate. Pareto’s theory of non-logical conduct discusses
desires, beliefs about the world that have implications for proposed actions, and
actions themselves, as influencing each other over time, in an endless process
98 Vilfredo Pareto

of successive adjustments where we continually renegotiate what we think we

want, what we know to be true, and what we think we should do, against one
another. This idea is more famously summed up by Otto Neurath in his (1921)
non-foundationalist ‘boat metaphor’, which compares the ongoing process where
we review and improve our knowledge to the predicament of being aboard a boat
that must be repaired at sea. Any part, Neurath said, might be replaced, provided
we always retain adequate temporary foundations.
For Pareto, then, it seems we are all at sea in Neurath’s boat. The key
references for what Pareto says about this non-foundationalist process are in
sections §161–70 of the Treatise. Here we find Pareto’s triangular representation
of the relationship of ‘mutual dependence’ that connects sentiments (a) beliefs (b)
and actions (c). As Homans and Curtis (1934: 80) observed, “we never say that
any one of the elements is a cause of the others; all react on the others”. Action
is ‘logical’ within this context where it follows from a particular belief about the
world in conjunction with a particular sentiment, desire or psychic state (Pareto
felt he need not be precise about what (a) might comprise as he felt it either to be
beyond the reach of experimental science or at least best discussed by those with
a knowledge of psychology superior to his own). However, when we consider that
over time there is likely to be what we earlier called thoroughgoing uncertainty
around (a), (b) and (c), we can conceive of practical reasoning as the ongoing
non-foundationalist modification of each of the three in the light of the other two.
This will seek dissonance reduction and will doubtless be influenced by that quest
for mental economy and efficiency (or ‘holism’) which since Pareto wrote has
become a well known feature of general cognition. Furthermore, this exercise in
building holism will include effort to harmonise mind and society. It will occur
both individually and socially, psychologically and culturally, and, perhaps most
significantly of all, it will be characterised by slow transformations between the
two broad ‘ways of life’ that are Pareto’s class I and class II residues. It is only
at this point that the value of using Neurath’s boat metaphor to understand Pareto
becomes clear. Just as Neurath’s boat always retains its basic shape, so too the
Paretian refashioning of desire, belief and action takes place within the context
of highly permanent guiding assumptions associated with particular ways of
life (Pareto’s class I and class II residues). Seen in this light, Pareto’s class I and
class II residues each become broad metaheuristics which lead us to act with at
least some consistency, predictability and (personal and social) identity when we
confront uncertainty.
Pareto can also be read as offering a kind of ‘conspiracy theory of error’ which
views non-logical action as motivated. As Dahrendorf (1968) argued, uncertainty
might explain why we always remain ‘liable to err’; the conspiracy theory of error,
however, explains why we err as we do. Just as Dahrendorf maintained that we
often abandon truth as a guide to action because we fall under the influence of
‘evil spirits’ such as ‘neuroses, secret desires and biases’, Pareto of course viewed
non-logical conduct as motivated by the two animal spirits that together comprise
Machiavelli’s bestiary. Looking at these influences from the perspective of
 The Idea of a Sociology of Risk and Uncertainty 99

modern psychology, we have, in the case of Pareto’s lion, all the psychic motives
that might be attributed to conservative-authoritarian personality. In the case of
Pareto’s fox, we might consider many more motives associated with the dark triad
cluster of Machiavellianism, psychopathy and narcissism.

Conclusion: Uncertainty in the Modern World

The starting point for our chapter was the idea that our actual experience is often
one of uncertainty rather than risk. Whereas risk often remains remote from our
senses, or even unimaginable, until it is too late, our experience of uncertainty is
ubiquitous and quite unavoidable. We are often uncertain, not only about possible
threats and opportunities (risks), but much more fully, about the adaptivity of
our desires, beliefs and strategic preferences, in respect of one another, as we
encounter each changing situation. We looked at two particular personological and
cultural patterns which may have formed over evolutionary time to make us more
resilient within our risk environments by resolving our experiences of uncertainty
into fixed ways of seeing and interacting with the world:

1. the fox who may help us avoid the snares that we set for one another within
complex social environments, and
2. the lion who may help us fright away the wolves that grow ravenous during
times of crisis or resource scarcity.

We did not naively suggest that these patterns can adapt us perfectly or even
adequately to the risk environments that activate them from latency in human
nature. Rather, we set Pareto’s sociology within the tradition of Machiavellian
realism which cautions that to receive such guidance from personality and culture
is to become trapped within particular ways of seeing the world which lead us to
fall well short of the elusive ideal we called intense realism.
We also suggested that what Pareto called the tendency for the vulpine ‘class
I residues’ to intensify as societies become more prosperous and complex, might
be elaborated using the burgeoning literature on the rise of the ‘dark triad’ in the
modern world. In this last section we focus on the possibility that a psychological
and cultural transformation towards higher levels of sub-clinical Machiavellianism,
psychopathy and narcissism is indeed occurring. We speculate, following Pareto’s
lead, that this change may reflect how universal human nature has been primed
to render us more resilient to the risks of complex social environments. There
is nothing new about exploring trait Machiavellianism from an evolutionary
perspective, by considering the limited short-term adaptive value that interpersonal
manipulativeness may have in some social situations (Wilson et al. 1996). To
consider the dark triad as an adaptive reponse to the modern world is to float
an altogether more ambitious idea. Dark triad literature does now recognise that
this personality configuration appears over time and across cultures, and is highly
100 Vilfredo Pareto

adaptive in at least some common circumstances (Jonason et al. 2009). Hence

it is not unreasonable to anticipate the emergence of an evolutionary literature
which considers it, just like the Machiavellian-Paretian fox, as a sometimes latent,
sometimes active expression of universal human nature.
All we can attempt here is to very briefly sketch out what implications this
cultural and psychological transformation might hold for how we understand
political and economic elites. We remain close to Pareto’s concerns by considering
the possibility that the dark triad psychological and cultural pattern can be both
adaptive and maladaptive for elites. Our focus, at first, will be to consider how
this pattern engages in very selective and limited ways with its surrounding
risk environment. We will see that, just like Pareto’s fox, dark triad individuals
are myopically preoccupied with the present and near future, and so they pay
disproportionate attention to shorter term risks. We will try to explain this
phenomenon with reference to what is known about narcissists in particular. Then
finally we will look more holistically at how dark triad culture and personality
may supply metaheuristic guidance under uncertainty: what does the dark triad
lead us to desire? How does it lead us to see the world? How does it influence our
preferred strategies for interacting with the world? In these final pages we will try
to give more meaning to our earlier suggestion, based on our re-reading of Pareto’s
theory of non-logical conduct, that we experience thoroughgoing uncertainty
around desires (a), beliefs (b) and preferred strategies (c). In particular we will
consider what it means to continually strive to improve our adaptive fit to the
world by making successive adjustments to (a), (b) and (c) within the integrative
framework or ‘way of life’ suggested by Pareto‘s class I residues.

Myopic Risk-Taking

Let’s start, then, with the problem of myopia in decision-making. When discussing
economic elites within the Treatise, Pareto used the terms speculator and rentier to
describe capitalists strong in class I and class II residues respectively. The (class I)
speculators are ‘entrepreneurs’ whose ‘wide-awakeness in discovering sources of
gain’ allows them to drive forward economic expansion (Pareto 1935: §2233). The
(class II) rentiers ‘do not depend to any great extent upon ingenious combinations
that may be conceived by an active mind’. They would much rather allocate
capital to low risk, low return investments and might be described as ‘gentlemen’,
often living on fixed incomes. Rentier ‘thrift’ helps drive capital contraction as
societies fall towards austerity (Pareto 1935: §2228, §2234). Perhaps the closest
we get to Pareto’s thought on the economic significance of risk attitude is where
he less than generously describes the rentiers as ‘mere savers who are often quiet,
timorous souls sitting at all times with their ears cocked in apprehension, like
rabbits, hoping little and fearing much from any change’ (Pareto 1935: §2232).
The essential difference, then, is between the risk-taking spender who lives for the
day, and the risk-averse saver who hoards resources over the longer term.
 The Idea of a Sociology of Risk and Uncertainty 101

Were Pareto alive today, he might quickly argue that the ratio of speculators
to rentiers has increased decisively within economic elite mind and culture. He
may well view his class I residues as now providing psychological and cultural
lubrication for a dangerous increase in rates of capital reallocation, from low risk,
low gain enterprises, to high risk, high gain ones. This line of thought may well
lead Pareto to emphasise the destructive potential of modern derivatives markets
and ‘casino banking’ in particular. Today, few would take issue with his belief
that patterns of high risk capital allocation and capital exhaustion can precipitate
elite downfall. There is no need here to retell the story of the 2008–2011 global
financial crisis, which began with bad debts on US sub-prime loans and escalated
quickly into liquidity crises for global banks, and then into sovereign debt and
public spending crises for nation states. The ‘credit crunch’ teaches us that political
and economic elites ought to take Pareto’s link between increased financial risk-
taking and the exhaustion of socially available capital very seriously indeed. But
what of the cultural and psychological drivers for this crisis? Can we take Pareto’s
emphasis upon ‘the rise of the short-term speculator’ seriously, in our efforts to
understand and prevent a recurrence of the credit crunch?

The myopic risk-taker lacks generative historical consciousness  To understand

the myopic lack of consideration for the longer term which could be at issue
here, we take inspiration from the political psychologist David Winter’s recently
developed theory of ‘generative historical consciousness’ (Winter in Rhode (ed.)
2006) which offers a powerful theoretical perspective for differentiating between
long-termism and short-termism in the minds of decision-makers. Winter’s theory
differentiates between political leaders, yet it can apply to any type of leader
within any type of elite.
For Winter, generative historical consciousness is a desirable quality that
distinguishes democratic political leaders from tyrants. Those who possess it can
think long term. The tyrannical mind is often a narcissistic mind, and the absence
of generative historical consciousness within the mind of the narcissist explains
the myopic character of their thought. Winter defines historical consciousness as
‘the ability to view present actions and alternatives from the distant perspective of
history’. He considers this very different from consciousness which seeks to learn
from and apply ‘the lessons of history’ because that is past-facing and vulnerable
to erroneous assumptions that past regularities will persist into the future.
Historical consciousness is future-facing. It is capable of making better decisions
in the present because it views the present from the perspective of the anticipated
future, not just the near future, but specifically from the perspective of the distant
future when all of the ‘objectives’ we set for ourselves have long been erased
from memory, and perhaps when we, ourselves, no longer exist. One implication
of a distant future perspective, over a near future perspective, is that all the power
struggles, narcissistic conflicts and strivings towards financial gain, which might
motivate directors and managers within firms, or machine politicians operating in
dangerous and competitive environments, weigh less heavily on the mind.
102 Vilfredo Pareto

As Winter points out, there is however an important obstacle to the distant future
perspective: fear of death, the inability to come to terms with human mortality.
Those who regard the passing of time until death as ‘diminishing and threatening’
the self, may be disinclined to accept such a perspective. To the extent that they
perceive the passing of time as threatening, they may become (here we must
say, just like Pareto’s foxes and speculators) more materially acquisitive, more
anxiously concerned to act quickly to make their mark on an organisation, and as,
Winter observes in particular, ‘more likely to allow their power drives to break
through the constraints of love, reason and morality in a desperate determination
to strike sooner rather than later’. Such individuals might even embrace delusory
ideologies of inflated self importance, where they believe they must take urgent
and decisive action because those who follow them will either be less capable of
such action, or will lack necessary means or opportunity. Crucially then, Winter
views the distant future perspective as not just an ethical perspective, but as one
which ‘tames power’, making it a valuable complement to institutional checks and
balances.
Erik Erikson’s (1950) lifespan theory contributes the concept of ‘generativity’
to Winter’s theory. For Erikson, the human lifespan is characterised by eight
consecutive life stages. The seventh of these is particularly relevant for decision-
makers within the higher echelons of political and economic elites because it relates
to the stage of ‘middle adulthood’ where professional identity has been obtained
and career pinnacles have been reached. Erikson characterised this life stage as
one of psychic conflict where the individual seeks to establish a ‘favourable ratio’
between conflicting tendencies towards ‘generativity’ and ‘stagnation’. Erikson’s
‘generativity’ involved productive activity; he analysed feelings of stagnation as
narcissistic self absorption (Hoare 2002). Generative productivity means acting
for the good of future generations, which Erikson regarded as motivated by the
psychosocial strength of intergenerational care (see Peterson 2002). As Winter
observes, ‘affection, mutuality, and concern for others would seem to be natural
breaks on the excesses of power’.
Hence the new theory of generative historical consciousness centralises
a particular psychosocial conflict which is forever threatening to reduce our
clearsightedness as decision-makers, where we may fall from the socially benign
state of intergenerational care into the narcissistic pattern that Erikson called
‘stagnation’ and which also corresponds neatly to the materialistic excesses of
Pareto’s foxes and speculators. Winter’s theory can easily be read as finding within
narcissistic personality and culture, preoccupations with risks over the short term
(rather than over the longer term) and with risks to the self (rather than to others).
We see, as denominators for these preoccupations, the very personal narcissistic
themes of fear of ageing, and fear of power wielded by others.

Dark Triad desires, beliefs and strategic preferences: A modern way of life? 
Getting further under the skin of the narcissist can lead us to better appreciate
how dark triad individuals will think within those shrunken temporal frames that
 The Idea of a Sociology of Risk and Uncertainty 103

restrict their attention to the present and near future. In the remaining pages of this
chapter we will ask: What do dark triad individuals desire? How do they see the
world? What are their strategic preferences for achieving their objectives? This
exercise will allow us to build a case to suggest that the dark triad can indeed
be regarded as a broad ‘way of life’ that gives metaheuristic guidance to elite
decision-makers under uncertainty.
As we have seen, fear of power wielded by others is paramount within the
narcissist’s short-term riskscape. Hence their Hobbesian struggle for power and
dominance over others (Foster et al. 2006). Narcissism is also famously associated
with a strong sense of entitlement (Jonason et al. 2009). Twenge and Campbell
(2009) go as far as draw attention to the modern ‘narcissism epidemic’ which
they claim has transformed modern culture. We now live in what they call an
‘age of entitlement’ which centres upon materialistic and often unreasonable
demands made by entitlement thinkers who quickly become aggressive when their
preferences go unmet or their opinions go unheeded. Dark triad preoccupations
with prestige and status are tightly bound to this sense of entitlement. In fact,
narcissistic expressions of entitlement seem to make sense, not just as assertions
of power, as contestations of power, or as rage vented in the absence of power, but
more fundamentally as pleas for recognition and validation of personal and social
identity.
Psychometric items from Raskin and Hall’s (1981) Narcissistic Personality
Inventory (now incorporated within Jonason and Webster’s (2010) Dark Triad
measure) illustrate this well. These suggest narcissists ‘want others to admire
them’, they ‘want others to pay attention to them’, and they ‘expect special favours
from others’. They also ‘tend to feel that things are owed to them’. It therefore
seems to follow that in a dark triad culture, desire will be characterised by an
excess of three irreducible dimensions: power, entitlement and prestige.
Dark triad ‘belief’ is characterised by a view of the social world as a
hostile, intensely competitive place which does not yield easily to dark triad
desires. Indeed, Christie and Geis’ (1970) ground-breaking correlational
studies on Machiavellianism lead us to suppose that dark triad individuals, just
like authoritarians, view the social world ‘as a jungle’. As one of Jonason and
Webster’s 12 dark triad items shows, such individuals also believe that ‘they are
better than others’. Combining these two strands of dark triad belief, we can say
that such individuals feel they are, or at least should be, the dominant predators
in the social jungle, at which point we begin to appreciate that this pre-eminently
‘vulpine’ personality pattern possesses what might be regarded as a very ‘leonine’
worldview.
One simple manifestation of this ‘king of the jungle’ belief system is where
it operates in interpersonal situations to inflate confidence in the likely efficacy
of short-term manipulative strategy (Jonason et al. 2010). However there are
also more complex manifestations, perhaps best characterised as strategic hubris
or obstinacy, that appear within what dark triad individuals will perceive as the
savage ‘organisational jungle’. In order to understand narcissistic overconfidence
104 Vilfredo Pareto

towards organisational strategy, we need to appreciate Alfred Adler’s famous

point that feelings of superiority usually stem from underlying feelings of
inferiority and vulnerability. Narcissistic leaders illustrate this well, because they
are perhaps most likely to display strategic overconfidence where their hallmark
fear of power wielded by others has motivated them to shield their beliefs within
protective organisational cocoons. Whereas fully rational leaders ought to value
any information or opinion which can alert them to risks related to their decisions,
narcissistic leaders will instead suppress information flows from sources perceived
to threaten their jealously guarded power, status and prestige. Not only that, they
may seek to consolidate their authority by fostering a worshipping consensus
around their leadership decisions. Hence they easily become ‘naked emperors’
starved of good counsel. Feedback received may err towards an adoring El
Dorado optimism quite incapable of providing the painful reality checks that are
actually required. As literature on the ‘self-inflated corporation’ (Pauchant and
Mitroff 1988) argues, this pattern of psychic vulnerability, masked by strategic
overconfidence and armoured against critical feedback, is the hallmark of the
‘crisis-prone’ organisation which fails to anticipate risk until too late. This branch
of narcissism literature seems to go a long way to explaining how ‘vulpine elites’
can maladapt and degenerate over time.
Finally, then, we consider how these dark triad desires and beliefs intersect
with dark triad strategic preferences to form an irreducible whole that can be
considered – just like Pareto’s class I residues – as a broad way of life that can
guide us through complex, fast-paced and highly individualised environments.
Most of the dark triad literature focuses on manipulative strategy, which might be
summed up as a ‘hit-and-run‘ approach to engaging with others that works best
where interpersonal ties are fluid and fleeting. The ‘Machiavellian tactics’ items
that emerged from work undertaken by Christie and Geis (1970) to produce the
first Machiavellianism scales, and which are now incorporated in Jonason and
Webster’s measure of dark triad personality, include the following: ‘I have used
deceit or lied to get my way’, ‘I tend to manipulate others to get my way’, ‘I have
used flattery to get my way’, and ‘I tend to exploit others towards my own end’.
Examples of dark triad ‘hit-and-run’ strategies that have been researched
recently include short-term exploitative mating strategies (Jonason et al. 2009)
and student plagiarism (Williams et al. 2010). Whereas the former simply involves
treating others as having instrumental value within a short run game, the latter is
a more perplexing and interesting phenomenon. Students who plagiarise are often
repeatedly forewarned that they will be caught by plagiarism detection software,
yet such is their apparent disregard for their medium and longer term interests
that they plagiarise anyway. As this plagiarism research highlights, dark triad
individuals can make very poor intertemporal trade-offs.
But how might dark triad manipulative strategy manifest itself for decision-
makers in political and economic elites? In very rare cases, senior politicians might
actually be called to account for student plagiarism, as occurred in early 2011
when the German Defence Minister, Karl-Theodor zu Guttenberg, was stripped
 The Idea of a Sociology of Risk and Uncertainty 105

of his doctorate by Bayreuth University. Of course, most senior politicians and

business executives who have managed to survive and advance their careers will
have a track record of avoiding reputational blunders suggestive of dark triad
personality. So how will the dark triad reveal itself when so much political skill
and business acumen lies in either concealing it or avoiding all public perception of
it? Pareto could answer this question very easily by pointing to the Italian systems
of trasformismo and clientelismo that saw Italy’s elites become embroiled in ever
more expensive and favouritist patron-client networks. He viewed his ‘foxes’ as
thriving within such networks by avoiding the ‘snares’ that personal loyalties and
ideological commitments become when their utilities cease. Of course, these same
aptitudes may serve modern politicians and business executives well. Babiak and
Hare (2006) suggest that following the organisation wars of the 1970s and 1980s,
which brought debureaucratisation and politicisation of power within many large
organisations around the globe, individuals capable of continually making and
breaking commitments began to flourish as never before.
Yet much more remains to be said about the subtle strategies which Pareto’s
‘foxes’ and ‘speculators’ might use today. Below we identify just some of these.
Our method is simply to consider how dark triad cultural and psychological
patterns might explain some modern elite strategies which have so far not been
analysed from a dark triad perspective. It suits our purpose to place narcissistic
grandiosity at the heart of the dark triad pattern. The term grandiosity is often
used to denote those public displays of superiority through which narcissists seek
recognition and prestige (Raskin and Terry 1988). Amernic and Craig (2010) show
how narcissistic grandiosity can influence elite strategy. They suggest that in the
corporate world, narcissistic CEOs ‘project themselves as the corporations they
lead’. The strategies they follow, to protect and advance their positions within
systems of corporate governance, revolve around their use of a ‘discourse cycle’.
First, they create a narrative, which is set within financial accounting language and
based on selective use of financial indicators. Then, they use this narrative, both to
win over investors and other stakeholders, and to express CEO ego. Just as every
narcissist is desperate for validation, so too the narcissistic CEO will ‘reflect’ on
how they and their corporation’s performance are perceived. This will in turn lead
to further adjustments, both to how CEOs perceive themselves, and to strategic
discourse.
This reveals an odd and yet perhaps quite common phenomenon which cannot
be healthy for the strategic thinker who seeks objectivity: the conflation of strategic
planning and identity work. The notion that leadership strategy can itself be a
mechanism through which narcissistic self presentation is offered and validating
feedback is sought, requires some further illustration from the worlds of business and
politics. Firstly, consider that this might help explain growing interest in reputation
management. It is common to argue that to have a good corporate reputation is to
seem familiar to, predictable to, and favoured by, corporate stakeholders (Lange et
al. 2011). And it is commonly reckoned that the CEO ‘owns’ corporate reputation
(EIU 2005). Inevitably, then, the narcissistic CEO may be very tempted to view
106 Vilfredo Pareto

reputation management as an opportunity for narcissistic grandiosity. Stewart

(2006) cautions against such interventions. He views reputation as a property of
the corporation that exists irrespective of stakeholder perception. In other words,
it is an accumulation of all that the corporation does over time (just as Aristotle
argued in The Poetics that character is formed by actions taken over time). Stewart
suggests that to cultivate reputation ‘directly’ through public relations machinations
is to confuse reputation with image. Genuine reputation management requires a
farsighted approach to the overhaul and improvement of policy (accompanied by
the cultivation of transparency) that is frequently absent in the corporate world.
The short term image manipulation that so often stands in its place, Stewart points
out, can cause great harm to reputation over the longer term, because potential for
embarrassing discrepancies between appearance and reality will always increase
with the extent to which image manipulators fail to harmonise short and long term
considerations. This begs the question: might growing organisational concern
with image management be attributable, in part at least, to the culture shift which
we have discussed in this chapter? Perhaps many of today’s owners of corporate
reputation are becoming, like the mythical Narcissus, obsessed by image, in which
case we can expect increasing corporate conflation of image and reputation, and
increasing corporate will to manage reputation ‘directly’.
Such practice enriches our understanding of what the Machiavellian-Paretian
idea of vulpine ‘fraud’ can translate into, within today’s ‘dark triad’ culture, for any
type of elite. Here is one final example of how narcissistic grandiosity can manifest
itself, this time as a political control strategy. Soon after Silvio Berlusconi rose to
power in Italy in 1994, the label ‘videocracy’ arose to describe the strategy he has
followed in his effort to overcome the problem of weak and short-lived minority
rule that has plagued successive Italian governments (Mazzoleni 1995; Miller
2003). In Berlusconi’s videocracy, political power is fortified through ownership
and control of broadcast media, which allows the leader’s own tastes and appetites
to be projected onto the television programmes that shape the ego-ideals of Italian
youth. Young women are encouraged to become the singing and dancing ‘Veline’
girls who are selected through regional televised competitions, to appear on game
shows and news programmes. All are encouraged to aspire to the lifestyle that
Berlusconi himself leads, in the parties which he hosts for visiting celebrities and
foreign dignitaries at the ‘Billionaires Clubs’ in Monte Carlo and on Sardinia’s
Emerald Coast. Arguably, this is the narcissistic political control strategy par
excellence, because leader and follower narcissisms mirror one another perfectly.
Each is transfixed by the reflection the other provides.
Importantly, videocracy counts as a political control strategy in the Paretian
sense. It is perhaps not a consciously deployed strategy of the sort that might be
developed in meetings held between Berlusconi and his advisors and confidants;
rather it has the character of something visceral or instinctual that:

1. emanates from the leader’s personality,

2. places a temporary stamp upon political culture, and
 The Idea of a Sociology of Risk and Uncertainty 107

3. finds legitimacy by resonating with a much broader way of life that touches
social, political and economic realms.

Rather than corresponding to any particular strategy, it supplies a ‘common sense’

and for the most part ‘silent’ understanding about the sorts of measures that have to
be taken to maintain power. And more importantly, what really makes it Paretian is
that it represents a relatively narrow and inflexible way of thinking about strategy
that can lead an elite to its downfall. In this chapter we have tried to develop
Pareto’s thought by suggesting that elite decision-makers, such as Berlusconi,
cling to rigid ways of thinking because they have internalised and normalised them
along with the broader taken-for-granted ways of life within which they integrate.
In order to develop Pareto’s conception of the ‘fox’ as an individual immersed in
a way of life denoted awkwardly by the ‘class I residues’, we have suggested that
dark triad culture, which weaves dark triad desires, beliefs and strategies together
into a seamless whole, represents a potent common sense which can lead decision-
makers to fall well short of the mental flexibility we called ‘intense realism’.
Whilst not wishing to dogmatise that Berlusconi’s videocracy is best analysed
as having arisen within a dark triad cultural context, it is nonetheless worth
considering that it seems to be deeply emdedded within a common sense which
has strong narcissistic themes. The problem with Berlusconi’s videocracy, of
course, was that it depended upon the vulnerabilities of one man’s image. Would
Berlusconi have contemplated having it any other way? Did his animal spirit
compromise his intense realism? As socialist parliamentarian Bettino Craxi
famously said of Giulio Andreotti, but which might equally have been levelled
against Berlusconi, ‘sooner or later all foxes end up as fur coats’.

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 Chapter 6
Pareto’s Theory of Elite Cycles:
A Reconsideration and Application
John Higley and Jan Pakulski

In November 2008 American voters elected a new president, Barack Obama,

and gave Democrats strong majorities in both houses of Congress. In May 2010
British voters ended a long period of Labour government, but declined to give
Conservatives a parliamentary majority, so a novel Conservative-Liberal Democrat
coalition government emerged in the hung parliament. Voters in both countries
were reacting to a shattering economic crisis defined by the biggest declines in
consumption and investment since the Great Depression. At the start of 2011, 16
million Americans were unemployed, 8.5 million jobs had been lost, federal and
state governments faced huge budget deficits, and a fifth of all Congress members
had been replaced two months earlier. Furious fiscal and monetary pump-priming
plus massive bailouts of banks, insurance, investment, automobile and many other
firms had averted a meltdown of the economy and instigated a return to modest
growth. But with the federal government budget deficit at nearly 10 per cent of
GDP, three million homes likely to be foreclosed during the next several years, and
with pension and health insurance programs facing eventual insolvency, the longer
outlook was grim. In Britain the government budget deficit was 8 per cent of GDP,
the official unemployment rate was also 8 per cent, a third of MPs had been swept
away in the May 2010 election, drastic austerity measures were beginning to bite,
student and other protests mounted, and dissension among Liberal Democrats
made the coalition government’s survival uncertain. Elsewhere in Europe, half
a dozen countries teetered on debt default, maintenance of the euro-zone was in
doubt, and it was feared that the European Union could eventually unravel. Nearly
everywhere, in short, the new decade was regarded with trepidation.
It is hard to avoid concluding that an historic failure of governing elites
occurred. After about 1980, political, economic and other key elites lived
increasingly in a cloud cuckoo land where imbalanced flows of capital need not
be checked, government and consumer debt can pile up indefinitely, saving for
rainy days is foolish, and economic growth pays for huge but unfunded military
undertakings and welfare extensions. Instead of politically unpalatable measures
such as raising taxes, hiking interest rates and clamping down on government
spending, elites clung to fashionable beliefs about monetary policy’s curative
powers, automatic market equilibrations, banks and investment firms too big to
fail, a common European currency without political integration and much else.
112 Vilfredo Pareto

Viewed in retrospect, the absence of prudent leadership was stunning. Yet political
leaders who deceived both themselves and voters were elected and re-elected.
The question is why this apparent failure of elites happened. Vilfredo Pareto’s
theory of elite cycles frames a sobering answer. He theorized that over time a
distinct psychosocial propensity – manifested by personality traits, mentalities,
beliefs and actions – becomes predominant in governing elites. This renders them,
especially their leaders, prone to bias, closure, rigidity and cumulating blunders. A
gradual process of decline – degeneration is a more pointed term –takes hold and
leads eventually to a profound crisis during which groups and persons disposed
toward the opposite propensity ascend, only to have a lengthy process of decline
or degeneration begin anew. Intuitively, Pareto’s theory appears to fit many of
the past century’s most important political trends and upheavals, not least the
extended series of elite actions and inactions preceding the crisis that took hold in
2008. But the breadth and elasticity of Pareto’s theory, his fragmented exposition
and many ceteris paribus clauses – not to mention the empirically elusive qualities
of elites – risk facile and tendentious applications.
Pareto’s theory is hardly unique in these respects, of course. Karl Marx produced
a notoriously vague theory that has been applied indiscriminately to anything
and everything. Max Weber’s theory of charismatic leaders and ruling minorities
as drivers of social change has always been difficult to apply. Perhaps we must
accept that all large-scale theoretical constructs, all general explanatory visions,
defy rigorous application. They are attractive and inspiring precisely because of
their generality and sweep and must be assessed in terms of internal consistency
and overall plausibility. Judged in this way, Pareto’s theory fares well; arguably,
it is more cogent and realistic than competing theories of similar scope. However,
compared with the attention showered on the theories of Marx and Weber, or on
Schumpeter’s competitive theory of democracy (‘democratic elitism’), Pareto’s
theory has received short shrift . While there is loose familiarity with it, the theory
has seldom been applied to contemporary events and processes (see Finer 1966,
1968; Femia 2001, 2006; Marshall 2007; Best and Higley 2010). This chapter
reconsiders Pareto’s theory of elite cycles and explores its application to Western
elites during the hundred years since he wrote, paying particular attention to
American and British elites prior to the onset of crisis in 2008.

Pareto’s Governing Elites

In his million-word Treatise on General Sociology, composed between 1907–1911

but published in 1916 and translated into English as The Mind and Society in
1935, Pareto examined many societies, political regimes, and alternating eras of
faith and scepticism in Western history. He sought to illustrate an intricate theory
about humanity’s several and conflicting non-logical propensities (‘residues’), the
rationalizations, superstitions, and ideologies derived from them (‘derivations’),
 Pareto’s Theory of Elite Cycles 113

and how changing combinations of propensities and derived beliefs, together with
concrete economic interests, shape the era-like fortunes of societies.
Pareto’s starting point was deceptively simple. He portrayed all societies as
containing two analytic and interacting categories: largely powerless masses and
powerful elites, with the latter sub-divided into ‘governing’ and ‘non-governing’
elites. Historically, governing elites were hereditary aristocracies anchored in the
most gifted and talented – the qualitatively superior élite of a society – and in
socially delineated monopolies of power and privilege (1916/1935, paras. 2051–
53; Lenski 1966: pp. 219–42). In modern societies, however, intensified elite
circulation and electoral democracy undermine hereditary aristocracies. Modern
governing elites, though still socially selective in composition, contain persons
and groups recruited from a variety of classes and strata, with privileged bourgeois
origins being most prominent. But for Pareto, the class and status underpinnings
of governing elites are less important than their psychosocial profiles, that is, key
personality traits and proclivities that shape dominant styles of governance and
interest alliances. Pareto stressed that economic interests are always important
determinants of elite preferences and actions, but he postulated that powerful non-
logical biases, passions, values and the ways in which they are justified are in the
long run more decisive.
Three aspects of Pareto’s governing elites stand out. First, he conceived of them
– he often spoke of ‘governing classes’ – as complex aggregations of powerful
political, economic and social groups, the inner leaderships of which are located
in governments. In Pareto’s usage, governing elites encompass opposing parties
and allies rotating in and out of government offices and squabbling endlessly over
policy matters. But these rotations and squabbles do not alter basic psychosocial
propensities and governing styles. Elite members are disposed to combine the two
modes of political rule, force and persuasion, but over time they, and especially
their leaders, come to rely primarily on one mode, one style of governance (Femia
2006: p. 70). They constitute intertwined and polyarchal webs of patrons with
diverse clienteles, but there is always a ‘common accord’ resulting from ‘an
infinitude of minor acts, each determined by present advantage’ (1916/1935,
para. 2254). In Pareto’s treatment, governing elites are in no sense monolithic;
their unity is manifested at a meta-political level – in shared outlooks and tacit
consensus about boundaries of political patronage and a style of governance
(1916/1935, paras. 2257–8). The major difference between Pareto’s governing
elites, Marx’s ruling classes and Weber’s dominant status groups is that for Pareto
shared elite outlooks and tacit consensus encompass not only a dominant class
interest and a legitimation formula, but also and most importantly a basic set of
non-logical (‘residual’) propensities that shape the balance or imbalance between
force and persuasion.
Second, Pareto agreed with most of his contemporaries, such as Weber,
Michels and Mosca, that government executives in modern bureaucratic states
acquire overarching control of national policies. Accordingly, a modern governing
elite’s inner leadership is pivotal, often displaying a sufficient commonality of
114 Vilfredo Pareto

purpose to be treated analytically as a social actor, though Pareto always stressed

the broader governing elite’s importance. For him, as for Weber, political and
social change is mainly top-down, but Pareto located its causalities in a governing
elite’s psychosocial complexion, which, he held, alters in step with changing
rates of circulation between the elite and the masses. This gave his theory a more
systemic character than Weber’s leader-centered theory. Pareto’s conception of
governing elites also differed from Marx’s thesis that in capitalist societies state
executives are mere management committees of ruling bourgeois classes and
their main interests. Pareto agreed that state power lies in the hands of bourgeois
(‘plutocratic’) interests, but, like Weber, he held that the leaders of governing
elites enjoy considerable autonomy vis-à-vis bourgeois interests and can, in fact,
‘despoil’ those interests by wasting their wealth. The inner cores of governing elite
leaders favour only some economic interests, only some holders and producers of
wealth, and this selective patronage tends to squander economic resources and
weaken economies.
Third, Pareto famously theorized that governing elites can be distinguished
most fundamentally according to which of two non-logical propensities
predominates: a ‘Class I’ propensity to combine things in innovative ways,
which renders governing elites fox-like in actions; a ‘Class II’ propensity to keep
or restore things to traditional forms and ways, which produces lion-like actions.
Vulpine governing elites act in cunning, inventive, innovative and manipulative
ways; leonine elites act with idealism, intolerance and a strong preference for
applying force to achieve and cement social unity (Femia 2006: p. 105). Cutting
across the customary right/left spectrum – Pareto portrayed revolutionaries as
exemplifying the Class II propensity, for example – this ‘inspired guess’ has been
regarded as lacking empirical support (Finer 1966: p. 84). However, research
in modern political psychology, ably synthesized by Alasdair Marshall (2007),
makes Pareto’s distinction more credible empirically. For research identifies
among powerful political actors a cluster of personality traits consisting of
hedonistic, irreligious, tolerant and risk-taking proclivities that approximate
the propensity Pareto assigned to fox-like elites, and an opposite cluster of
conservative risk-aversion, group loyalty, paranoia, anti-intraception (or anti-
introspection) and obsessive prejudice approximating the propensity he assigned
to lion-like elites.
In sum, governing elites embody wide and complex patronage networks and
practices, as well as a psychosocial propensity and consequent style of governance
tending to rely on cunning and persuasion or determination and force. Governing
elites seldom achieve a high degree of integration and are rarely if ever cabals; they
are instead broad condominiums of groups and circles that are normally capable of
defending their advantaged positions and pursuing mutually beneficial courses of
action. More concretely, governing elites are congeries of political party leaders
competing for government offices, groups promoting specific economic interests,
factions trumpeting various ideologies, as well as groups of ethno-religious,
 Pareto’s Theory of Elite Cycles 115

military, regional and other important leaders. Pareto viewed these kaleidoscopic
formations as normal and he portrayed the incessant pushing and shoving within
them as routine politics. But the overall patterns reflect predominant psychosocial
propensities to rely primarily on force or persuasion. Consequently, basic elite
transformations occur only when a governing elite disposed toward the alternative
propensity takes power. Why do these transformations occur and what forms do
they take?

Pareto’s Elite Cycles

Pareto’s discussion of elite cycles, scattered across 300 pages in Chapter XII of the
Treatise, can be distilled into five principal claims:

• While routine elite circulation – movements of persons from non-elite

to elite positions and vice versa – is constant and produces gradual elite
change, the inflow of talented persons with a different psychosocial profile
varies in a broad cyclical manner as a consequence of gradual elite closure
and degeneration followed eventually by intensified elite replacement and
renewal.
• The closure and degeneration that occur in broad cycles subsume cultural,
economic, and political sub-cycles that accelerate broad cycles when they
coincide and retard them when they cross cut.
• Each broad cycle is distinguished mainly by a governing elite’s predominant
non-logical propensity – especially but not exclusively its mix of Class I
and Class II propensities – and by economic alliances within the elite.
• The end of a broad cycle and start of a new one may be sudden or gradual,
but it is usually marked by a profound crisis that is contingent in details, yet
path dependent in the sense that some ‘general regularities’ are discernible.
• In the course of each broad cycle there are periods of elite renewal and
periods of deterioration, but degeneration eventually becomes pronounced
and signals a profound crisis that terminates the cycle.

The duration of elite cycles is unclear in Pareto’s exposition. Sometimes he

portrayed them as eras of faith or scepticism extending across centuries – the
Roman Republic, the Empire’s gradual decline, the Renaissance, the Protestant
Reformation – and sometimes as briefer alternations in forms of governance
during a generation or two. In fact, Pareto seemed to have two kinds of elite cycles
in mind:

1. long cycles involving enduring configurations and dispositions of elites,

both governing and non-governing, accompanied by slow-moving mass
currents prevailingly religious-ideological or secular-rationalist in thrust;
116 Vilfredo Pareto

2. short cycles book-ended by crises that materially alter governing elite

composition and political regime type, such as shifts from ‘demagogic’
to ‘military’ plutocracies and back again (Pareto 1921: pp. 55–62; Powers
1984: pp. 18–21).

Long cycles begin and end with definitive collapses of governing elites and much
of the socioeconomic and sociopolitical orders they have overseen. But long
cycles encompass shorter cycles during which the stability and effectiveness of
governing elites weaken but are renewed by adjustments made during periodic
crises that stem from this weakening. To illustrate, the Bolshevik revolution in
Russia marked the start of a long cycle that ended with the downfall of the entire
Soviet edifice in 1989–1991. De-Stalinization of the Soviet elite and regime during
the mid-1950s marked the end of a short cycle (1927–1956) with the elite making
adjustments that enabled it to persist for another three decades.
The end of a long cycle is the result of a governing elite’s gradual but inexorable
degeneration and the dire situation it eventually creates. Degeneration occurs in
three principal and interrelated ways. First, routine circulation slows so that a
governing elite becomes increasingly closed, with able persons who do not fit the
elite’s preferred psychosocial and stylistic profile more and more excluded from
its ranks. This not only unbalances the elite’s composition and denudes the elite of
talent, it breeds frustration among aspirants, who, on finding their careers blocked,
foment mass opposition (1916/1935, para. 2057). Second, a governing elite’s
intellectual and political qualities deteriorate, with key positions held increasingly
by mediocrities who have risen to power through family inheritance, cronyism,
and sycophancy, and who lack the vigour and wisdom necessary for decisive and
effective actions (see the chapter by Nielsen in this volume). Elite members who
promise such actions are shunted aside because they threaten to upset mutual
back-scratching practices (1916/1935, para. 2054). Third, a governing elite
becomes increasingly biased, doctrinaire and inflexible, less and less able to adjust
its policy repertoire to fit changing circumstances. Where new circumstances call
for policies more persuasive or forceful, more cunning or coercive, the elite –
especially its inner leadership core – sticks to templates and bromides its members
regard as true (1916/1935, para. 2178). As a consequence of all three processes,
blunders and miscalculations multiply (1916/1935, para. 2365).
More concretely, when the leonine propensity to pursue traditional panaceas
predominates, conservative, nationalistic and religious shibboleths bias policies.
The elite’s leaders invoke some ‘natural’ order of things – God’s will, a free
market’s invisible hand, animal instincts, an indomitable national character or
mission – to rationalise inadequately funded domestic measures and costly military
adventures. Growing indebtedness weakens the economy and eventually produces
a severe crisis. When the vulpine propensity to rely on opportunistic compromises,
crafty deals, demagogy and deceptive manoeuvres predominates, leaders invoke
ostensibly rational solutions to conflicts and pursuits of social justice to rationalise
 Pareto’s Theory of Elite Cycles 117

costly payoffs that fuel fiscal insolvency, erode the elite’s authority and foster
social decay, also eventually producing a crisis (Femia 2006: pp. 71–2).
Thus, governing elites of both types degenerate and ultimately fail, though
they do so in somewhat different ways. The degeneration of a predominantly
leonine elite typically involves enervating military over-extensions, quagmires
and setbacks; that of a predominantly vulpine elite typically involves enervating
gridlocks and dissipations of authority that stem from trying to placate myriad
patrons and clienteles. Either degenerative process culminates in a crisis that
triggers wide elite circulation and an influx of groups and persons inclined toward
the alternative propensity. This circulation may take sudden and violent forms,
as in revolutions or military coups, or it may involve discredited leaders being
shouldered aside by those better able to deal with the crisis at hand. In the latter
case, groups and persons formerly excluded from leading positions assail the
existing modus operandi, out-manoeuvre current leaders and take charge. The
exact mode of a wide circulation depends on contingencies such as the extent
of elite degeneration, the relative severity of the crisis to which it has led, or a
conjunction of military failure and fiscal insolvency.
Pareto spurned any idea that a lasting elite equilibrium – an efficacious
balancing of persuasion and force – is possible. Cycles of elite circulation and
degeneration can never be eliminated. He observed, however, that the start of a
cycle may provide a temporary respite – an interval of renewal and hope – because
the influx of new elite groups and leaders supplies needed flexibility, innovation,
talent, and vigour. A measure of temporary equilibrium is achieved, and a
honeymoon period for the new elite unfolds. But this is bound to be short-lived,
because the new elite tends to attribute its predecessor’s downfall to specific errors
and stylistic shortcomings, rather than to more general bias and closure, political
mediocrities in high positions and inflexible policies. The lesson learned is less the
need for elite openness and a ruthlessly honest internal discourse than for a more
conciliatory or confrontational posture. Sooner than later, complacency and hubris
again take hold, policies become rigid and doctrinaire, vices replace virtues and
ill-advised undertakings mount.
It is important to bear in mind that Pareto’s theory of elite circulation and
degeneration was but a component of his more general theoretical vision, in
which he conceived of societies as moving constantly toward or away from the
equilibrium of non-logical propensities and clashing economic interests. No
society attains full and lasting equilibrium; it can at most be partial and temporary,
because circumstances change constantly, and imbalances of propensities and
interests cannot be prevented. When these imbalances become great, major
upheavals occur and reduce them, so a condition closer to equilibrium obtains
for a time. But inevitably, imbalances again become aggravated and the process
is repeated. Imbalances in the propensities and interests of governing elites are
political manifestations of this wider flux in societies. Treating Pareto’s elite
theory in isolation from his general theory makes the former seem more simplistic
118 Vilfredo Pareto

than it actually is (for discussions of the general theory, see, inter alia, Finer 1966;
Aron 1967; Lopreato 1980; Powers 1987; Femia 2006; Marshall 2007).

Applying Pareto’s Theory

Pareto was fully aware that the contours and actions of governing elites differ
greatly between societies and eras and in its details history never repeats itself
(1916/1935, para. 2410). But he believed that uniformities and tendencies,
regularities and patterns, albeit always in a thicket of seemingly chaotic events,
are discernible across history’s vagaries. As a strong advocate of positivist social
science, Pareto understood that non-logical propensities are theoretical constructs
difficult if not impossible to observe directly, let alone measure precisely (Femia
2006: p. 75); only the professed beliefs, policies and actions derived from them
are readily observable. But he also knew that the test of a social science theory
is whether it accounts for large economic-political changes more cogently than
competing theories. Flatly contradicting Marx, Pareto contended that history is
not a dialectical story of class struggles ending in classless socialism, but rather of
imbalances in the psychosocial propensities of elites and masses and the endless
rise and fall of governing elites.
It is self-evident that applying Pareto’s theory is a challenging task. It requires,
inter alia, data on elites’ personality traits, long-term circulation trends toward
closure or openness, the flexibility or rigidity of policies, convergent or divergent
outlooks and integrative or disparate formal and informal networks. Such data
exist piecemeal for governing elites in various modern Western countries, though
their collection has not been guided by Pareto’s theory (e.g. Higley and Moore
1980; Higley et al. 1991; Cotta and Best 2000; Best 2011). Marshalling and
reinterpreting such piecemeal data for indications of Pareto’s long and short cycles
are beyond what is possible here. We can assess only prima facie correspondences
between his theory and major twentieth-century developments, especially those in
Britain and the United States.
We begin with a brief overview of developments during the years surrounding
Pareto’s death in August 1923. Although he was prepared just to identify leaders
of Italy’s surging fascist movement with his leonine elite type, some of his
interpreters, including Mussolini himself, misread this as political support. Pareto
was thus said to have forecast the displacement of Italy’s vulpine demagogic
plutocratic elite by Mussolini’s leonine fascists. Pareto died three months before
Hitler’s failed putsch in Munich, and he did not discuss the fledgling Weimar elite,
which succumbed to the Nazis ten years later. In any event, military and quasi-
fascist elites took or closely approached governing power in numerous European
and Latin American countries, as well as Japan, during the interwar period, and in
Russia the post-revolutionary Bolshevik-Stalinist elite consolidated power brutally
and swiftly. Viewed through Pareto’s lens, these dramatic changes resulted from
gradual degenerations of elites that had long been ascendant before World War I,
 Pareto’s Theory of Elite Cycles 119

but which fell prey to enervating pre-war gridlocks – labeled ‘Bonapartist’ by

Lenin, Trotsky and others who hoped to capitalize on them – and could not survive
the crises constituted by the war and its immediate aftermaths. Elites that grabbed
and consolidated power during and after those crises – most notably the Italian
Fascist and German Nazi elites – displayed clear leonine propensities in doctrinal
certitude, aggressive and racist nationalism and ruthless use of force. They were
born of crisis and violence, and their subsequent trajectories and downfalls accorded
with Pareto’s thesis about the doctrinal extremism and military cum economic over-
extensions to which leonine elites are prone.1
Fascist movements in the Anglo-American, Dutch and Scandinavian countries
were kept at bay during the interwar period. In those countries the most striking
illustrations of Pareto’s theory were elite failures to prevent the Great Depression
and World War II. During the ‘Proud Tower’ of the Edwardian age in Britain
(Tuchman 1966) and prospering conditions in the other English-speaking, Dutch
and Scandinavian countries before World War I, governing elites held steadily
more optimistic and quasi-pacifist outlooks. Those outlooks suffered sharp rebuffs
in the calamity of 1914–18 but were reasserted during the ‘Roaring Twenties’.
However, the profound economic crisis that began late in 1929, deepened during
most of the 1930s and culminated in the apocalypse of World War II produced
substantially new elite constellations. Military heroes and veterans rose to high
positions, and new sets of managers headed interlocked triumvirates of large
corporations, powerful trade unions and expanded state bureaucracies. American
and British elites were key exemplars of these postwar constellations and they are
worth examining through Pareto’s lens.2

A Short Elite Cycle, 1945–1980

World War II’s technological advances, pent-up consumer savings and upgraded
workforces provided the revamped American and British governing elites with
relatively easy tasks of political management during the early postwar period.
Intertwined Keynesian and welfare state precepts formed the intellectual umbrella
for this management. They taught that smooth economic sailing could be assured

1  The literature on Fascist, Soviet, Nazi and similar elite and regime trajectories
during the interwar period is voluminous, but our limited knowledge of it does not bring
to mind any clear application of Pareto’s theory to those elites and regimes, although
their ‘degeneration’ is implicit in many accounts. See, for example, the study of ‘world
revolutionary elites’ by Harold Lasswell and Daniel Lerner (1951), who mention Pareto
on their opening page but not again. Likewise, in his excellent ‘anatomy’ of the Italian,
Nazi and other interwar fascist elites and movements, Robert Paxton (2004) mentions
the theories of Pareto, as well as those of Mosca and Michels, but only as instancing the
widespread intellectual disillusionment that preceded and attended World War I.
2  A survey of governing elite constellations in all other European and English-
speaking countries after 1945 is found in Higley and Burton (2006: pp. 139–81).
120 Vilfredo Pareto

by employing fiscal stimuli in times of falling demand and that political peace
could be purchased through social compacts – soon elevated to ‘social rights’
(Marshall 1963) – integral to welfare states. Accordingly, main American and
British political elite camps stood for essentially the same policy mix. In the
US, Republicans grudgingly accepted the limited welfare state constructed by
Democrats during the pre-war depression and wartime years. In Britain, a Labour
government implemented and a Conservative government maintained welfare state
measures that had been agreed by the wartime coalition government. Because most
Labour leaders had concluded that government ownership of industry offered no
real advantage, there was little that distinguished the principal policy preferences
of the two main British parties and elite camps (McKenzie 1955).
Limited conflicts over economic issues and general acceptance of a welfare
state’s principal features had an important effect on governing elite outlooks during
the 1950s and early 1960s. This was the tendency to adopt blandly optimistic,
somewhat complacent outlooks of the sort held by successful persons who see no
need for serious social and political change. The elites appeared to perceive their
societies as possessing enough material resources, technology and organizational
skills to surmount any significant problems that might arise. Much was made in
both countries about the lack of issues during election contests, the importance of
candidates’ personalities, the likelihood that the party responsible for consolidating
the welfare state would govern indefinitely, and the decline or ‘end’ of ideology.
In foreign affairs, by contrast, the elites displayed harder edges. They battled
communist forces in Korea, built nuclear weapons arsenals, engineered a global
edifice of defence treaties to contain the Soviet Union, suppressed an insurgency
in Malaya, and subverted nationalist governments in Iran and Guatemala.
It is plausible to regard American and British governing elites from about
1950 until the mid-1960s as balancing Pareto’s two modes of rule, persuasion
and force, with considerable effectiveness. But from about 1965, a less balanced
rule that relied on crafty and deceptive actions, personified by veteran connivers
Lyndon B. Johnson and Richard M. Nixon in the US and Harold Wilson in Britain,
became more apparent. Both countries entered an increasingly turbulent 15-year
period that stemmed in considerable measure from accumulating elite blunders
and vacillations.
One blunder was the major military intervention in South Vietnam ordered
by Johnson and his advisors in 1965. Their hubristic view was that as the
world’s foremost military power the US could not allow developments in South
Vietnam or anywhere else that threatened American interests, added to Soviet and
Chinese power, and violated democratic principles (Goldstein 2009). Supported
enthusiastically by Republicans, the Johnson administration stumbled into a
disastrous war made worse by the political stratagem of treating the war as largely
extraneous to domestic policy and financing it through government borrowing
rather than increased taxation, a deception that soon led to high rates of inflation
and serious erosion of the US dollar. A second source of problems was the set of
programs styled seductively a ‘war on poverty’. This stemmed from an illusion
 Pareto’s Theory of Elite Cycles 121

among senior policymakers and wider elite circles that empathy for the poor
plus reformist zeal could alter the precariousness of low-skilled employment
opportunities, which by the mid-1960s were the root of much poverty and of
an increasingly turbulent civil rights movement among African Americans, the
principal sufferers of restricted employment opportunities. Elite architects of the
war on poverty merely supposed that if the federal government provided sufficient
funds and impetus, cures for limited employment and poverty would turn up
in the course of activities stimulated thereby (Banfield 1970). However, results
commensurate with this supposition were never likely, in part because the ‘war’
was not funded at a level anywhere near what its outsized aims required.
Vehement opposition to the Vietnam adventure and discontents sharpened by
the anti-poverty crusade split the Democratic Party wide open in 1968. Profiting
from the split, Richard Nixon and the Republicans captured the presidency
and prosecuted the Vietnam War deviously, rather than incur opprobrium for a
‘dishonourable’ withdrawal. Instead of also prosecuting the ‘war on poverty’,
Nixon and his domestic advisors pursued ‘affirmative action’ measures for
African Americans and other disadvantaged categories that, however, generated
bitter resentments among many others who consequently felt handicapped in
the competition for jobs and promotions. With the Democrats still split, Nixon
easily won re-election in 1972, negotiated what eventually proved a humiliating
withdrawal from South Vietnam, and engaged in arcane manoeuvres to initiate
relations with Communist China. A year later, Nixon was forced from office
by the Watergate scandal, and another veteran fixer, Gerald Ford, served out
Nixon’s term.
Jimmy Carter, a man who believed deeply that political conflicts are rationally
reconcilable and that social justice is eminently attainable, won the Democratic
nomination in 1976 and defeated Ford by promising to salve the nation’s wounds.
But Carter’s presidency was beset by mounting economic difficulties flowing
from how the Vietnam War had been financed and from crippling oil embargos
sparked by the Yom Kippur War in 1973 and the Iranian Revolution in 1978–79.
By 1980 the ‘misery index’ combining inflation and unemployment rates stood
at 20 per cent. Carter and his administration were derided for vacillating in the
face of a seizure of American hostages by radical Islamists in Tehran and an
invasion of Afghanistan by the Soviet Union. With the Carter and Kennedy wings
of the Democratic Party warring over measures to ameliorate the economic crisis,
Ronald Reagan and a tough-minded phalanx of Republicans and allied military-
industrial interests won executive power in the 1980 presidential election. Reagan
and his entourage installed many previously dissident figures in elite positions,
initiated a pronounced change in policy direction, and sharply altered the political
modus operandi. Viewed through Pareto’s lens, the period between the mid-1960s
and 1980 in the US involved the deterioration of an often cagey but self-deceiving
governing elite whose miscalculations and vacillations culminated in significant
elite circulation and changed policy directions.
122 Vilfredo Pareto

The British elite exhibited a comparable deterioration after the mid-1960s.

This centered on the inability of successive governments to cope with deepening
economic problems during the decade and a half that followed Labour’s 1964
election victory. The problem of inflation, which was widely seen as aggravated
by trade union wage demands and wildcat strikes, was especially damaging. In
1965, the Labour cabinet formulated legislative proposals, similar to the Taft-
Hartley measures already enacted in the US, to curb those demands and strikes.
But the Labour Party’s trade union core bitterly resisted the proposals and forced
their abandonment. Strikes and industrial unrest continued and contributed to a
Conservative election victory in 1970. Seeking to implement their free market
‘Selsdon Park’ manifesto, the Conservatives enacted a law, the Industrial Relations
Act, which corresponded to Labour’s abandoned proposals. But unions managed
to evade the Act’s enforcement and contributed to Prime Minister Edward
Heath’s ignominious U-turn in economic policy. The inability of both Labour
and Conservative governments to deal with industrial unrest underscored a wider
inability to halt the country’s economic slide (Judt 2005: pp. 537–9). Echoing
Pareto’s ferocious attacks on public spending and the pandering to special interests
in the Italy of his time, critics on the left and right feared that buying political
peace through increased government spending and placating sectional interests,
especially trade unions, threatened to create what was variously termed a ‘fiscal’,
‘welfare’ or ‘legitimation’ crisis.
Two indecisive elections during 1974 returned Labour to power, and in
1975 Wilson, who again occupied 10 Downing Street, called a referendum,
unprecedented in British political history, to decide whether Britain should remain
in the European Economic Community (as the EU was then called). This populist
gambit further divided the Labour Party, whose left wing, together with a third of
all voters, flatly opposed continued EEC membership. The British elite thus found
itself in an arrangement, the EEC, deeply disliked and distrusted by large parts
of both main parties’ cadres and much of the electorate. The Labour government,
now led by James Callaghan, plodded on without an effective parliamentary
majority until the legal end of its term in 1979. During the winter of 1978–79,
however, several public sector trade unions demanded wage increases far outside
the government’s parameters. Rebuffed, the unions launched strikes widely
regarded as a crisis that brought Margaret Thatcher and her previously insurgent
Conservative Party faction to power at elections in March 1979.
To summarize á la Pareto, following World War II and until the mid-1960s
American and British governing elites balanced persuasion and force with
considerable effectiveness. Marked if mostly tacit policy agreement, stable party
politics, and spreading prosperity characterized the period. But both elites tended
to mistake a temporary situation for a permanent one. They regarded the welfare
state as a solution to long-standing class, racial, and regional antagonisms, and
they engaged in proliferating payoffs to diverse clienteles in the guise of welfare
state compacts. Underlying employment insecurities were ignored, and policies
that probably exacerbated them were pursued. When restricted employment
 Pareto’s Theory of Elite Cycles 123

opportunities became more apparent and associated discontents surfaced in the

mid-1960s, the two elites found themselves confronting an increasingly ominous
situation for which they had no worked-out analysis. In the US, ‘the best and
the brightest,’ as David Halberstam (1972) sardonically labeled the elite’s inner
leaders, stumbled into a military disaster abroad and a zealous but under-funded
crusade against poverty at home. In Britain, Labour and Conservative governments
could find no way to abate an accelerating economic slide. In both countries,
governing elites became hobbled and unable to avert crises that fragmented
political alignments and intensified elite circulation. In Paretian terms, a short elite
cycle reached its culmination, with significant changes in governing elites and
style of governance ensuing.

A Long Cycle Nears its End, 1980–2008

The governments led by Margaret Thatcher and Ronald Reagan set about
implementing neo-liberal and socially conservative ideas concerning the benefits
of de-regulated markets, smaller governments and more self-reliant citizens.
Acquiring and fostering her ‘Iron Lady’ sobriquet, Thatcher became identified
with tough domestic and foreign policies coloured by moral absolutism, trenchant
nationalism and an uncompromizing political posture (Berlinski 2008). The
nettlesome Miners Union was confronted and broken; the Soviet Union was
assailed; a controversial deployment of US cruise missiles in Europe was endorsed
in the face of mass protests. Insisting that ‘Government is our problem, not our
solution,’ Reagan and his administration cut taxes, sacked striking air traffic
controllers, instigated a deep recession to wring inflation out of the economy, and
undertook an enormous deficit-financed expansion of military forces and advanced
weapons systems, including a ‘Star Wars’ anti-missile defence system in which
Reagan and his advisers professed unbounded faith.
Policy packages that came to be known as Thatcherism and Reaganomics
sought to roll back the state and ‘unshackle’ business through extensive
government de-regulation of the private sector. The Thatcher government’s most
dramatic step was its so-called ‘Big Bang’ de-regulation of financial markets and
the London Stock Exchange in October 1986. This opened the way to a flood of
financial mergers, alliances and networks spanning banks and investment firms, it
encouraged riskier financial manoeuvres and it allowed less experienced players
to enter the market fray. With the arrival in London of US banks and international
hedge funds during the late 1980s and early 1990s, ‘the City’ became a casino-
like place with little regulation or supervision. Although it made the financial
system vulnerable to abuses and potentially concatenating failures, the Big Bang
was a leap of neo-liberal faith embraced by most of Britain’s governing elite and
emulated widely overseas.
In 1982 the Reagan administration secured congressional passage of the
Garn-St. Germain Depository Institutions Act. This greatly relaxed regulation
124 Vilfredo Pareto

of Savings & Loans associations and banks, enabling them to, in effect, gamble
with taxpayer money, because the federal government doubled its guarantee of
S&L deposits. When hundreds of S&Ls became insolvent, the administration
of Reagan’s successor, George H.W. Bush, had to bail them out at an ultimate
cost of $250 billion in taxpayer funds (Phillips 2002, p. 105). Important for the
longer run, the Reagan and George H.W. Bush administrations implemented
measures enabling homebuyers to obtain mortgages without substantial equity
down payments, thus planting the seeds of what eventually became a gigantic
housing bubble and a precipitous decline in consumer savings. Icing on the US
de-regulatory cake was supplied in 1999 when Congress passed the Gramm-
Leach-Biley Act (officially, the Financial Services Modernization Act of 1999).
This in effect duplicated Margaret Thatcher’s Big Bang by repealing that part of
the Glass-Steagall Act, passed during the 1930s, prohibiting mergers and direct
competitions between banks, insurance, investment and securities-trading firms.
The 1999 Act also exempted securities-based swap agreements from Security and
Exchange Commission regulation, thereby heightening financial risk-taking. The
Act is frequently seen in retrospect as contributing directly to the 2008 financial
crisis, because it greatly weakened the regulatory infrastructure necessary for
calculating risks and for preventing Ponzi schemes and other fraudulent practices.
Utilizing Pareto’s lens, it is plausible to say that American and British elites
during and after the 1980s displayed a marked shift in composition and governing
style. The elites’ inner cores consisted of tough-minded leaders and trusted
advisors who viewed de-regulated markets, reduced interest rates, lower taxes,
and trimmed welfare programs as essential for economic growth. When these
panaceas had costly consequences, as in US bailouts of S&Ls between 1989–92
and the Long Term Capital Investment firm in 1998, and when large energy and
communications corporations such as Enron, Global Crossing, and WorldCom
went bankrupt a short time later, they were treated as instances of mismanagement,
not harbingers of crisis.
In Britain, the sheen of Thatcherite reforms faded in a 1990 economic recession
and the country’s forced exit from Europe’s exchange rate mechanism in 1992.
Together with political scandals, widening social inequalities and ballooning
government debt, these setbacks led to the Conservatives’ landslide defeat in the
1997 elections. However, their defeat brought another set of resolute political
leaders, Tony Blair and his New Labour team, to power, and no fundamental change
in policy direction ensued. Embracing neo-liberal policy settings while striving to
enhance social cohesion, the three successive Blair governments privatized and
out-sourced a range of services, including parts of the National Health Service and
the education system. As prime minister, Blair matched Thatcher’s toughness in
foreign affairs by having Britain participate in air strikes against Iraq in 1998 and
the bombing of Serbia in 1999, intervening militarily in Sierra Leone in 2000, and
helping the US invade Afghanistan in 2001 and Iraq in 2003.
After narrowly defeating George H.W. Bush for the presidency in 1992
– courtesy of H. Ross Perot, whose 19 percent of the presidential vote came
 Pareto’s Theory of Elite Cycles 125

disproportionately from Republican voters – Bill Clinton and his administration

remedied the large budget deficits of the Reagan and Bush administrations. This
was done partly through a major tax increase, passed by Congress without a single
Republican vote in 1993, and partly with the benefit of three windfalls:

1. accelerating economic liberalization of China that afforded American

business access to low-cost Chinese labour and a major new market for
American goods;
2. peaceful demise of the Soviet Union and democratization of Eastern
Europe in the early 1990s;
3. new information technology that facilitated global financial operations and
investments and fed a spectacular dotcom bubble from about 1995.

The Chinese, Soviet, and East European developments encouraged a ‘missionary

liberalism’ among American elites, most shrilly articulated by neo-conservatives
who believed that free trade, democracy, and accompanying human rights could
be achieved more or less anywhere in the world and that America’s mission was
to foster this by destroying tyrannies where and when it could (Fukuyama 2006;
Gray 2007; Kaplan 2008). The dotcom bubble undercut remaining elite doubts
about untrammeled capitalism being the engine of limitless economic growth,
and it facilitated the Gramm-Leach-Biley Act’s green light for huge and highly
leveraged financial conglomerates. During 2000, however, the bubble’s sudden
bursting created renewed economic insecurity. This enabled George W. Bush, the
Republican Governor of Texas, accompanied by staunch nationalists and neo-
conservatives, to capture the White House, albeit only after an electoral standoff
in Florida was arbitrated in Bush’s favour by the Supreme Court.
Stymied initially by a Senate the Republicans did not control and by deep anger
among Democrats over how Bush gained the presidency, the Bush administration
broke free of most political constraints after terrorist attacks in New York and
Washington in September 2001. Transformative events, the 9/11 attacks reinforced
leonine proclivities in the political elite, especially in its executive core and in
Bush himself. Within a month, the administration re-grouped around an inner
circle of self-labeled and ultra-hubristic ‘Vulcans’, who insisted that the use of
US military power not be fettered by agreements and accommodations with other
countries, and that any rival superpower’s emergence be blocked (Mann 2004). A
retaliatory attack on Taliban-controlled Afghanistan was launched immediately,
and not later than July 2002, Bush and three or four top advisors decided to topple
Saddam Hussein in Iraq, an undertaking Bush regarded as ordained by a ‘father’
higher than his own (Woodward 2004: p. 421).
Contrary to customary Republican rhetoric about the efficacy of limited
government, balanced budgets and tight monetary policy, the Bush administration
reduced taxes while boosting defence spending to pay for the costly Iraq and
Afghanistan wars, and it introduced a huge government subsidization of
prescription drug purchases by the elderly. The result was swelling federal
126 Vilfredo Pareto

government budget deficits larger than those of the Reagan and Bush Senior
administrations. The deficits were financed by foreign purchases of Treasury
bonds at magnitudes that reached more than $1 billion per day. In monetary
policy, Alan Greenspan, the Federal Reserve chairman and an arch believer in
self-regulating markets, lowered the basic federal interest rate toward zero and
kept it there for over three years. The deficit spending and the low interest rate,
combined with the hands-off posture toward financial markets, especially the
market for sub-prime (high-risk) mortgages, fueled a spectacular stock market
and housing boom, along with a consumer spending spree that eventually left the
average household owing $10,000 in credit card debt. The blithe attitude of the
administration and its business allies about these developments was encapsulated
by Vice President Dick Cheney’s flip remark, ‘Reagan proved deficits don’t
matter’ (Phillips 2006: p. 323). The project of unleashing private markets became
dogmatic de-regulation for its own sake, producing what Greenspan characterized
as ‘exuberant’ but others regarded as wild financial risk-taking.
Consistent with Pareto’s theory, American and British governing elites, in
spite of much handwriting on the wall, were unwilling to abandon or even alter
policies and (in)actions that were pointing to crises. As if to illustrate Pareto’s
scepticism about the importance of reason in politics, the elites’ governing style
and neo-liberal beliefs appeared to ignore and even disparage rational and prudent
measures.
By mid-2007, at any rate, it was undeniable on both sides of the Atlantic that
the Iraq invasion had led to a costly and unpopular debacle. When revelations
surfaced about the Labour government handing out Queen’s Honours and House
of Lords seats in return for political favours, Blair and his lieutenants were forced
out of 10 Downing Street. Gordon Brown, who had been applauded by elites of all
stripes for implementing neo-liberal reforms during his 10-year reign at Treasury,
became prime minister. But he did so on the eve of a financial crisis that began
with the bankruptcy of Northern Rock Bank and its unavoidable nationalization
at the end of 2007, three months before bankruptcy of the major Bear Stearns
investment bank in New York presaged a US financial crisis.
The contours and severity of the crises that took hold in 2008, as well as their
doleful and lingering effects, are well known and need no rehearsal. It is enough
to say that efforts to avert US economic collapse occurred at the height of the
2008 presidential election campaign, demolishing the credibility of Republican
candidate John McCain and ensuring victory for Barack Obama – an improbable
outcome had it not been for the crisis (Linn, Moody and Asper 2009). Similarly in
Britain, the financial crisis and its persistence demolished the chances of Gordon
Brown and the Labour Party to retain power, with Labour losing 91 parliamentary
seats in the May 2010 elections and a Conservative-Liberal Democrat coalition
government emerging from the wreckage.
In sum, proclivities and trajectories of American and British governing elites,
especially their leadership cores, between 1980 and the onset of economic-political
crisis three decades later were characterized by increasing political pugnacity,
 Pareto’s Theory of Elite Cycles 127

doctrinal rigidity, nationalist fervour and religious faith. This did not unfold in
an unbroken way, of course. The John Major and Bill Clinton governments were
less pugnacious than those of their predecessors and successors; the George H.W.
Bush, Clinton, and Blair governments were more tempered by assessments of
realities than those of the Thatcher, Reagan, and George W. Bush governments.
There were important deviations and exceptions throughout the period. But in
broad step with Pareto’s theory about growing imbalances in the psychosocial
propensities of elites, American and British governing elites between 1980 and
2008 became increasingly aggressive, cavalier and hubristic. Also in step with
Pareto, profound crises eventually occurred, and it raises the question of whether
a long elite cycle that began during the years surrounding World War II has neared
or reached its end.

Conclusions

Pareto’s theory of elite cycles is difficult to apply because it is exceedingly

general, whereas concrete patterns it purports to explain are intricate and often
ambiguous. Aware of this, Pareto hedged his theory: elite degeneration during
cycles is a ‘tendency’; it is more pronounced in some parts of a governing elite
than others; there are interludes marked by elite successes and renewed hopes. He
suggested that studies focus on paramount leaders – presidents, prime ministers,
party bosses – because their personalities, policy preferences, and governing
styles can plausibly be assumed to exemplify wider elite propensities, however
hidden or uneven the latter may be. But even with such hedges, the theory remains
more an intriguing vision than one lending itself to ready application. We cannot
claim to have applied the theory convincingly to the cases assayed in this chapter.
Empirical studies necessary for a convincing application – supposing they could
be marshaled – have not been presented. We have, instead, reconnoitered large
trends that appear to correspond, prima facie, with processes of elite circulation
and degeneration theorized by Pareto.
We have been reluctant to characterize American and British elites since World
War II as metaphorical foxes or lions. To be sure, these metaphors and the clear-
cut differences they symbolize are tantalizing. It is tempting to label both elites
as predominantly vulpine between 1945 and the late 1970s and as predominantly
leonine once more clearly tough-minded leaders like Thatcher and Reagan were
in charge after about 1980. Yet in the coldest years of the Cold War, between
1950–1970, American and British elites displayed plenty of leonine fortitude,
and during the 1990s and 2000s they engaged in a vulpine orgy of economic
payoffs and risk-taking. By contrast, labeling as leonine the fascist, Nazi and other
militant elites of the interwar period, as well as the longer-lasting Soviet elite,
seems a less subjective judgment that is consistent with Pareto’s conception of
‘lions’. Nevertheless, governing elites are probably always a mix of ‘vulpine’ and
128 Vilfredo Pareto

‘leonine’ proclivities – of Class I and Class II propensities – and evidence that one
is predominant or becoming predominant is eminently debatable.
Delineating the duration of post-World War II elite cycles in the American
and British cases is also difficult. Here, too, self-immolating trajectories and
culminations of degeneration seem clear enough (at least in hindsight) among the
interwar authoritarian elites and the Soviet elite, but dating cycles among elites
like the American and British is more questionable. The readiness that we detect in
Pareto to entertain the co-existence of short and long cycles, whereby long cycles
subsume shorter ones, helps somewhat. We believe it makes most sense and is
most consistent with Pareto to regard the entire period between World War II and
the present as constituting one long elite cycle that encompassed two relatively
distinct and shorter cycles: from 1945 until pronounced economic difficulties in
the late 1970s fueled significant elite circulations; and from the adjustments made
by substantially reshuffled elites after 1980 until or after the onset of profound
crises in 2008.
If these crises signal the end of a long cycle dating from World War II, then,
following Pareto, elite circulations of era-ending proportions must be occurring.
At the start of 2011, however, this was debatable. In political arenas, the recent
American and British elections had changed ascendant inner elite leaders and
altered compositions of Congress and Parliament materially. In Washington and
Whitehall, most top administrative positions had new holders. In business arenas,
important banks, financial firms and corporations had disappeared, merged, or
remained in government receivership, while leadership teams of more than a
few other firms and corporations had been sacked or otherwise displaced. Costly
military undertakings in Iraq and Afghanistan were being wound back; defence
budgets and military force structures were coming under siege; an outflow of
military commanders associated with the Iraq and Afghan wars had begun. Still,
these and other changes in elite personnel could be regarded as falling short of the
wide crisis-generated circulations Pareto’s theory anticipates.
One possibility was that the crises had not ended and that unsustainable
national budget deficits, fiscal insolvencies of sub-national state and municipal
governments, high rates of unemployment, falling housing prices and home
foreclosures, as well as debt deleveraging by banks, business enterprises,
homeowners and consumers would continue, with spikes in oil prices triggered
by upheavals in the Middle East and North Africa adding to difficulties. In other
words, recovery from the crises that took hold in 2008 might require a decade or
more, during which elite circulations could intensify as a consequence of voter
anger and extremist political and social movements that emerge.
The difficulties encountered when applying Pareto’s theory testify to its
elasticity and vagueness. Is it useful, nonetheless? We regard his theory as boldly
demarcating an outer limit in analyses of elites and politics. Many scholars and
commentators pinpoint elite shortcomings; many dissect elite actions and beliefs;
many discuss the uneasy relationship between elites and democracy. But only
Pareto theorized that elite degenerations are inescapable and cyclical; only he
 Pareto’s Theory of Elite Cycles 129

insisted that elites be studied as wholes; only he attributed many of the calamities
visited upon humanity to elites. In a time of sceptical reflection and sobering
anxiety, his dark vision has an important place.

References

Aron, Raymond, Main Currents in Sociological Thought 2: Pareto, Weber,

Durkheim (Hammondsworth: Penguin, 1967).
Banfield, Edward A., The Unheavenly City: The Nature and Future of Our Urban
Crisis (Boston: Little, Brown, 1970).
Berlinski, Claire, There Is No Alternative: Why Margaret Thatcher Matters (New
York: Basic Books, 2008).
Best, Heinrich, ‘Does Personality Matter in Politics? Personality Factors as
Determinants of Parliamentary Recruitment and Policy Preferences’,
Comparative Sociology, special issue on ‘Circulations and Qualities of Political
Elites’, 2011, (10).
Best, Heinrich and John Higley (eds), Democratic Elitism: New Theoretical and
Comparative Perspectives (Leiden: Brill, 2010).
Cotta, Maurizio and Heinrich Best (eds), Parliamentary Representatives in
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Femia, Joseph V., Against the Masses: Varieties of Anti-Democratic Thought Since
the French Revolution (London: Oxford University Press, 2001).
Femia, Joseph V., Pareto and Political Theory (London: Routledge, 2006).
Finer, Samuel E., Vilfredo Pareto: Sociological Writings (London: Pall Mall,
1966).
Finer, Samuel E., ‘Pareto and Pluto-Democracy: The Retreat to Galapagos’,
American Political Science Review, 1968, 62, pp. 440–50.
Fukuyama, Francis, America at the Crossroads: Democracy, Power, and the
Neoconservative Legacy (New Haven: Yale University Press, 2006).
Goldstein, Gordon M., Lessons in Disaster: McGeorge Bundy and the Path to War
in Vietnam (New York: Holt, 2009).
Gray, John, Black Mass: Apocalyptic Religion and the Death of Utopia (New
York: Farrar, Straus, Giroux, 2007).
Halberstam, David, The Best and the Brightest (New York: Random House, 1972).
Higley, John and Gwen Moore, ‘Elite Integration in the United States and
Australia’, American Political Science Review, 1981, 75, pp. 581–97.
Higley, John, Ursula Hoffmann-Lange, Charles Kadushin and Gwen Moore, ‘Elite
Integration in Stable Democracies: A Reconsideration’, European Sociological
Review, 1991, 7.
Judt, Tony, Postwar: A History of Europe Since 1945 (New York: Penguin, 2005).
Kaplan, Fred, Daydream Believers: How a Few Grand Ideas Wrecked American
Power (New York: Wiley, 2008).
130 Vilfredo Pareto

Lasswell, Harold and Daniel Lerner (eds), World Revolutionary Elites (Stanford:
Stanford University Press, 1951).
Lenski, Gerhard, Power and Privilege (New York: McGraw-Hill, 1966).
Linn, Suzanna, Jonathan Moody, and Stephanie Asper, ‘Explaining the Horse
Race of 2008’, PS: Political Science & Politics, 2009, 42, pp. 459–66.
Lopreato, Joseph, ‘Introduction’. In Giulio Farina (ed.) Vilfredo Pareto:
Compendium of General Sociology (Minneapolis: University of Minnesota
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Mann, James, Rise of the Vulcans: The History of Bush’s War Cabinet (New York:
Viking, 2004).
Marshall, Alasdair J., Vilfredo Pareto’s Sociology: A Framework for Political
Psychology (Aldershot: Ashgate, 2007).
Marshall, Thomas H., Sociology at the Crossroads (London: Heinemann, 1963).
McKenzie, Robert T., British Political Parties (London: Heinemann, 1955).
Pareto, Vilfredo, The Mind and Society: A Treatise on General Sociology. English
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 Chapter 7
Pareto, Mill and the Cognitive Explanation
of Collective Beliefs: Unnoticed “Middle-
Range Theories” in the Trattato
Alban Bouvier

Introduction

Sociology is a science in which there is neither an overarching theory to which

all scientists are ready to commit (as is the case for biology), nor even a general
mainstream to which most scholars belong (as is the case for economics). I am
speaking here of sociology as a specific field in social science, whose boundaries
with other fields, in particular ethnology and history, are indeterminate and quite
controversial. In a context where no paradigm is prominent, it seems more relevant
than in other sciences to return to the discipline’s founding works. One suspects
that important heuristic paths outlined by the pioneers were not explored in as much
depth as they could have been early in the discipline’s history. The investigation
of only certain paths might have been favoured initially, which forever buried
potentially productive modes of inquiry – perhaps for incidental reasons. Thus in
sociology, since Talcott Parsons (1937), who seemed to have been aware of the
risk of laying aside important heuristic ideas, a very common way of practicing
theory has come to be through commenting on founders’ works. Of course, this
indirect way is not the only way to proceed in the development of social sciences.
Habermas (1984–7), for example, was rightly reproached for restricting, unlike
Parsons (1951), his interests in sociological theory to commentaries on founders’
works. But no procedure should be neglected, however indirect and partial it
may be. And Habermas was reproached above all not for commenting at length
on Marx, Durkheim or G.-H. Mead, but for failing to extract empirically testable
analytical models.1

1  I wish to thank the participants of a workshop held in Manchester devoted to a

discussion of the first drafts of this book (11–12 February 2010), as well as my Italian
colleagues and PhD students for their very relevant comments on two lectures on this issue
given in Perugia and organized by Caterina Federici (16–17 March 2010). I am especially
indebted to a Columbia PhD student, Amelia Spooner, for her meticulous written comments
on the penultimate version of this chapter.
132 Vilfredo Pareto

Unlike Habermas, a few scholars have recently undertaken such work and
have produced fruitful results, even regarding the works of the most renowned
founders of social science whose views had been underestimated or neglected,
either in theoretical sociology or in the philosophy of social phenomena. Thus
certain historical commentaries have given birth to a specific analytical modelling
of social phenomena. Jon Elster is one of these scholars. He has published very
innovative rereadings of Marx (Elster, 1995) and Tocqueville (Elster, 1993) which
hold value for political scientists. Raymond Boudon (1994) did similar work
on various classical authors such as Weber and Tocqueville, as well as Simmel.
In particular, Boudon showed how productive some of Simmel’s ideas are for
contemporary sociology of knowledge and cognitive sociology. Finally, in a very
different style distant from exegetic comments – but nonetheless analytical, as
Elster’s and Boudon’s work is – Margaret Gilbert’s (1989, 1994) rereading of
classic authors such as Durkheim and Simmel on the elementary nature of groups
is, according to many theoreticians, another exemplary way of reviving ideas that
may not have been subjected to thorough analysis in earlier scholarship.
The prominent fathers of sociology who have not been as thoroughly
reevaluated as Marx, Weber, Tocqueville or Durkheim have been, now deserve
our special attention. Pareto is probably one of these founders whose sociological
work still remains relatively unexplored, though. Turner, Beeghley and Powers
(1981), Powers (1987), Boudon (1981, 1994, 1999), Busino (1999), Bouvier
(1992, 1995, 1999b, c, 2000), Femia (2006, 2009) and Marshall (2007), have done
their best to remedy this deficiency. The aim of my chapter is not to suggest that
careful comments on Vilfredo Pareto’s sociology could at last provide us with the
“missing” overarching theory in sociology any more than commentaries on Marx,
Durkheim or any other classic author could. I argue that such a theory, if it is to
exist, should consist of a number of micro-models, such as those Elster, Boudon
and Gilbert, carefully constructed. These micro-models will look like what Merton
(1957) called “middle-range theories,” whose concern is to help account for
psychological mechanisms and social micro-interactions from which larger social
phenomena emerge (Hedström and Swedberg, 1998; Hedström and Bearman,
2009). What I claim is that Pareto has provided us with numerous micro-models
in sociology, some of which are original, but which nonetheless still require some
evaluation. Besides, these “models” are generally far too vague in Pareto’s Trattato
di Sociologia Generale to be considered as conceptual models strictly speaking;
rather they are just “schemas,” almost all very partially drawn. My specific goal
in this chapter is to try to transform these schemas into much clearer and more
explicit conceptual models in order to better evaluate their empirical relevance,
which implies making more conceptual distinctions than is common in comments
on Pareto’s sociology. To better evaluate the originality of Pareto’s models, I will
compare them to those of other social theorists.
Even if it is probably not the real core of Pareto’s sociology (Turner et al.
1981; Powers, 1987), the most original part of Pareto’s Trattato deals with the
very contemporary issues of the rationality of beliefs and the rationality of actions
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 133

(Valade, 1990). These two latter issues are connected, given that many actions can
be considered as rational or irrational depending on the rationality of the beliefs
upon which they are based. I will concentrate in this chapter on the sole issue of
the rationality of beliefs, or more precisely, collective beliefs. I do not contend
that Pareto made a thorough examination of these general issues. Indeed, in the
final part of this chapter I will bring our attention to certain important limitations
of Pareto’s general account of collective beliefs. I also do not maintain that his
analyses of singular examples were always profound. However, Pareto gave
probably the fullest account that has ever been given of the various roles that
justification of beliefs and actions (“argumentation”) can take within a sociological
framework. Chaïm Perelman and Lucie Olbrecht-Tyteca (1969), along with
contemporary argumentation theoreticians such as Toulmin (1958) and Hamblin
(1970), may have gone further in the investigation of certain micro-mechanisms of
argumentation. Yet neither scholar spoke in general of the issues of argumentation
procedures within the framework of social science as broadly as Pareto did.
I will proceed step by step, discussing several of the most widely accepted
views of Pareto’s theory of collective beliefs, arguing that each one is partial and
too narrow. In each case, I will introduce new distinctions, which will result in a
much broader view of Pareto’s conception of beliefs. I will try to avoid Pareto’s
very idiosyncratic vocabulary as much as possible because, according to Pareto
himself, this may be deeply misleading (Pareto, 1935: §119, §868).2 Furthermore,
the meaning of Pareto’s specific vocabulary varies widely throughout the Trattato
depending on the specific context. On several occasions, I will prefer John Stuart
Mill’s wordings, generally clearer than Pareto’s. At the end of this chapter, I will
even use one of Mill’s specific psychological micro-models, because it turns
out to be more refined and empirically more relevant than Pareto’s models. By
referring to Mill, who gave both a psychological and logical account of logical
errors, I will remain very close to Pareto’s programme. As Pareto himself wrote,
after speaking of Mill, “It is the province of logic to tell why a reasoning is false.
It is the business of sociology to explain its wide acceptance” (§1411). Pareto
thought of his sociology as the complement of Mill’s logic, (§1410–12) but he
seems to have underestimated the conceptual accuracy and the empirical relevance
of psychological models involved in the System of Logic.3
The careful investigation of Pareto’s micro-models should lead us to re-read
Pareto’s Trattato di Sociologia Generale in the continuity of Mill’s System of Logic
and to emphasize the cognitive aspects of Pareto’s sociology (Bouvier, 1992)
counter to the usual ultra-emotivist interpretations (Aron, 1965). But it should
also lead us also to re-evaluate the Machiavellian aspect of his thought, upon
which many scholars have insisted for some time (Burnham, 1943; Fiorot, 1969;
Femia, 2006; Marshall, 2007), in favor of a more complex, less dissembling, and

2  All references to Pareto are to Pareto (1935). I will not specify it any more.
3  On the relationships between logic and psychology in Mill, seefor example,
Skorupski (1998).
134 Vilfredo Pareto

more communicative view of political, moral and religious discourses. The first
two parts of this chapter will be devoted to the latter concerns and the remaining
sections to the cognitive dimension. The issues, though, are related, in particular
to the role of emotions in beliefs and in actions.

A Casualist, Irrationalist and Emotivist Sociology of Beliefs

One does not usually distinguish between different micro-theories or models (or
middle-range theories) in Pareto’s work, but rather interprets Pareto’s sociological
theory as one general theory. There are disagreements about the central meaning of
this theory, but according to many scholars, Pareto’s sociology explains that many
actions – namely, those that are not technical actions based on scientific reasons
or pragmatic actions which find their grounding in sound empirical information
– are based on instinctive motivations alone. According to this interpretation,
Pareto would claim that the beliefs or alleged beliefs that often accompany human
behaviors and are supposed to justify them turn out to have no causal role at all in
triggering these behaviors. Their sole real causes are instincts. It is why one could
call such a theory a causalist theory, in opposition to a rationalist theory, which
would claim that the reasons people give as explanations for their beliefs and/or
actions are – or, at least may be – their true “causes.” At first sight, such a rationalist
theory could be called “causalist” as well, since it envisions reasons as “causes.”
But, in this latter case, “cause” is not used in its proper sense: what triggers
behaviors (or actions as involving body movements) is necessarily composed of
neurophysiological processes – and those are easier to figure out when one thinks
of instincts than when one thinks of reasons. Besides, certain philosophers tend
to support a dualist view of the mind, so although reasons motivate actions, these
reasons cannot be called “causes” of actions in any sense (even in a weak sense)
because this would be a category mistake. This kind of dualist view was supported
initially by Dilthey at the end of the nineteenth century, but was reformulated in
the mid-twentieth century by Wittgenstein in a more subtle – and now common –
way (Winch, 1958).
Without a doubt, one can find a causalist-“instinctualist” theory in certain
passages of the Trattato. One could even argue that, in some contexts, Pareto
seems to suggest that absolutely no belief allegedly supporting actions has any
specific role in triggering behaviors or any mental mechanism: beliefs are merely
by-products of the instinctive tendency to rationalize, namely to use reason without
any specific reason (what Pareto calls the “instinct of combination” or the 1st class
of “residues,” §972–5). Beliefs, then, are nothing more than “epiphenomena.”
Such an extremist theory is clearly anti-functionalist in both a biological sense (see
Malinowski’s anthropology, for instance) and a sociological sense (as in Radcliffe-
Brown’s and Parsons’s work) (Homans, 1941, 1950). For Pareto, rationalization
frequently helps to fulfill neither individual nor social needs.
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 135

One must notice that such an anti-functionalist account of certain beliefs

has been rediscovered by authors such as Steven Pinker (1997) and Pascal
Boyer (1994), especially in regard to religious beliefs in general and theology in
particular. In such a view, religious beliefs are completely useless by-products of
Darwinian evolution. More generally, such a theory resembles eliminativist views,
which maintain that neither the notion of belief nor the notion of desire belong to
the world of science (Churchland, 1984): rather they are merely commonsense
explanations of behaviors, which are to be eliminated and replaced by purely
neurophysiological explanations. Anti-functionalism and eliminativism are
variations, currently much debated, within the framework of causalist theories. In
Pareto’s time, this rough outline of a theory was original. It has anticipated more
contemporary conceptions.
Pareto’s sociological theory is sometimes called “irrationalist” to signal its
extremist stance (Carroll, 1973; Boudon, 1986), in which reason does not play
any role (“strong irrationalism”). That being said, it has been called “irrationalist”
as well in a weaker sense (“weak irrationalism”). One could claim that conscious
reason – which is necessary to plan actions carefully – often does not illuminate
the preparations for actions, so that these actions may often lead to effects contrary
to the goals (often self-interest) of those who have acted. Human actors are quite
often “irrational” in this sense. Rational action, understood as conscious action
based on the best available information and the attempt to reason as logically
as possible – what Max Weber called Wertrationalität – is at least subjectively
rational (where actors expect their actions to achieve certain effects), even if it is
not necessarily objectively rational (where bad information or effectively wrong
reasoning produces effects other than those the actor has desired) (§160, §541,
§855, §960). An action that is simultaneously subjectively and objectively rational
is rather rare: actors are often objectively irrational even if they are subjectively
rational. The Trattato provides us with arguments for this much more moderate
and subtle theory (rather than for strong irrationalism). According to Pareto, the
tendency to rationalize is sometimes actually quite valuable, for example, when it
leads to actions based on well-informed arguments. Such arguments help humans
avoid the bad consequences of the too-limited rationality of purely instinctive
behaviors. This is what Pareto oddly calls “logical” action, as opposed to “non-
logical” action (Pareto, 1935: Chapter 2 and Chapter 3).
Scholars have often suggested that Pareto’s theory of action is “emotivist”
because it seems to assume that instincts are accompanied or maybe even
triggered by emotions (e.g., fear triggers the conservation instinct). Actually most
of them, such as Aron (1965) and Boudon (1994, 1999), do not use the word
“emotivist,” but their interpretation could nevertheless be called “emotivist.” Both
insist on “feelings” as the real source of actions in Pareto. Boudon tends to think
that Pareto’s sociology is causalist, weakly irrationalist and emotivist without
recognizing clear differences between these categories. I claim, on the contrary, that
these conceptual distinctions make sense and facilitate evaluation of the empirical
relevance of Pareto’s sociology. This wording has been used in the context of the
136 Vilfredo Pareto

still contemporary, more or less rough opposition, between “emotivist” (Carnap,

1928; Ayer, 1936; Stevenson, 1937) and “cognitivist” (Toulmin, 1950) models.
According to Carnap and Ayer, only scientific statements are based on reasons,
while ethical and aesthetic statements are merely expressions of emotions.4
Toulmin argued, on the contrary, that ethics can be justified by reasons. It must
be granted that Pareto does not stray too far from this kind of emotivist view.
However, given that Pareto firmly distinguishes between instincts and emotions, it
would be more accurate to say that Pareto’s theory is “instinctualist.”5 According
to Pareto, this narrow theory of action – or more precisely, of behavior – is valid
for all animals and not only for humans (§155, §156). Humans are different from
other animals (or at least from most other animals) only to the extent that most of
their actions are accompanied (and justified) by beliefs or alleged beliefs (§157).
Again, one must agree that the Trattato includes such an emotivist – or rather
instinctualist – theory (§850, §868).
However, when we consider Pareto’s general sociology, we find that it turns out
to be mixed and to have both emotivist and cognitivist aspects. In the remaining
sections of this chapter I will focus on the cognitivist aspects of Pareto’s sociology,
which have been much underestimated in the existing scholarship. These new
aspects consist of heuristic micro-models (or middle-range theories) closer to
current psychological theories. Nevertheless, it is necessary to clearly first mark
out the room allocated to instincts in Pareto’s sociology of beliefs.

An Expressivist and Communicative Sociological Theory of Beliefs?

Expression, Dissimulation and Communication

According to one of the most widely shared views, Pareto’s theory of action
states that many human actions are not just “accompanied” by beliefs that do not
play any role (as the eliminativist interpretation contends), but that these beliefs
dissimulate the instinctual source and express an instinctual source different from
the genuine source. Of course, this view is not incompatible with the eliminativist
view: whereas many beliefs may be just epiphenomal by-products, many others
may express/dissimulate instincts, and may, as a result, play a role in the process
of communication.
Actually, the theory of dissimulation is more often attributed to Pareto than
the theory of expression. However these two (middle-range) theories are as

4  See the general rediscovering of the role of emotions in cognition itself (e.g.
Damasio, 1994).
5  I do not want to use more common wordings such as “behaviorist” or “Darwinian”
because these conceptions represent certain specific kinds of “instinctualist” theories among
many possible others. On the relationship between Pareto’s and Darwin’s conceptions, see
Lopreato and Crippen (1999). On the relationships with behaviorism, see Henderson (1935).
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 137

complementary as the recto and the verso of a sheet of paper. Pareto provides
many examples of beliefs that express certain instincts but dissimulate the genuine
ones. Numerous examples are borrowed from political contexts. For instance,
Pareto writes that politicians rarely try to persuade citizens to vote for them by
invoking a love of power, for this would appear cynical. Rather, politicians claim
that their goal is to serve the nation, and they attempt to make people believe
that they seek the public good (§854). In certain cases, they may even succeed in
persuading themselves that they are really motivated by such finer feelings (§854).
Pareto does not deny that there is an “instinct” of solidarity in humans and in
certain animals or other altruistic instincts such as compassion, and he suggests
that these instincts might sometimes genuinely support the claim to believe in
the value of solidarity and be the genuine source of action (§1138, §1142, §1144,
§1145, §1146, §1148, §1150). Nonetheless, in the same passages, he says that
invoking these instincts as the genuine source of one’s own behavior is often both
false and misleading, either deliberately (the alleged “beliefs” are merely apparent
beliefs, both false and insincere) or involuntarily (the alleged beliefs, although
objectively false – because the genuine source is self-interest – are nevertheless
subjectively sincere) (§854). This account of beliefs is very close to those of La
Rochefoucaul, Nietzsche, and other classic authors. We might recall, for example,
Marx’s analysis of the self-interested motivations of the French delegates voting
for the Declaration of the Rights of Man in Capital (1887: p. 518). Pareto even
envisions cases in which the sexual instinct is the real source of certain actions,
but is dissimulated by an idea that expresses a completely different instinct, e.g.
a call for chastity (priests who continually discuss chastity in their sermons may
actually be obsessed by sexuality) (§852). Here Pareto is close to Freud. Globally
speaking, one can conclude from these comparisons that Pareto’s expressivist/
dissimulationist theory of beliefs is not especially original. Nevertheless, this theory
is different from eliminativist, anti-functionalist or purely instinctualist views since
the expression of beliefs plays an effective role, actually a communicative role,
either in indicating to other people the genuine source of actions or dissimulating
the source and subsequently misleading people.
One can notice that Pareto is not very explicit on the idea that beliefs may
express genuine instincts; rather he emphasizes the idea of dissimulation.
Commentators have claimed, therefore, that his sociology resembles the
Machiavellian conception of political ideologies. They are right but, unlike these
commentators, my central aim in this chapter is to extract from Pareto’s sociology
micro-models whose significance has been neglected or underestimated, precisely
because they were less explicit in the Trattato.
Yet Pareto’s theory is explicitly expressivist on another important aspect,
since Pareto argues that humans need to express their feelings or instincts by
external actions, if not explicitly by a kind of very specific action that one might
call the discursive action of justification. Thus Pareto identifies a specific class
of “residues:” “the need to express one’s feelings by external actions” (§888,
§1189–212). This expressivist model focuses on the expressivity of actions much
138 Vilfredo Pareto

more than on the expressivity of discourse. Yet Pareto has elaborated less on this
specific point than has Malinowski (1922), who describes at great length the
importance of magical rituals (more than mere words) as a way of expressing deep
feelings.
Residues as instincts or primitive motivations. As mentioned previously,
interpreters seem frequently to neglect that, according to Pareto, all beliefs are
not necessarily false or insincere. True and sincere beliefs may exist. Pareto
is ready to recognize that there may be genuinely altruistic (§1148, §1152 5th
point) or chaste (§1163, §1165, §1167, §1169–71) behaviours; this is clear given
Pareto’s classification of what he prefers to call “residues” (what I have until now
referred to as “instincts” for pedagogical reasons). We have also suggested that
Pareto’s conception of beliefs was probably influenced by Mill’s System of Logic.
Commentators on Pareto’s sociological theory have often not noticed, at least to
my knowledge, that Mill also uses the word “residue” in his account of scientific
method. Pareto very probably borrows this term from Mill, as he does the word
“derivation” (to be discussed shortly), although Pareto intends the words to have
different meanings from Mill’s usage.6 Let us now turn our attention to the general
idea that “residue” is a methodological term, and to the fact that Pareto prefers to
speak of “residue” rather than of “instincts” for methodological reasons.
Pareto often uses the term “residue” in the framework of the previous micro-
theory; in particular, he uses this term when he claims that beliefs are the mere
by-products of instincts that have the capacity to dissimulate the real source of
actions. In fact, when these beliefs (or rather alleged beliefs) are analyzed and
reduced, what remains are the “residues” of analysis (§851, §862). The real
sources of action, then, are merely instincts. But because these instincts have been
discovered not directly, but only indirectly via the analysis of beliefs expressed in
discursive reasoning, Pareto does not contend that he has given a correct account
of them that might be comparable to what a neurologist or a psychologist using
other methods could produce (§851, §852). He uses only what is sufficient to take
beliefs or alleged beliefs into account within a sociological framework. This may
help explain why Pareto does not try to reduce the numerous residues-instincts (six
classes divided in many sub-classes) to a smaller number, as Freud does for drives
(only two: sexual drive vs instinct of preservation; or later: Eros vs Thanatos).
Pareto never makes any reference to Mill’s Method of Residues, one of the
four scientific Methods with the Method of Agreement, the Method of Difference
and the Method of Concomitant Variations (Mill, 1963, Book III, Chapter VIII).
However the process I have described as Pareto’s method is very close to the
Method of Residues, which Mill illustrates by examples drawn from Astronomy,
Physics or Chemistry if not from Psychology or Sociology (Mill, 1963, Book III,
Chapter VIII, §5). Because the term “residue” is a methodological term, Pareto can
use it in other contexts, yet it takes on different meanings in those new contexts. It

6  Because of a lack of space, I will not examine in further detail here (see Bouvier,
1995) the differences in usage between Mill and Pareto.
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 139

is a mistake to state that residues always deal with instincts; even more important,
we cannot say that residues always deal with emotions. Some classical authors,
such as Parsons (1936), as well as a few historians of sociological theory, such as
Turner, Beeghley and Powers (1981: pp. 386–90), have clearly observed as much;
I will attempt to confirm their insights shortly.
These residues are, if not the ultimate source of action or the ultimate principles
of action, at least close to them. Pareto could have used this very phrasing (“ultimate
principles”), and then followed Mill’s usage. In fact, Mill makes a distinction
between derivative laws and primitive laws, which he sometimes calls ultimate
laws or ultimate principles (Mill, 1963, Book III, Chapter XIV, §1; Chapter XV,
§3, etc.). He specifies that the primitive laws or principles can be discovered by
backward reasoning from derivative laws. Mill’s notion of law is very close to
the notion of cause. Indeed, if we ignore the exact wording (in terms of “laws”),
Pareto resembles Mill even more closely. Pareto also seems to have isolated
“instincts” through a process of backward reasoning. Pareto most likely began his
research by considering certain effects or expressions (“derivative principles”) of
instincts and then attempted to find their cause or source (“primitive – or ultimate
- principles”) (§886). At the same time, Pareto seems to have thought that genuine
ultimate principles – “instincts” – probably lie beyond residual instincts – because,
after all, he arrived at a discussion of residual instincts only indirectly.
Derivations as derivative motivations in Mill-Pareto’s model. Pareto calls the
justifications of beliefs “derivations” (or sometimes “derivative,” §868, §879–80,
§1397). Yet he often uses the word “residue” and the word “derivation” with such
different meanings, depending on context, that what are called “residues” from
a certain aspect can be viewed as “derivation” from another (e.g., §877, §882).
Thus, I would like to claim that the use of the term “derivation” to designate
beliefs or alleged beliefs is both useless at the present stage in this account of
Pareto’s theory of actions and beliefs, and even misleading. One could surely say
here, following Mill’s usage, that some instincts are less primitive than others,
and consequently are “derivative,” – for example, the self-interested preservation
of individual integrity might be more primitive than solidarity (§1138–9, §1152)
– although Pareto does not use the term “derivation” and “derivative” in this
sense when he refers to residues as instincts (as we will soon see, he uses these
same words in other contexts). When Mill speaks of the properties of objects, he
makes a distinction between primitive (or, more precisely, ultimate) properties
and derivative properties, and takes the example of chemical bodies (Mill, 1963,
Book I, Chapter 7, §6; Book III, Chapter 20, §2). One of Mill’s main concerns in
this context is to account for what is now called the emergence (and sometimes
the “supervenience”) of some properties over others. Mill sometimes speaks of
the “generation” or the “production” of these properties in place of “derivation,”
as if these words were interchangeable. But again, the classification of “residues”
(namely instinctual residues) does not make any clear reference to this idea.
Although Pareto sometimes seems to be close to such a viewpoint (§876), he never
140 Vilfredo Pareto

speaks explicitly of elementary instincts, nor does he mention “compounds” of

elementary instincts (§888. Bouvier, 1992: pp. 355–6, n. 19).
One could also argue, extending some of Pareto’s seminal ideas within Mill’s
conceptual framework, that certain instinctual residues (or motivational principles)
are more primitive than others, but that derivative (motivational principles) are
invoked more often because they are more readily accepted by human society
(§854). Without any reference to Pareto, Elster (1999) has recently envisaged how
feelings can transform themselves into other feelings. We could say, then, that
some feelings are primitive and others are derivative, at least functionally.
To conclude our examination of this account, let us take up the notion of residue
as an indication of one methodological way by which the real source of actions can
be discovered, and let us lay aside the notion of derivation, as it is misleading in
this framework – except if we use it in the manner Mill used it. In this case, some
instincts (discovered through the Method of Residues) are primitive and others are
derivative. One might even add that the former kind of instincts might be said to
be more residual than the latter, since backward reasoning should lead us from the
latter to the former.
Finally, we have to notice that, unlike the eliminativist account in particular,
Pareto’s expressivist/dissimulationist account of beliefs in relation to instincts
attaches a communicative value to beliefs expressed in discourse.

A Sociological Theory of Beliefs as Involving Logical Deductions

In numerous passages, Pareto does not focus on the emotive (or instinctual)
dimension of beliefs, but on the contrary, on their cognitive – more precisely,
their logical – dimension (§1405–18, §1543–686). This viewpoint converges with
a conception of residues either as moral principles or as metaphysical/physical
principles.

A  Residues as Primitive Moral Principles and Derivations as Derivative Moral

Principles in Mill-Pareto’s Model.

According to a more refined view than the “instinctualist” view of Pareto’s theory
of beliefs and actions (which we examined in the previous sections), Pareto’s
viewpoint deals more with an account of moral standards or common moral
principles, which vary depending on groups and societies, than with a search for
instinctual (and universal) principles. According to this model, outlined in the
Trattato, what motivates action is not mere instinct but rather moral principle. This
requires consciousness (whereas instincts are unconscious). Nevertheless, Pareto
remains ambiguous on this point. In fact, he often speaks of “moral feelings,”
which could refer either to instinctual emotions corresponding to moral virtues
like pity or compassion, or to moral principles themselves. He also speaks of
“moral feelings” and “moral principles” as if the terms were interchangeable
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 141

(§1113–206). Of course, one might say that altruism is either based on the instinct
of solidarity, or that it is based on an explicit moral imperative requiring one to
exhibit solidarity. As mentioned earlier, Parsons and Powers have rightly focused
on the moral use of the word “residue,” but Parsons did it so much that he has
tended to understand residues as nothing more than moral principles – in complete
opposition to the most common commentaries on the subject.
The reducibility of moral principles to moral feelings has been a vexing
philosophical issue since at least Kant’s day, and the discussion is still lively.
According to one common conception, which resembles Hume’s thought
closely, morality follows spontaneous tendencies. According to a second line
of reasoning, closer to Kant’s, true morality is duty. Hence moral action does
not follow spontaneous tendencies but has to work against them. In this view,
morality begins only when one exhibits altruistic behavior to people for whom
one does not feel any sympathy. It is clear that Pareto does not believe in Kant’s
account of morality. Furthermore, Pareto maintains that moral principles express
only spontaneous tendencies; consequently, moral principles are reducible to
spontaneous tendencies. Nevertheless, he turns out to be also very much interested
in analyzing the actual content of moral theories.
In this context, Pareto again uses the word “residue,” as well as the word
“derivation,” but in two different senses. Let us now focus on one meaning
only. According to Mill’s usage (yet Mill does not use these words for moral
examples in the System of Logic), if the residue is a primitive moral principle, for
example, “Stand in solidarity with others,” the derivation would be constituted
of the logical consequences of this general principle, allowing it to apply to
particular situations (e.g., “Send money to Haitians so they may survive after
the earthquake”). Pareto, however, is not concerned with the particular logical
consequences (“derivations” in Mill’s sense) of such a general principle. He is
concerned with the account for the varieties of moral systems in the human world
- there is Kant’s ethics, but also Christian Ethics, Muslim Ethics, Utilitarian
Ethics (such as Mill’s Ethics), Stoicism, Epicureanism and a multiplicity of tribal
Ethics - whose goal is to justify this kind of principle itself, so that this moral
principle (“Stand in solidarity with others”) turns out to be a logical consequence
of more primitive principles. It is these deductions that Pareto calls “derivations.”
The use of the term “derivation” here is an example of Pareto’s indeterminate
use of concepts. In fact, the statement “Stand in solidarity with others” might
be viewed, if we consider it in light of certain lexical uses of the words in the
Trattato, merely the expression of an (instinctual) residue (§970, §1113–206).
According to other lexical uses in the Trattato, however, the same statement
would be viewed as a derivation understood as a logical consequence of alleged
more primitive principles (either theological, like in Christianism, or political,
like in Marxism, or metaphysical, magical, etc. …) (§863, §1414, §1416, etc.).
Even if Pareto does not refer to Mill as much as he could have, it is nonetheless
remarkable that his thought bears a striking resemblance to other aspects of Mill’s
thought. It is even more surprising that Pareto fails to refer to a famous example
142 Vilfredo Pareto

in the System of Logic which would have served to illustrate his argument. In that
passage, Mill (1963, Book II, Chapter 3, §3) refers to Lord Mansfield’s famous
advice to a juror who did not know the morals and laws of the country where he
would be staying: “Try to judge according to your deepest intuitions but above all
get out of any justification of your judgment.” In other words, the juror’s judgment
would probably be fair, but his justifications would surely be wrong. Pareto, for his
part, writes: “in non-scientific reasoning, what usually happens is that abandoned
premises are replaced by new ones – one residue gives way to other residues”
(§1416, 2d point). Pareto refers to various examples, especially moral ones. For
example, Theist premises may take the place of Catholic premises, and if these
premises are abandoned, they in turn may be replaced by Marxist premises.
Nonetheless, the logical consequences will roughly be the same in every culture
(e.g. lying, thievery, and murder are prohibited in every culture, except in particular
circumstances which are always more or less the same, such as self-defence). We
might take note of the fact that Mill’s and Pareto’s skepticism about the general
justifications of moral judgments is in line here with Hume, and it should also
remind us of Aristotle’s casuistic ethics (as opposed to Kant’s ethics). As such,
Pareto’s account of moral and juridical reasoning is not especially original.
Within the framework of this sociological theory of moral beliefs as logical
deductions (or “derivations”), Pareto makes a further distinction between simple
deductions or derivations, and complex deductions or derivations, meaning that
both may have exactly the same normative conclusions. He takes the example of
Marxism, of which more or less sophisticated versions exist. It goes without saying
that Das Kapital is much more complex than The Communist Party Manifesto,
but the normative message of both texts is nevertheless the same (§1416). Pareto
writes that more sophisticated versions serve only to lend intellectual authority to
the author’s conclusions. This means that such works are not useless, since they
are more easily accepted by cultured people. Pareto does not elaborate further on
this point, but one can infer that the instinct to rationalize is probably stronger
in certain people. Therefore, such people need more complicated justifications
(derivations) to be satisfied. To restate what we have said previously, Pareto’s
account of collective moral beliefs is quite close to Malinowski’s account of
cultural variety. Malinowski (1926) tended to think that common sense in the
evaluation of behaviors is universally widespread, more so than it might seem
at first glance. Nonetheless, the beliefs that justify behaviors vary according to
cultural and historical context.
Within the framework of the micro-theory that seems to emerge here, Pareto
notices that one can observe both a call for the defence of the integrity of one’s own
person, and a call for compassion towards other people. According to Pareto, this
suggests that residues as instincts act in opposition to one another, and residues as
moral principles do so as well (§888). Jon Elster (1999) has emphasized this aspect
in his recent work. Elster cites traditional proverbs to show how justifications for
behaviors are so incredibly varied that for every proverb recommending a certain
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 143

course of action, another proverb advising exactly the opposite behavior can be
found.
Pareto also adds that most principles which seem to be quite radical in
principle (e.g. “It is forbidden to kill anyone”), may make provision for exceptions
under certain circumstances (e.g. one might kill another person in order to save
one’s life, or in defense of one’s country) (§1558). These exceptions, however,
will be explicitly specified only when one is confronted with such circumstances
(§1558). Of course, it is always easy to be insincere and, like the Jesuits, to add
ad hoc exceptions that promote one’s own self-interest when moral principles
obstruct the accomplishment of one’s goals. Furthermore, moral principles may
seem significantly more different than they actually are if one remains attached
to merely ideological principles instead of to effective principles. Again, Pareto’s
statements are close to Malinowski’s (1926).

B  Residues as Metaphysical (or Physical) Principles and Derivations as

Metaphysical (or Physical) or Normative Logical Consequences: A More General
Sociological Theory of Beliefs – Normative or Not – As Logical Deductions.

Depending on the context, Pareto focuses on very different aspects of beliefs,

which helps explain why numerous outlines of micro-models or middle-range
theories can be found in the Trattato. Thus, according to the previous account,
as partial as the other ones, of course, primitive principles from which logical
conclusions can be derived are always moral principles, possibly expressing moral
instincts.
A more important point than that stated above, is that the principles from which
moral conclusions such as the appeal to solidarity or the interdiction of killing are
drawn are not necessary themselves moral principles. This proves, once again,
that residues are not reducible to moral principles or moral feelings – but Pareto
calls them “residues” as well. He is speaking here of a “metaphysical residue”
(§1414), for example, regarding the existence of a god as a principle upon which
the interdiction of murder is based.
Pareto’s anthropological theories do not stray far from their naturalist
perspective. Yet Pareto does not give any explanation for the origin of religious
ideas such as God. On the contrary, Pascal Boyer (1994), a contemporary
anthropologist who does not focus on explaining moral justifications, but rather
religious ideas, sets forth an original idea on this subject. Boyer does not argue
that all religious ideas are based on the same universal primitive ideas – which
might be in line with Pareto’s general views on collective beliefs, but seems hard
to demonstrate according to most anthropologists, given the great variations in
religious beliefs. Instead, Boyer argues that all religious beliefs are based on the
same cognitive mechanism which tends to violate these universal basic ideas (or
primitive “categorizations”) such as the belief that a stone cannot fly and does not
need to eat because a stone is a mineral object and that such objects cannot fly and
do not need to eat. This issue remains open for debate, although it is not certain
144 Vilfredo Pareto

that Boyer’s account is as original may seem at first glance. Nonetheless, Boyer
at least provides us with a more precise and developed discussion of the already
common idea that religious ideas are concerned with “supernature” (supernatural
entities); that is, they deal with a kind of causality different from natural causality
(Evans-Pritchard, 1937, 1965).
Although Pareto does not say anything as explicit on the supernatural, he does
take note of the fact that when people refer to God or to other supernatural entities
such as Poseidon, they do not renounce their more rational beliefs according to
scientific criteria. Thus, sailors continue to repair their ships even if they use
protective magic also. All empirical anthropologists, from Malinowski (1922)
to Evans-Pritchard (1937), have written about the same phenomenon. Evans-
Pritchard wrote, with language very similar to Lévy-Bruhl’s (1910), that many
people believe that there are two kinds of causality, natural and supernatural, and
that they do not conflict. The latter merely complements the former. If Pareto
would have elaborated a little more on that point, he would probably have said
that supernatural explanations are complex and various derivations, while natural
explanations are simple and more or less universal explanations. Evans-Pritchard
(1965) mentioned that Pareto’s and Lévy-Bruhl’s intuitions were very similar but
that Pareto thought that supernatural or magical explanations can be found even in
occidental and allegedly rationalist countries.

A Sociological Theory of Beliefs as Consequences of Invalid yet Convincing

Logical Deductions

The previous section turned our attention to the theory of collective beliefs
outlined in the Trattato, and focused on comparisons between various deductive
justifications. In this model, the logical validity of these deductions is not under
discussion. Pareto compares the different contents of logical premises that
nonetheless lead to the same conclusions, or he compares premises whose core
contents are identical, but which differ greatly in their degree of complexity, and
yet lead to the same conclusions. The greatest part of chapter X of the Trattato
(§1543–686), however, is devoted to the examination of the numerous invalid
logical deductions that one may encounter in the examination of justifications of
collective beliefs. This new investigation can give birth to a still slightly different
(middle-range) theory of beliefs. I claim that this theory is the most original part of
Pareto’s general theory of collective beliefs. And I argue that this theory becomes
stronger still if one introduces Mill’s psychological views, which are more refined.
Those views are now being rediscovered by contemporary experimental cognitive
psychologists, although they remain neglected by sociologists. I will set forth
these ideas in the next two sections.
Pareto devotes hundreds of pages to what he calls “verbal derivations” (or
“verbal proofs”), which are justifications of beliefs comprising logically invalid
deductions (§1543–686). To be more precise, not only does Pareto speak of
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 145

justifications that are logically invalid, he also speaks of justifications that are
logically valid but are based on empirically false premises. Of this latter kind is
the belief that Poseidon exists; that he plays a (supernatural) role in the genesis of
storms; that he is sensitive to human prayers and rituals; and, consequently, that
it is wise to pray to Poseidon and perform relevant rituals before departing on a
sea-going voyage. Mill also makes this distinction in his System of Logic, in the
book entitled “On Fallacies” (Book V). Malinowski and Evans Pritchard – and
even Levy-Bruhl – cite examples very similar to Pareto’s. But Pareto is the only
one of the four who focuses on logically invalid justifications. He is also the only
one to be in line with Mill (§1410–12), following Hume. I argue that Pareto’s
most original idea is that most beliefs are irrational in a very specific sense, that of
logical invalidity. This account of beliefs differs even from Lévy-Bruhl’s account
of primitive collective ideas as “pre-logic” since “pre-logic” in Lévy-Bruhl’s
thought does not mean “not logic.” It merely means that the premises of (valid)
deductions include some kind of reference to supernatural entities and properties.
Many contemporary psychologists since Tversky, Kahneman and Slovic (1980),
and Nisbett and Ross (1980), have focused attention on the very numerous logical
mistakes that everyone – even logicians or statisticians – commits in everyday life,
sometimes with serious consequences. For example, a physician might incorrectly
interpret medical tests and then misdiagnose a patient as suffering from AIDS or
another very serious illness. Further investigations have shown that these common
mistakes are far less frequent than first experimentalists believed. Many of them
appear only within experimental contexts, so that many of the alleged logical
mistakes can be taken as experimental biases (Gigerenzer, 2000). Nonetheless,
many mistakes remain. In any case, all treatises of logic from Aristotle to John
Stuart Mill include some examination of logical mistakes, which provides yet
further proof that they are significant. Indeed, Gigerenzer explained the existence
of logical fallacies rationally by showing that the most frequent logical fallacies
are merely by-products of heuristics that were the most valuable in the dangerous
environments where our ancestors lived (because they produced faster results than
could be obtained through more careful reasoning). Nonetheless, this does not
change the fact that the mind produces such mistakes.
Pareto does not use the “principle of charity” in Davidson’s sense (Davidson,
1982), which enjoins the social scientist to suppose, a priori, that even if a belief
or an action seems strange, the believer or the actor may have had good reason to
believe or act as he did. In consequence, Pareto often commits biases comparable
to laboratory biases encountered by psychologists. On many occasions, for
example, when Pareto investigates the reasoning of classical philosophers like
Plato, Rousseau, Kant, and Hegel, one can easily claim that the supposedly
invalid reasoning diagnosed by Pareto is actually valid in almost every case if one
interprets the phrasing correctly (§1507, §1514–22, §1556, §1682). Nevertheless,
certain kinds of reasoning still involve logical mistakes, at least if one uses the
principle of charity only as a heuristic rule of interpretation and not as a rationalist
dogma. In fact, Pareto is fully aware that it is often easy to transform defective
146 Vilfredo Pareto

reasoning into correct reasoning by introducing new premises, stating that they
were implicit (§1405–9), or by restricting the scope of another premise (§1558),
or by changing the meaning of a term (§1556–613), and so on. Of course, Pareto
is right to argue that these devices may be used insincerely, and that the defective
reasoner simply did not want to admit their error. But we must consider each
case individually. In any case, Pareto’s attempt to investigate the role of the most
frequent fallacies in societies is an original and relevant research program (§1411).
Among the numerous historical examples of fallacies that he analyses, Pareto
investigates at length the fallacies of composition and division (also termed “fallacy
of distribution” or “fallacy of apportionment”) (§1495–6). And yet Pareto is often
more inclined to give brief sketches of these many examples than to analyze some
of them carefully or show their historical significance. Albert Hirschman (1977),
on the contrary, has brilliantly shown how frequently these fallacies have been
used both to justify and refute capitalism. I have personally tried to show that one
particular kind of fallacy (that went unnoticed by Pareto), a fallacy, that since the
Stoics, has been called “the lazy argument,” appears in very different contexts,
from common interpretations of Calvinism to common interpretations of Marxism
(Bouvier, 1999b).
I argue that this specific micro-model, or “middle-range theory” in Pareto’s
sociology of beliefs, has seldom been recognized because it has often been
confused with the dissimulationist theory of beliefs, which is yet another middle-
range theory (see above). A dissimulationist theory can still be discerned here,
in a sense, but what remains hidden are not feelings or instincts but rather
metaphysical, physical or normative principles. Furthermore, what covers over
these principles are not other feelings or instincts but logico-linguistic tricks. This
is a significant difference because these kinds of dissimulations are independent.
In particular, certain justifications (e.g. invoking solidarity), may dissimulate
genuine motivations (e.g. self-interest), without using logically invalid reasoning
and linguistic tricks (“Send money to Haitians so they may survive after the
earthquake” can be justified - and logically deduced – from the general principle
“Stand in solidarity with others,” although this principle may dissimulate the
genuine principle: “Be recognized as generous if you want to become a political
leader”). Other justifications dissimulate genuine motivations by using logico-
linguistic fallacies (e.g. using the word “solidarity” in different senses, §1557, or
the fallacy of division, §1497); they are twice misleading.

A Return to the Casualist and Rationalist Theory of Beliefs, and to its

Communicative Dimension

These two last theories of beliefs open the way for further interrogations into the
nature of Pareto’s general viewpoint. Indeed, Pareto gives us an explanation of
the logical mistake that is in accordance with the first theory we have explained,
that is, the instinctualist or emotivist theory. References to contemporary debates
 Pareto, Mill and the Cognitive Explanation of Collective Beliefs 147

can also help us here. Nisbett and Ross (1980) wonder about the origins of logical
mistakes, but take for granted that such mistakes exist and that they are not
created only by methodological biases. For pedagogical reasons, they argue that
in this respect there are two kinds of theories: “hot” and “cold.” Advocates of hot
theories contend that logical mistakes are caused by emotions: it is when people
are stressed or tired, for example, that they commit logical mistakes. Proponents
of cold theories argue that logical mistakes are caused by cognitive biases, namely
strong cognitive tendencies, such as heuristics that permit people to think by
following ways that are particularly rapid and generally right, but which can be
misleading in certain specific cases. Pareto explicitly supports a hot theory on
these matters. When he sets forth his view on this issue, he refers to Mill, but
strangely he attributes a view to Mill that is obviously not Mill’s own (§1410;
§1412), showing that he read Mill very quickly (Bouvier, 1995, 1997). This is a
pity, because Mill’s view is much more elaborated than Pareto’s. It may perhaps
even accord more with the great variety of models provided by Pareto. In reality,
Mill’s psychological account of logical mistakes is a mixed theory. Mill argues
that, on the one hand, emotional causes and, on the other hand, intellectual or
cognitive causes, have to be connected: emotions may play a role, but emotions
cannot produce logical mistakes if a kind of autonomous cognitive weakness does
not already exist (Mill, 1963, Book V, Chapter 1, §3). Psychology, then, should
investigate both kinds of cause.
A consequence of this kind of analysis, which I will take as well-founded
without seeking to prove it here (see Bouvier, 1992, 1995), is that justifications of
beliefs, whether true or false – false for logical or empirical reasons – must have
an effective role in the perseveration or transformation of collective beliefs. In
such a way, the communicative theory of beliefs (see above) is enriched by a more
complete causalist theory, in which reasons, even false ones, play a role.

The Limits of Pareto’s Account of Collective Beliefs

To conclude, I will point out only two limitations to Pareto’s theory – or rather
theories, since Pareto’s account of collective belief is not systematic and he
provides only micro-models or “middle-range theories” in Robert Merton’s sense.
First, although Pareto takes argumentation into account, he investigates
fallacies almost exclusively. What is worse, when he encounters argumentative
procedures such as analogies, he views them only as tricks, even though they
could play a positive pedagogical role in the explanation of new ideas (without
speaking of their heuristic role, which historians of science such as Mary Hesse
(1966) have proved). The same could be said of other procedures such as that
which Bakhtin (1984) terms polyphony, which Pareto notices in interpretations
of the Song of Songs in the Bible (“St Jerome … assumes without trace of proof
that the author is not speaking of himself when he recommends conviviality at
table,” (§1629)). Perelman’s Treatise on argumentation (Perelman and Olbrecht-
148 Vilfredo Pareto

Tyteca, 1958) enriched by more contemporary investigations, would be a better

guidebook than Pareto’s Trattato for the analysis of argumentation procedures
because it is less repetitive and more systematic. Furthermore, better examples
of applications to historically significant ideas can be found elsewhere than
in Pareto’s writings. Hirschman (1977) has shown, in a famous book which
I have already mentioned, that logically valid arguments played a role in the
transformation of prominent collective feelings or instincts in the seventeenth
and eighteenth centuries, leading young men to seek their self-interest rather than
glory and honor.
Secondly, and more importantly, Pareto provides a very narrow analysis
of collective beliefs as collective. Collective beliefs in the Trattato are merely
widespread beliefs – that is, beliefs that many individuals objectively hold in
common. But Pareto does not elucidate the process by which certain beliefs are
viewed by people as constitutive of their community. Nor does he investigate
the various processes through which people may feel socially forced to publicly
accept certain ideas they do not personally accept. Both Tocqueville and Durkheim
have deepened our understanding of collective beliefs from these viewpoints. An
examination of their ideas is outside the scope of the present chapter. Returning
to works introduced at the beginning of this chapter, I want to assert that both
Margaret Gilbert and Jon Elster have provided illuminating analyses of collective
beliefs based either on Durkheim (and the notion of “joint commitment”) (Gilbert,
1989) or on Tocqueville (and the notion of “pluralistic ignorance”) (Elster, 2007).
To conclude, I claim that Pareto’s sociology of collective beliefs contains
numerous outlines of heuristic micro-models or “middle-range” theories of
collective beliefs whose heuristic significance has been underestimated. Generally
speaking, scholars have emphasized the irrationalist, instinctualist and emotivist
dimensions of Pareto’s account. A re-reading of the Trattato in line with Mill’s
System of Logic enhances its quite underestimated cognitive dimensions. However
we still remain far from developing an overarching theory of collective beliefs, not
only because Pareto’s views are too narrow, but also because his various micro-
models are not combined in a systematic theory. Above all, in order to speak
of middle-range theories in Merton’s proper sense, this examination should be
complemented by case studies. But this task is beyond the scope of this chapter.

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 Chapter 8
Pareto’s Rhetoric
Giorgio Baruchello

Introduction

Given the absence of previous literature on Pareto’s treatment of rhetoric, at least

as far as the Anglophone world is concerned,1 it is the aim of this chapter to offer
one. By recovering Pareto’s treatment of rhetoric in the mare magnum of words
and thoughts contained in his 1916 Trattato di Sociologia generale, I hope to
contribute something novel and interesting to contemporary Pareto studies.
Moreover, my endeavour should appeal to scholars in rhetoric and communication
studies at large, for it contains a Paretian elucidation of rhetoric and of the psycho-
social forces allowing for persuasive communication.2
In the following pages, I shall provide a brief account of rhetoric’s two
paradigmatic Western interpretations and assessments, i.e. Plato’s and Aristotle’s.
Then, I shall outline Pareto’s interpretation and assessment of rhetoric. Specifically,
after presenting his dismissal of rhetoric as commonly practiced in speech and
writing, I shall dwell on Pareto’s more complex discussion of rhetorical reasoning
qua derivation and non-logical action. Although Pareto’s understanding of rhetoric
is prima facie analogous to Plato’s and remains as suspicious concerning rhetoric’s
aims, I shall argue that it also contains some Aristotelian elements, of which Pareto
himself might have been unaware.3 Lastly, I shall comment on the persistence

1  The most thorough analysis of Pareto’s understanding of linguistic communication

has been put forward in Italian by Francesco Aqueci (1991). Insightful remarks have
been formulated also in French by Alban Bouvier (1993, 1999), who interprets Pareto’s
derivations as rhetorical commonplaces serving social utility. As regards Aqueci (1991),
this book does not tackle rhetoric per se, yet it sheds light on rhetorical notions such as
the emotional appeal of reasoning (§5.1.2), the argumentative effectiveness of moral
injunctions and other logico-experimentally unwarranted linguistic expressions (§§5.3
and 5.5), and the ideal orator (§6.5). Do notice that Aqueci (1991) is carefully divided in
chapters and paragraphs; hence I refer to these rather than to page numbers. I do the same
vis-à-vis Pareto (1935), Barthes (1988), whilst using the traditional referencing system for
Plato (1997) and Aristotle (1941).
2  Bouvier (2002) argues that the study of why certain arguments are persuasive and
others are not remains an underdeveloped area of investigation in the social sciences and
communication studies, especially as far as rational choice theory is concerned.
3  The main aim of this chapter is to ‘extract’ Pareto’s treatment of rhetoric from
his most famous work. Yet, from a rhetorical point of view, to do so by unveiling an
154 Vilfredo Pareto

of rhetorical elements within Pareto’s own work and the persisting relevance of
rhetoric for an adequate understanding of communication.

Two Contrasting Views of Rhetoric

Rhetoric suffers from a bad reputation; the origin of the word itself may explain
why. Although rhēsis [‘saying’ or ‘speech’] can be retrieved in the writings of
Homer and Herodotus, and rhētōr [‘orator’] in Euripides’, rhētorikē [‘rhetoric’
proper] as such appears for the first time in Plato’s Gorgias. In this dialogue,
‘rhetoric’ designates the sophistic technē [‘art’ or ‘technique’] for seducing gullible
audiences and winning arguments at all costs, i.e. without any consideration
for what is actually true and good. According to Plato, rhetoric stands in stark
opposition to philosophy, just like the much-admired Gorgias stood in stark
opposition to the widely resented Socrates, whose quest for truth and goodness in
the democratic city-state of Athens had ended in tragedy.
For Plato (1997: 465b–c), rhetoric sides with murky common opinion and with
fickle popular acclaim, whilst philosophy sides bravely with the unchanging light
of pure knowledge and steadfast virtue, at which only the select few can gaze
veritably. Compared to philosophy, rhetoric’s powers are shallow, misguided and
overestimated. They resemble those of cuisine and fashion in comparison with those
of medicine and gymnastics. The former disciplines may produce the semblance
of wellbeing, sometimes more convincingly than the latter. Nevertheless, it is
solely medicine and gymnastics that can truly confer wellbeing.4
As widespread and influential as Plato’s negative assessment of rhetoric may
have been up to our times, none less than Aristotle came to the rescue of this art,
soon after Plato’s judgment had been passed. Aristotle was far less dismissive
of common opinion than Plato and he could not seriously entertain the notion
that a discipline as successful and as widely cultivated as rhetoric was devoid
of important elements of truthfulness and goodness. Thus, Aristotle’s vast
corpus of scholarly and scientific studies includes a lengthy treatise devoted
to rhetoric, probably the first one in history, in which he presents not only a
detailed account of the art of rhetoric itself, but also a fundamental pedagogical
justification for it.
According to Aristotle (1941), rhetoric is necessary first and foremost to teach
the uneducated and persuade the uneducable: ‘[B]efore some audiences not even
the possession of the exactest knowledge will make it easy for what we say to
produce conviction’ (I, 1, 1355a, 25). Few are able to acquire the complex wisdom

unexpected Aristotelian flavour should let this chapter be more intriguing, hence more
likely to persuade.
4  Whidden (2005) observes how Socrates, in Plato’s Gorgias, despite his higher
knowledge and moral ground, eventually fails to persuade his third and last interlocutor,
Callicles.
 Pareto’s Rhetoric 155

of the philosopher – Plato and Aristotle agree on the elitist character of higher
knowledge – but even those who are able to do so must be first introduced to it
gradually and by means of simpler, ordinary intellectual references. To this end,
rhetoric is regularly employed, for it alone can address and guide the emotion so
that it may cooperate, rather than interfere, with reason. Therefore, rhetoric cannot
be dismissed as inherently bad.

A First View of Rhetoric by Pareto

Pareto’s (1935) declared aims are descriptive, not normative: he is ‘looking

strictly for what is’ and not for ‘what must or ought to be’ (§28). Nominally at
least, Pareto differs from both Plato and Aristotle, whose aim was to improve
the human condition, not just to describe it. In actual fact, Pareto even claims
that Aristotle’s big mistake was to abandon sheer empirical research, which he
had pioneered laudably, in preference to ‘the mania for achieving some practical
result’ (§275 note 1).5
This difference in aims notwithstanding, Pareto would seem to favour
straightforwardly Plato’s view of rhetoric rather than Aristotle’s. Although he
is hardly ever sympathetic to the founder of philosophy, which Pareto regards
in essence as confused and unscientific gobbledygook,6 he nevertheless agrees
with Plato in rejecting rhetoric as an alleged source of knowledge. Pareto (1935)
straightforwardly and repeatedly equates rhetoric to demagogic sophistry, hollow
formalism, bombastic wordiness and preposterous verbiage:

• ‘But rhetoricians, sophists, and casuists have their uses, because they bake
a bread that is suited to the teeth of the mass of people in a population’
(§1922 note 8).
• ‘The gods of Homer, with whom Plato picks his quarrel, were alive in the
minds of millions upon millions of human beings. The god of Plato was
never alive, and he has remained a rhetorical exercise on the part of a few
dreamers’ (§2349).
• ‘Of the aggressive anti-German platforms of candidates running for the
French National Assembly, Bismarck said: “Too much rhetoric! … They
remind me of Jules Favre. On two or three occasions he tried that grand
language on me. But it did not last long. I always brought him down to
earth with a jesting remark”’ (§2463 note 1).
• ‘The description that Sallust gives of it in his Bellum Catilinae, is so
ridiculously rhetorical as hardly to pass as a cheap melodrama’ (§2573).

5  By and large, Pareto (1935) manifests a preference for ‘Aristotle, the naturalist’
who ‘gets closer to realities… than does Plato, the metaphysicist’ (§2553 II–γ).
6  ‘The main thing in metaphysical theories’ being ‘sentiments … not the arguments’
(Pareto 1935: §598).
156 Vilfredo Pareto

Revealingly, Augustine’s apostolate and its rhetorical ‘antitheses … double

meanings … and other cavillings’, which generations of literary experts have
admired, are dubbed ‘wretched and inept’ (§1576). Pareto’s stance could not be
any more adamant.
If truth be told, the very focus upon persuasion that characterises rhetoric
causes Pareto to doubt its value, inasmuch as amongst the ‘excellent methods of
persuasion’ that he lists in his work are included sarcastically to ‘roast’ opponents
‘at the stake’ and ‘vilify’ them, as done by Calvin with ‘poor Servetus’ – the
‘logico-experimental value’ of such methods being ‘exactly zero’ (§625).
Pareto’s negative evaluation of rhetoric reverberates also in his article on ‘The
New Theories of Economics’ (1897). In it, Pareto states that rhetoric pertains to
the domain of art, not to the domain of science. And for Pareto, art’s defining aim
is persuasion, not seeking the truth, which instead science alone pursues via its
logico-experimental method:

As a matter of fact, art has always preceded science. When in the course of the
evolution of human knowledge art and science have drifted apart, critics have
never been wanting who were ready to assert that science was productive of
no useful results. Criticisms of this kind are largely founded on the fact that a
science has not nearly so immediate a utility as the cognate art. It is also to be said
that art cannot confine itself to its teaching function; it must also demonstrate its
persuasive power. Consequently art is obliged to make use of certain rhetorical
devices with which science has nothing to do … Science considers means of
expression solely from the point of view of their power to disclose the truth,
whereas art must primarily consider their efficiency as means of persuasion.
From this it follows that economic science will not hesitate to use mathematics,
philology, physiology, etc.; whereas art can draw upon these sciences to but a
very limited extent for fear of not being understood by the majority of those it
undertakes to persuade (§485).

By ‘logico-experimental’ Pareto means, in essence, internal consistency plus

experience- and observation-based hypotheses that are tested empirically. Pareto is
a radical empiricist, to the point of stating: ‘From our point of view not even logic
supplies necessary inferences, except when such inferences are mere tautologies.
Logic derives its efficacy from experience and from nothing else’ (Pareto 1935:
§29). It is then somewhat ironic that such an emphasis on experience, which is
logically always controvertible, turns scientific reasoning into reasoning upon
the probable i.e. that which Aristotle described as rhetorical reasoning. In any
case, for Pareto, reason stands clearly on one side, whereas on the other side
stands unreason: ‘Passions, accords of sentiment, vagueness of terms, are of great
efficacy in everything that is not logico-experimental’ (§42). Mutatis mutandis and
despite the overall positivistic spirit of Pareto’s thought, his distinction between
art and science mirrors the stark opposition between rhetoric and philosophy that
characterises Plato’s Gorgias.
 Pareto’s Rhetoric 157

Only on infrequent, marginal occasions does The Mind and Society depict, or
refer to, rhetoric more neutrally, i.e. as a body of technical notions and a source of
linguistic insight:

Grammar answers the general questions. Morphology yields the elements of

language – substantives, adjectives, verbs, and so on. Syntax shows how they
are combined … Grammatical analysis yields the elements (substantives, verbs,
and the like); logical analysis shows how they are combined and the significance
they acquire through the combination … [R]hetoric deals with the passage more
especially under its subjective aspect (§468).

Similarly, in citing Father Marie-Joseph Lagrange, Pareto employs the rhetorician’s

jargon: ‘Because people speak, abusively – the figure is called catachresis in
rhetoric – of a “religion of honour,” that definition has to be accounted for in the
definition of religion in general!’ (§384; emphasis mine).
Further rhetorical figures or tropes are mentioned by Pareto, such as ‘proverbs’
(§1476), ‘personifications’ (§1458, II–γ) and ‘[m]etaphors, allegories, analogies’
qua ‘indefinite terms’ that may be useful ‘as a way of getting from the known
to the unknown’, but not ‘as demonstration’ based upon logical inference and
repeated empirical observation (§1614). Still, even in this connection, Pareto
cannot refrain from passing negative comments about such tropes, which he
describes as instruments ‘to swindle many ignorant people’ since ‘one would have
to be an idiot indeed not to find a way to infer anything one chose from such
pronouncements’ (§1610).
Also, according to Pareto, rhetoric is not a crucial human activity, at least vis-
à-vis the pressing demands of everyday life:

Rhetorical and philosophical divagations are largely a luxury, and practical

life demands something else. People want to know how they should conduct
themselves in order to achieve ‘happiness’ in the ordinary sense of the word as
material well-being (§1930).

A Brief Overview of Pareto’s Key-terms

Additional, more articulate considerations pertaining to rhetoric are contained

in the initial paragraphs of chapter IX of The Mind and Society. This chapter
introduces Pareto’s theory of derivations and supplies a transition from the second
volume, which is entitled ‘Analysis of Sentiment’ and is devoted to the presentation
of his theory of residues.
‘Residue’ and ‘derivation’ are terms that Pareto coined afresh and as
conspicuously artificial as possible. His intentions were praiseworthy, for he wished
to prevent established habits of thought from reducing the theories presented in his
treatise to some other, previous, possibly erroneous conception. Nonetheless, in
158 Vilfredo Pareto

so doing, Pareto opened the door to different readings of his new terminology
and to a heap of thorny hermeneutical issues (cf. Femia 2006: 36). Henceforth,
before tackling Pareto’s more explicit considerations on rhetoric in ‘Sentiment in
Thinking’, it may be advisable to explain briefly what is meant by ‘residues’ and
‘derivations’ in the present book chapter and how they relate to the fundamental
Paretian issue of the non-logicality of a hefty proportion of human agency.

Residues

Residues are what we can conceive of human behaviour, as this is revealed in

linguistic usages, when all contingent circumstances are taken away. Termed as
Pareto does, they ‘correspond to certain instincts in human beings, and for that
reason they are usually wanting in definiteness, in exact delimitation’ (Pareto
1935: §870). Therefore, ‘residues’ convey unchanging, universal ‘instincts and
sentiments’ (§888) that are likely to have fuelled human behaviour in all ages and
civilisations, individually as well as collectively – hence my references to ‘psycho-
sociology’ in the title of this chapter. ‘Great social currents’ may ‘often produce
general changes’ in religions, philosophies, political theories, morals, yet ‘leaving
residues unaffected’ (§2007). Together with ‘appetites, tastes, inclinations, and …
interests’ these unchanging instincts and sentiments form the basic set of psychic
forces determining any ‘social equilibrium’ (§§887–8).
Residues can underlie logical behaviour, i.e. behaviour of which a satisfactory
assessment can be given by the objective logico-experimental method. However,
Pareto focuses upon their role with respect to non-logical behaviour, i.e.
behaviour which escapes or contradicts the objective logico-experimental method.
Distinctively, The Mind and Society reviews six main classes of residues: ‘instinct
for combinations’, ‘group-persistence’, ‘need of expressing sentiments by external
acts’, ‘residues connected with society’, ‘integrity of the individual and his
appurtenances’ and ‘the sex residue’ (§§889–1396).
For the sake of brevity and reader-friendliness, Pareto treats ‘residues’ and
‘sentiments’ as equivalent ‘convenient makeshifts’ (§1690), albeit as a competent,
self-aware man of science, he emphasises the abstract, functional, symbolic
character of the terms that he uses. There is nothing deeper, eternal or dogmatic
about them: they ‘are the products of logical activity on the part of scholars’
(§883).7

7  Pareto (1935) was always cautious vis-à-vis making any claim of actual knowledge;
after all, ‘all human knowledge is subjective’ (§149). We may stipulate a distinction, as
Pareto himself does for explanatory reasons, between ‘subjective’ and ‘objective’, which is
warranted ‘in view of the greater or lesser fund of factual knowledge that we ourselves have’
(§149). Nevertheless, all that we know is ultimately what we individually claim to know
at a given point in time, due to the many experiences and careful observations tested until
then, all of which are logically revisable, including those established in the most glorious
realms of ‘logical actions’ i.e. ‘arts and sciences … political economy … military, political,
legal, and similar activities’ (§§151–2). Prudently, when presenting his most innovative
 Pareto’s Rhetoric 159

Derivations

Derivations are the contingent, non-logical expression of residues in language:

‘Where there is no explaining, there is no derivation’ (§1400). Together, residues
and derivations explain why we are motivated to act, why and which reasons we
provide most commonly for our actions, and how these reasons have typically very
little to do with the actual motives of our actions. Most human beings, most of the
time, act straightforwardly upon their residues or sentiments (and tastes, interests,
etc.),8 i.e. the underlying field of psychic forces to which we refer abstractly
as ‘residues’ or ‘sentiments’ (§1690). However, the same human beings like to
think that they have good reasons for doing what they do. ‘The usual purpose of
a derivation’, Pareto writes, ‘is to satisfy with pseudo-logic the need of logic, of
thinking, that the human being feels’ (§975). Therefore, human beings shall seek
post factum linguistically expressible rationalisations of their behaviour.
Derivations vary in type, complexity (e.g. derivations may combine together
in complex non-logical theories or ‘derivatives’; §868) and they vary with
each individual’s intellectual abilities, social setting and historical conditions.
Specifically, Pareto reviews four main classes of derivations: ‘assertion’,
‘authority’, ‘accords with sentiments or principles’ and ‘verbal proofs’ (§§1420–
686). These are accompanied and made physically possible by non-linguistic
corporeal activities or ‘manifestations’.9

Non-logical Conduct

As a trained economist, Pareto grew disillusioned with the inability of economics

to predict human behaviour, which regularly falls short of the self-interested

sociological accomplishment, i.e. his theories of residues and derivations, Pareto suggests
that the origin of residues can be hypothesised rather than ascertained, since only social
phenomena ‘observable today’ are available to the social scientist, plus mere ‘traces … in
documents of the past’ (§887).
8  Scholars disagree on the extent to which sentiments and instincts can be distinguished
from appetites, tastes, inclinations and interests, and all of these from one another (e.g. Pareto
1966: 41–4). Given what Pareto (1935: §870) asserts about the fuzzy character of human
instincts, I believe such disagreements to be impossible to resolve. Still, it must be noticed that
he does treat interests as noteworthy (e.g. §1207) insofar as they lead often to logical action
and play a crucial role in determining the social equilibrium by inspiring economic activities.
9  The physical activities underpinning linguistic communication (e.g. the bodily
articulation of sound, utterances) and accompanying it (e.g. gazing, smiling, blushing,
heart-throbbing) are dubbed ‘manifestations’ in an example discussed by Pareto (1964)
in a letter to G.H. Bousquet (vol. XIX, 1092). Pareto (1935) treats ‘manifestation’ as
meaning either ‘derivative’ (§§868, 1688, 1826, 1830) or the end that certain derivations
pursue, as distinguished from the actual derivations (§§1413–4, 1688, 1832, 1877). The
interpretation offered in his 23 August 1922 letter is successive to Pareto’s 1916 Trattato
and is conceptually easier to accommodate within Pareto’s overall understanding of social
phenomena, hence I opt for it.
160 Vilfredo Pareto

rationality assumed by the heirs of Adam Smith (Aspers, 2001). Pareto’s Mind
and Society aimed precisely at casting light upon the vast universe of ‘non-
logical’ behaviour (§150). According to Pareto, there exist several forms of
human agency that either contradict or elude the logico-experimental method
and that can be properly understood if and only if close attention is paid to
the species-defining emotional magma seething under the familiar veneer of
linguistic rationalisations.
Pareto reviews the following main types of non-logical behaviour: purely
habitual or instinctive behaviour (e.g. faithful adherence to Hesiod’s obscure
precept ‘not to befoul rivers at their mouth’; §154); conduct that is meaningful
subjectively but not objectively (e.g. ‘sacrifices to Poseidon’ to secure ‘a
favourable voyage’; §149); activities that are objectively consistent and
purposeful, yet performed subjectively without any awareness of the actual
reasons (e.g. faithful adherence to Hesiod’s contagion-reducing precept ‘not
to befoul drinking water’; §154); activities that are objectively consistent
and purposeful, yet performed subjectively on account of different reasons,
whether the results are subjectively acceptable (e.g. the ancient gods-fearing
augur forestalling ‘some decision … harmful to the Roman People’ because
of negative omens; §160) or unacceptable (e.g. profit-reducing price-lowering
due to intended profit-maximising ‘wage-cutting’ by capitalists ‘working under
conditions of free competition’; §159).
Pareto believes the first and third type of actions to be fairly widespread
amongst ‘savages and primitive peoples’, whilst more advanced peoples are bound
to transform these actions into tokens of the second and fourth type, as ‘travellers
are bent on learning at all costs the reasons for the conduct they observe’ (§154).

A Second View of Rhetoric by Pareto

It may sound bewildering that the alleged reasons for human action may have so thin
a connection with the actual motives of the same. Indeed, Pareto wonders himself:
‘how can the many men of genius who have dealt practically and theoretically
with human societies have failed to notice the fact?’ (§1404). Less bewildering
is the answer that he gives to his own question: ‘the role played by sentiment has
in fact been often perceived; but indistinctly, so that it has never been given a
complete theory and its importance has never been accurately evaluated’ (§1404).
It is not that human beings have been completely blind to the power of emotion
over their own minds and to the infelicity of the many apparent reasons that are
routinely utilised in order to justify our actions. Rather, according to Pareto, none
before him has ever undertaken as thorough, comprehensive and scientific a study
of these phenomena as the one embodied by The Mind and Society.
Concerning an ancient attempt, Pareto recalls Aristotle’s discussion of the
rhetorical syllogism or ‘enthymeme’ i.e. ‘a judgment that is combined with a
statement of its reason’ or, in the language of ‘modern logicians … a syllogism
 Pareto’s Rhetoric 161

in which one of the premises is not stated’ (§1405). In other words, rhetorical
syllogisms are abbreviated arguments.10
Both Aristotle and Pareto acknowledge that any items of communication
that were so carefully crafted as to contain each and every logical step from
the premises to the conclusion would be very hard to bear. If one wishes to be
persuasive, as Pareto concedes, one must avoid being ‘cumbersome, tedious,
unreadable’ (§1406).
Moreover, this being the point about which Pareto cares most, the rhetorical
abbreviation of syllogisms allows the speaker to hide whichever premises may
be logically fallacious or unconvincing. Since the syllogistic form is meant to
make the elements of an argument most explicit, persuasiveness is bound to be lost
whenever there are within it logically erroneous or dubious terms and/or premises.
On the contrary, in an enthymeme, ‘things may be so arranged that the proposition
not stated is the one where the logical weakness is most apparent’ (§1406).
Emblematically, Pareto cites an Aristotelian enthymeme that reads as follows:
‘Nourish not, being mortal, immortal wrath’ (§1407). Nothing could seem more
obvious and persuasive. Yet, were we to reconstruct it as a proper logical syllogism,
then it would read: ‘Man is mortal. A mortal cannot nourish immortal wrath.
Therefore a man cannot nourish immortal wrath’ (§1408). Thus presented, though,
the syllogism would fail to convey the actual meaning of the original statement. In
it, according to Pareto, ‘immortal’ is used equivocally to mean ‘for too long a time’
as opposed to the actual opposite of mortal. Despite that, ‘immortal’ is preferred to
the correct expression ‘for too long a time’ because of the contrast that it generates
vis-à-vis ‘mortal’ (§§1407–8). If we wished to disambiguate the terms utilised,
then the logically accurate rendition of the syllogism at issue would be: ‘Man is
mortal. A mortal must not nourish wrath for too long a time. Therefore man must
not nourish wrath for too long a time’ (§1408). However, this rendition would
reveal the weak spot of the whole reasoning, i.e. the unsubstantiated premise
that a mortal must not nourish wrath for too long a time. Instead, this premise is
suppressed in the enthymeme. The enthymeme, rather than a succinct syllogism,
becomes a sheer assertion, i.e. a derivation. According to Pareto, assertions
possess the colourings of logical thinking, but in fact rely upon residues for their
persuasiveness. Insofar as ‘the assertion … subsist of itself by virtue of a certain
inherent persuasiveness independent of experience … it is a derivation’ (§1421).11
As for the residues at play in the enthymeme “vivisected” above, Pareto
observes, in the first place, the intentionally misleading ‘linking of names and
things’ (§1407), which regularly ‘suggest certain experimental, or even imaginary,

10  Pareto (1935) does not address one important aspect that Aristotle (1941) highlights
in connection with rhetorical arguments, i.e. that they start from probable premises upon
which the audience is likely to agree, rather than from apodictically true scientific premises
(cf. note 10).
11  In Pareto’s (1935) classification of derivations, assertions constitute type number
one (§1420).
162 Vilfredo Pareto

property of things’ (§958). In the second place, an even more profoundly ingrained
residue is at work, namely an instinct of ‘sociality’ (§1407). To be exact, this
instinct is rooted in the ‘need of uniformity’ (§1115) that most human beings
commonly experience, as they desire to be ‘connected with society’ (§1113). That
is the ultimate source of persuasiveness of the Aristotelian enthymeme’s injunction
against those who do not forgive. This is an immensely powerful residue, given
that ‘[t]he larger and more effective portion of the residues prevalent in society
cannot be altogether unfavourable to its preservation; for if that were the case, the
society would break down and cease to exist’ (§1932).
The logically minded person might be tempted to believe that enthymemes are
acceptable because they are part of a larger syllogism. However, as the previous
example aims at revealing, it is not the case. According to Pareto, although
enthymemes may be reconstructed as syllogisms, their persuasiveness is not
due to their truncated yet persisting participation in a broader logical deduction.
Rather, their ‘persuasive force’ is due to ‘the sentiments that they arouse’ (§1409).
The Aristotelian enthymeme scrutinised by Pareto follows the general strategy
that he outlines in an earlier section of his work, in which he states:

[I]n a reasoning developing by accord of sentiments, the syllogism may be as

sound as sound can be; because, in reality and taking due account all along of the
indefiniteness of terms in ordinary language, if the sentiments aroused by [the
thing lying within the experimental domain] A accord with the sentiments aroused
by [another thing lying outside that domain] X, and the sentiments aroused by X
with the sentiments aroused by [the thing lying within the experimental domain]
B, it will follow that on the whole the sentiments aroused by A will accord with
the sentiments aroused by B (§480).

Hidden within the semblance of a logical piece of reasoning, there reside deep-
rooted sentiments determining human action. As they persuade pseudo-logically
the audience to behave in accordance with sentiments elicited by the skilled
rhetorician, enthymemes turn out to be splendid tokens of non-logical behaviour.
Furthermore, whichever fallacy may have been exploited by the rhetorician, this
does not have to be ‘a deceit, a trick, a logical action’ calculated to deceive, but
itself an action ‘without conscious design’ that leads to conjoin ‘sentiments together
over the path’ desired by the rhetorician (§636). What spurs the rhetorician to
concoct cunning items of pseudo-logical reasoning is typically as deep-seated and
invisible a sentimental drive as the one, or the several, deployed therein.

Oftentimes the person who would persuade others begins by persuading himself
… Unbelieving apostles are rare and ineffective, but ubiquitous and ubiquitously
effective is the apostle who believes (§854).

Even if Pareto’s opinion of rhetoric remains negative – as with the swift

‘Platonesque’ dismissal highlighted as his ‘first view’ – this ancient discipline
 Pareto’s Rhetoric 163

becomes something more than sheer obfuscation in Pareto’s ‘second view’, given
that rhetorical syllogisms seem capable of revealing outstanding examples of non-
logical behaviour at two different levels of analysis. Aristotelian enthymemes may
be something that Pareto does not like very much, yet they can still be useful to
articulate and explain Pareto’s own theory of residues and derivations.

The Unseen Aristotelian Character of Pareto’s Second View of Rhetoric

Undetected fallacies, shameless sophisms, heaps of rhetorical tropes and figures

inhabit the most esteemed treatises and scholarly endeavours. According to
Pareto, they seem to determine the appeal and popularity of such endeavours, as
‘the persuasive force’ of ‘literature, from simple fairy-stories all the way along to
the most complicated theological, ethical, metaphysical, “positivistic”, and like
disquisitions’ resides ‘in the residues and interests that they call into play’ (§1892).
The sociologist that Pareto wants to be and to beget should ‘not stop with
the reflection that a certain argument is inconclusive, idiotic, absurd, but ask
… whether it may not be expressing sentiments beneficial to society, and
expressing them in a manner calculated to persuade’ (§445). Whilst addressing
the Aristotelian enthymeme discussed in the previous section, Pareto expresses
his genuine conviction that the sociologist’s defining task is to explain why such a
flabbergasting amount of intellectual self-deception may be possible:

When the logician has discovered the error in a reasoning, when he can put his
finger on the fallacy in it, his work is done. But that is where the work of the
sociologist begins, for he must find out why the false argument is accepted,
why the sophistry persuades. Tricks of sophistry that are mere finesses in logic
are of little or no interest to him, for they elicit no very wide response among
men. But the fallacious, or for that matter the sound, theories that enjoy wide
acceptance are of the greatest concern to him. It is the province of logic to tell
why a reasoning is false. It is the business of sociology to explain its wide
acceptance (§1411).

Even if a full treatment of Aristotle’s position would exceed the boundaries of

the present chapter, a few summary reflections may suffice to highlight the points
of contact between ‘the hermit of Céligny’ – as Pareto was nicknamed during
the later years of his life – and the Stagirite. I shall start with the passage just
quoted (i.e. §1411), for it possesses an exquisitely Aristotelian colour, well beyond
Pareto’s own recognition.

Understanding the Sophist’s Success

Pareto argues that understanding the truth depends also on being able to understand
why that which is false can be mistaken so often and so widely for that which is
164 Vilfredo Pareto

true. Whether Pareto was aware of it or not, this was one of the aims of Aristotle
(1941), according to whom: ‘The true and the approximately true are apprehended
by the same faculty’ (I, 1, 1355a, 14–5). Emblematically, Aristotle distinguished
carefully between enthymemes that are actual abbreviated syllogisms and
enthymemes that are so only on the face of it (II, 24, 1400b–1402a). Similarly,
he distinguished between rhetoric and sophistry on moral grounds (I, 1, 1355b,
15–20). He was so concerned with keeping these two dimensions distinct, that he
devoted two distinct works to them, namely his Rhetoric (or Ars Rhetorica) and
the Sophistici Elenchi comprised in his Organon.12
The rhetorician envisioned by Aristotle (1941) ‘must be able to employ
persuasion, just as strict reasoning can be employed, on opposite sides of a
question, not in order that we may in practice employ it in both ways … but in
order that we may see clearly what the facts are, and that, if another man argues
unfairly, we on our part may be able to refute him’ (I, 1, 1355a, 30–34). It is only
by grasping the ways in which the sophist succeeds that the rhetorician can defeat
him. Certainly, Aristotle knew that rhetoric could easily degenerate into sophistry,
but ‘if it be objected that one who uses such power of speech unjustly might do
great harm’, it is also true that ‘[a] man can confer the greatest of benefits by a
right use of [it]’ (I, 1, 1355b, 4–9). In order to use the power of speech justly, and
to counter the sophist who may be using it unjustly, one must know how such a
power operates:

[I]t is absurd to hold that a man ought to be ashamed of being unable to defend
himself with his limbs, but not of being unable to defend himself with speech
and reason, when the use of rational speech is more distinctive of a human being
(I, 1, 1355b, 1–3).

Aristotle’s rhetorician is not a sophist and, as such, she should be able to unmask
the latter’s tricks and explain why they are successful, exactly like Pareto’s
sociologist.13

Using Art When Science Fails

Aristotle’s acceptance of rhetoric for pedagogical aims reverberates too in Pareto’s

(1935) acknowledgment of the elitist character of higher forms of knowledge:
‘As regards persuasion, [logico-experimental] proofs are convincing only to
minds trained to logico-experimental thinking’ (§42), i.e. a tiny fraction of the
world’s population. ‘If a person would persuade another on matters pertaining to

12 The Organon comprises Aristotle’s most important works on logic, language and
interpretation.
13  Richards (2008) calls rhetoric ‘the new critical idiom’ that can spot true and
apparent instances of reasoning because of its emphasis upon arguing both sides of a
question, as Aristotle himself instructed.
 Pareto’s Rhetoric 165

experimental science, he chiefly and, better yet, exclusively, states facts and logical
implications of facts’ (§76). In contrast, if the same person wishes to persuade
‘another on matters pertaining to … social science, [then] his chief appeal is to
sentiments, with a supplement of facts and logical inference of facts’ (§76).
Even in his own beloved field of scientific research about social phenomena,
Pareto obliquely concedes that any intelligent person, ‘if he were to disregard
sentiments, he would persuade very few and in all probability fail to get a hearing
at all’ (§76). As he writes: ‘In practical life’ one must be able and willing to
cope with the approximate’ and choose the imperfect language ‘that awakens
favourable sentiments’ rather than ‘unfavourable sentiments’ (§113). Therefore, the
rhetorically challenged social scientist would be in the same unfortunate position
as those ‘good souls’ who ‘have imagined that they could destroy Christianity by
proving the historical unreality of Jesus’. Shut within the gates of the scholarly
community, ‘they persuade people who are already persuaded’ (§1455).
As elitist as Aristotle himself, for whom the heights of philosophical reason
eluded most human beings and indeed the whole female half of humankind, Pareto
argues that ‘nearly all human beings are in the habit of thinking synthetically, and
find it hard to grasp, in fact are quite unable to grasp, a scientific analysis’ (§817).
Logically, it follows that other ways have to be found in order to convey scientific
and other sensible information to the less capable. Historically, such has been the
province of arts such as rhetoric. Pareto, indirectly, agrees: ‘the function of art’ is
to deal with phenomena ‘synthetically and must not separate the elements’, for
this, ‘moreover, is an effective method of persuasion’ (§817). In short, there would
appear to be ample room for rhetoric in the modern world, and legitimately so.

Understanding Human Sentiments

Anticipating Pareto’s concern for residues, Aristotle’s (1941) own understanding

of rhetoric is accompanied by a lengthy analysis of the emotions that should
complement any good rhetorical syllogism in order for it to be persuasive (most
of book II). Far from being elusive on this point, Aristotle presents what Roland
Barthes (1988) calls ‘a classificatory psychology’ (§B.1.29.) that illustrates what
human emotions are believed to be like and to what sort of characteristic stimuli
they respond. Love, anger, fear and many other passions are scrutinised with care.
Aristotle (1941) instructs speakers on how such stimuli are activated, for it is also
by affecting passions that their message can get across to their audience – and the
sophist’s too. To this, he also adds a discussion of the emotions that audiences
should project onto speakers or the character traits those speakers should lead the
audience to attribute to them (II, 1, 1378a, 6–19). These are the recommended
‘airs’ of wisdom (or objectivity), virtue (or frankness) and amiability. Successful
orators, or persons who attempt to address successfully a composite audience,
must seem capable of acknowledging different points of view, committed to their
own views, and somewhat approachable and pleasant.
166 Vilfredo Pareto

To sum up, Aristotle offers not solely a sophisticated discussion of how to

reason in order to be persuasive. He offers also a sophisticated discussion of the
emotional or, in a Paretian sense, of the eminently non-logical factors at play in
persuasive communication. Bearing this in mind, then Aristotle’s enthymemes
may be something more than apparent abbreviated syllogisms, which actually
rely upon residues alone for their persuasiveness. Aristotle’s enthymemes, being
directed to a composite audience, would seem to be so built as to appeal to the
logically minded person, who reconstructs them as proper syllogisms, as well as
to those persons who would not be able to grasp the logical proofs, in part or even
in toto. Why use solely one shiny yet often blunt javelin – reason – when jagged
stones – passions – and a multi-layered armour – character – can also lead to
victory?14

Using Rhetoric for the Good of Society

Despite his professions of sheer empiricism and neutrality, value-laden elements

persist in Pareto (1935), including his approach to rhetoric. What is more, some of
these elements are reminiscent of Aristotle’s concern with the common good that
the rhetorician’s skilful civic discourse ought to promote.15 Precisely, Pareto is
not content with determining only whether a given set of propositions ‘is a sound
reasoning or a sophistry’ (§1399). Nor is he pleased with merely assessing ‘the
relation of the derivation to experimental reality’ (§1399). A ‘third problem’ is left
on the table: ‘the question of their social utility’ (§1399).16
Pareto is quite open to the notion that by reiterating ‘something that was
already present in the mind of the searcher, and not infrequently in the opinions of
the community to which he belongs’, successful rhetoric ‘may frequently lead to
results that are socially beneficial’ (§§1893–5).17 After all, ‘[t]he masses at large

14  Bouvier (1999: 279) builds upon two short quotes in Pareto (1935) suggesting
that rational arguments may, marginally and rarely, persuade their recipients, on top of the
emotions that they stir (i.e. §§1397 and 1418). Perhaps Pareto would have not dissented
entirely from Aristotle, on such exceptional cases.
15  ‘For all advice to do things or not to do them is concerned with happiness and with
the things that make for or against it; whatever creates or increases happiness or some part
of happiness, we ought to do’ (Aristotle 1941: I, 5, 1360b, 10–12).
16  This is no small problem, insofar as Pareto ascribes to ‘social utilities’ the very
success of modern science or, as he dubs it, of those ‘[e]xperimental researches’ that, even
if capable of ‘shaking the foundations of the social order’ as dramatically as some daring
‘ethical researches’, have not been contrasted as fiercely ‘by public opinion … and …
public authority’ (§2002).
17  Pareto’s (1935) half-spoken notion of the good translates as life-enhancing
‘material well-being’ (§1930) and the continuation of society (e.g. §1206). Though partial,
under-theorised and cautiously underplayed not to contradict Pareto’s scepticism vis-à-vis
any strong notion of cardinal utility (cf. Bruni and Guala 2001), this is consistent with
Aristotle’s (1941) notion of happiness, which he variously defines (e.g. ‘prosperity …
 Pareto’s Rhetoric 167

pay little attention to the sources of their rules. They are satisfied so long as society
has rules that are accepted and obeyed’ and, in general, with whichever course
of action that ‘saves the country and preserves its freedom’ (§§1929–30).18 With
this, I am not claiming that Pareto argues his points primarily so as to produce
social utilities, but that he does so while also having social utilities in mind. His
main focus may be upon the objective study of the non-logical features of human
behaviour but, as already quoted, Pareto claims Servetus to be ‘poor’ when he was
burnt alive and Augustine’s preaching to be ‘wretched and inept’, whilst he writes
uneasily about the many ‘varieties of asceticism’ qua ‘perversions of the instinct
of sociality’, since ‘without that instinct human society could not exist’ (§1206).
Detached, observation-aimed value-neutrality may be commended by Pareto, but
it is not always his forte.

A Third View of Rhetoric, Within Pareto

Pareto agrees with Comte – a rare event indeed – upon the idea that the Stagirite
too, like all ancient thinkers, sought the ‘convenience … to be believed without
being pestered for proofs’ (§286, note 1). Yet, Pareto’s own monumental Treatise
would not pass the scrutiny of a social scientist looking for properly conducted
quantitative studies. Though vast and filled with explanatory diagrams, The
Mind and Society itself reads like a collection of noble opinions from the past,
not unlike Aristotle’s Ars Rhetorica.19 This is a criticism vented repeatedly at
Pareto by statistics- and protocol-loving sociologists (cf. Collins and Makowsky
1998: 211).20
Whether such a criticism is fair or unfair, I shall not judge. Rather, it is my
contention that rhetoric persists within The Mind and Society in many other ways.
For the sake of order and illustration, I shall present these ways by following
Aristotle’s designation of the three main parts of rhetorical activity. These parts
are the well-known first three canons of classical rhetoric (cf. Barthes 1988),
each dealing respectively with: what one is to say in order to prove a given point

independence of life … pleasure … good condition of property and body’; I, 4, 1360b,

14–7), never objecting to a modicum of material comforts and to harmonious social
coexistence.
18  Pareto (1935) goes as far as to claim that ‘every device of ingenious sophistry’
has been employed ‘to eliminate very obtrusive contradictions between solutions and
experience’, so as to please our pseudo-logical cravings and, at the same time, preserve that
which is ‘beneficial socially’ even if ‘false experimentally’ (§1931).
19 Aristotle’s endoxa, i.e. the received wisdom of the community within which
the rhetorician operates, embody the experience and observations of generations. Via the
precepts of religion and morality, they lead people towards that ‘happiness’, as similar as
that be to Pareto’s (1935) ‘utility’ (§§1897–8).
20  My reference to an undergraduate textbook highlights how standard this objection
has been.
168 Vilfredo Pareto

(inventio), in what order (dispositio) and in what sort of style, i.e. that style which
is appropriate to specific aims and circumstances (elocutio).

Inventio

The ‘invention’ of Aristotelian and, in general, of classical rhetoric does not

refer to inventing something, e.g. constructing a new engine or developing a new
computer programme. Rather, it refers to retrieving something in an inventory.
This ‘something’ is the set of proofs that one should produce in order to argue for
or against a given point, namely the thesis – if it is a broad issue – or hypothesis
– if it is a specific issue – of the person whose aim is to persuade, that is to say,
the rhetorician. The ‘inventory’ is the vast field of commonsensical and technical
information available to the rhetorician. The rhetorician can make use of it as sheer
factual data (i.e. ‘external’ proofs equally available to her potential adversaries) or,
more creatively, as examples, parables, fables or premises for rhetorical syllogisms
supporting the thesis/hypothesis under consideration (i.e. ‘internal’ proofs that
the rhetorician has to come up with). Typically, the clearer, more probable and
intuitive are the chosen proofs, the more likely is the rhetorician to succeed.
Operating within the frame of presuppositions and prejudices of one’s audience
is generally a recipe for success, from pub talks to peer-reviewing academe. In
addition, the rhetorician must take into account what is to be said in order to be
perceived as a person of good character, plus anything that may be of relevance
as regards directing the emotional dispositions of the specific audience addressed.
In this perspective, even the seemingly soulless, cold, artificial, formal and
symbolic language of mathematics, which is perhaps the paramount example of
objectivity in the realm of human knowledge, possesses rhetorical features. It is
the likeliest case of emphasis upon character, inasmuch as such a language “hides”
the individual mathematician completely, depriving her apparently of stylistic
devices to a much higher extent than other technical fields allowing for the use
of at least some ordinary language. Thus, Pareto’s (1935) own diagram-expressed
“coldness” is a rhetorical strategy.21
In primis, Pareto’s claims of neutral aloofness are intended to manifest the
logical character of the proofs that are provided by him qua logico-experimental
discourse directed at a broadly and loosely positivistic audience of peers, whether
contemporary sociologists would call his discourse ‘science’ or not. Secondly,
when Pareto states that he ‘is interested strictly in uniformities’, draws unnecessary
albeit helpful diagrams, and fills pages with remote events from classical antiquity
so as ‘to choose from the multitude of facts such as, in my judgment, will exert
least influence upon sentiments’ (§§84–5), he is attempting to attain an air of
wisdom. This is the case whether Pareto is actually delivering value-neutral
scientific observations or not. Analogously, when Pareto retreats from the much-

21  As my ensuing remarks on diagrams imply, choices of ‘airs’ involve stylistic

choices: inventio begets elocutio.
 Pareto’s Rhetoric 169

highlighted value-neutrality of his work and expresses worries about society’s

enduring wellbeing (e.g. §1206), he is accepting the risk of appearing inconsistent
for the sake of sounding committed to a basic notion of social welfare that would
be rejected by no reader of his, not even the quite rare Leopardi-like pessimist
(§1999). As for Pareto’s amiability, The Mind and Society may not be very reader-
friendly, due to its remarkable size and conceptual complexity. Pareto himself was
also a surly man, at least according to the records. Still, his lengthy treatise is
ripe with qualifications, exculpations and appraisals aimed at showing humour,
moderation and self-depreciation, even in connection with thinkers and thoughts
of which Pareto disapproved (e.g. §§6, 19–21, 46–7, 83, 86, 941).
What is more, along with the reason- and character-centred proofs, Pareto’s
work is not devoid of appeals to sentiment. As he discusses in §817, scientific
discourse comprises assertions that the untrained mind does not grasp as links in
a long chain of logical inferences springing from empirical data. Most people, in
other words, are to focus chiefly upon the most striking assertions presented by
the scientist, whose ‘persuasiveness’ in modern society is due to the three causes:
‘A vague feeling that a person who expresses in such a form must be right’; ‘[a]
feeling that such a select form is authoritative’; and ‘[t]he more or less vague
notion that the authority is justified’ (§1431). Consistently, Pareto’s own science
of society is going to gain acceptance amongst sections of his audience via such
a sentimental avenue, given that scientific authority is at the same time ‘a tool of
proof and a tool of persuasion’ (§1434). Besides, Pareto states that ‘an assertion
is accepted and gains prestige through the sentiments of various kinds which it
excites’, and that it is bound to be ‘more effective in verse than in prose, in print
rather than in manuscript, in a book rather than in a newspaper, in a newspaper
rather than in the spoken word’ (§1430). How much more powerful is the same
assertion going to sound in an awe-inspiring, complicated, diagram-filled treatise
of general sociology?
Hirschman (1991) believes that even stronger emotional components permeate
Pareto’s allegedly value-neutral study of social phenomena. As contended in his
Rhetoric of Reaction, Pareto’s work epitomises turn-of-the century reactionary
thought appealing to rhetorical strategies centred upon feelings of perversity,
futility and jeopardy. The targets of these feelings are, typically, the introduction
of universal suffrage, redistributive State policies, and socialism.
Hirschman’s case is well-argued, rich in textual references and pregnant with
insights vis-à-vis the non-logical and eminently persuasive components of Pareto’s
oeuvre.22 Pareto’s repeated attacks against the sort of State intervention favoured
by early-twentieth-century socialists as gluttonous ‘spoliation’ (55) by yet another
‘plutocracy’ (71) are said to rest upon a sense of futility, rather than upon any
extensive and prolonged empirical study of fairly novel democratic regimes
(78). Pareto’s theory of the ‘circulation of the elites’ (55) and his famous 80–20

22  I therefore endorse Hirschman’s assessment of Pareto (1935) and I refer the reader
to his intriguing Rhetoric of Reaction for relevant quotations from Pareto’s works.
170 Vilfredo Pareto

principle or ‘Pareto’s Law’ (56) express the inevitable persistence of inequality

within human society. However, as the young parliamentary democracies of the
1920s are concerned, they do not substantiate it empirically. Rather, Pareto’s
‘circulation’ theory and his ‘Law’ are either ‘self-fulfilling’ hypotheses – for they
exhorted the inter-war-period reader to react against democratic and socialist aims
(e.g. Mussolini’s fascist reaction) – or ‘self-refuting’ ones – for they could and, in
fact, did lead other watchful readers to anticipate and fix various shortcomings and
inconsistencies of the novel political system (e.g. the egalitarian accomplishments
of Scandinavian social-democracy; 77–9). Either way, they are no longer
components of a detached analysis of socio-historical patterns, but an incitement
to influence such patterns.
Although Hirschman does not dwell on it, a touch of perversity colours as
well Pareto’s rendering of the unexpected outcomes of socialist policies. Talking
once more about unobservable future developments of a young and polymorphous
political streak, Pareto claims that socialism would destroy the one truly productive
class, upon which the nation’s wealth depends, i.e. the capitalist class. Socialism
would thus obtain the opposite result of what it intends to achieve: it would grant
poverty for all instead of widespread wealth (58–9).
Finally, I would add that many, if not most, amongst Pareto’s readers belonged
to the wealthy section of their native societies. Henceforth, Pareto’s prospect of
an electorally sanctioned socialist ‘spoliation’ implied that they and their actual
personal wealth would be placed in jeopardy. It is plausible to assume that Pareto
made these readers feel threatened in their wallet and in urgent need of protection.
His much-debated connection with the “red-flood-damming” Italian fascism of the
inter-war period resides therein, more than in any old-age honour and post mortem
glorification that Mussolini’s regime may have showered onto Pareto.

Dispositio

The concluding paragraphs of Aristotle’s Ars Rhetorica are devoted to the parts
comprised in the well-ordered speech (III, 13, 1414a–20b). They are basically
‘two’, i.e. ‘the presentation of a problem’ and ‘its demonstration’ (1414a,
30–35). The former includes preamble and narration; the latter argumentation,
interrogations and epilogue.
Aristotle’s conception of taxis or dispositio has been discussed, verified, sub-
divided and enriched by generations of successive rhetoricians. In essence, it has
endured: any persuasive piece of communication, whether spoken or written,
must be well-organised, and this principle applies also to contemporary social
(McCloskey, 1998) and natural sciences (Gross, 1990).23
As for the persistence of dispositio in Pareto (1935), it is pretty obvious. There
is no element that is delivered casually, as exemplified by: the work’s division

23  The present chapter is itself organised according to classical rhetorical standards:
captatio benevolentiae, partitio, narratio, etc.
 Pareto’s Rhetoric 171

into volumes, chapters and paragraphs; the logical steps from methodological
considerations and considerations of the object of inquiry (volume I) to the
presentation of Pareto’s theory of residues (volume II) and derivations (volume III);
its application to the study of ‘the general form of society’ and ‘social equilibrium’
(volume IV); the epilogue-like index-summary of theorems (volume IV). Inside
this larger organised framework – Pareto’s “system” or general sociology – further
internally organised pieces of persuasive communication are delivered: the study
of each and every class of residues identified; their substantiation with examples;
the discussion of further implications arising thereof; the careful cross-referencing
seeking internal consistency and underscoring that of the overall framework.

Elocutio

The third canon of rhetoric deals with style. As Aristotle (1941) observes, it is
not enough to have something to say and, for that matter, to know in which order
to present it, for how this something is delivered is itself of crucial importance
too (III, 1, 1403b). A well-substantiated and orderly speech or essay may fail to
persuade because the language it employs is either dull or inappropriate. Therefore,
attention must be paid to its form. Quintilian (2006) expresses this notion as the
distinction between res – the things to be said – and verba – the words chosen to
say the things.24
A first implication of this simple yet fundamental consideration is that one’s
speech or written work must be appropriate to the circumstances. Classically, three
standard “genres” of discourse were acknowledged and discussed by rhetoricians:
the judicial or forensic, dealing eminently with past events and the truth or falsity
of accusations; the deliberative or political, dealing eminently with future events
and the utility or liability of law proposals; the epideictic or laudatory, dealing
eminently with present events and the praise or blame to be ascribed to a person,
activity or institution. Historically, further genres came about, including the
edifying sermon of the clergyman, the educating lecture of the teacher and, as
argued by Gross (1990), the knowledge-building study of the scientist.
Gross suggests that science constitutes yet another finely developed rhetorical
endeavour, which may resemble or combine the three classical genres summarised
above.25 Analogously to the forensic genre, the scientist’s study can attempt to
demonstrate a certain point by ‘reconstruct[ing] past science’ (10). Also, it can
attempt ‘to direct future research’, like the political genre (10). It can attempt
as well to commend and recommend those ‘appropriate methods’ that constitute

24  Twentieth-century linguists similarly distinguish between ‘signified’ and

‘signifiers’ (cf. Barthes 1988).
25  Crick (2004) argues that thought experiments, commonly used in evolutionary
theory and other branches of modern science where empirical substantiation is limited or
impossible, are actually enthymemes.
172 Vilfredo Pareto

genuine science, as opposed to detestable pseudo-science, thus exemplifying the

laudatory genre (10).
If Gross is correct, then the scientist’s study is so much more than ‘uninterpreted
brute facts’ (11) and Pareto (1935) demonstrates it, for he engages in all three
attempts blatantly and repeatedly. In his treatise, the hermit of Céligny not only
cast a piercing glance at the knowledge of social affairs accumulated up to
his own day, which includes the treatment of rhetoric recovered in the present
chapter. Also, he wished to guide the intelligent researcher away from the mire
of ‘humanitarian … metaphysical … Christian, Catholic, and similar sociologies’
and towards ‘a sociology that is purely experimental’ (§6). His admiration for
‘chemistry, physics, and other such sciences’ is never disguised (§6), for ‘it is
through them alone that we manage to gain some knowledge of the forces which
are at work in society’ (§8).
Gross’s (1990) remarks lead us to a second implication as well. Choice and
composition of words must be such as to gain and keep the attention of the audience,
in order to maximise one’s persuasiveness. This is the realm of rhetorical figures or
tropes, which Pareto (1935) addresses. Since his study of derivations constitutes an
impressive classification of linguistic expressions, it should not come as a surprise
that it may overlap with the classifications of linguistic expressions produced
by rhetoricians in the past twenty-five centuries. As shown in the section of this
chapter devoted to the first Paretian view of rhetoric, he acknowledges several
tropes that are commonly delivered in human language so as to be persuasive.
Furthermore, Pareto himself makes use of several others.26
Some tropes, like dialogismus (i.e. speaking as someone else, e.g. quoting
Condorcet; §302) and procatalepsis (i.e. refuting anticipated objections, e.g. ‘A
reader might observe …’; §21) have been the standard fare of scientific literature
to the present day, albeit many a scientist may not be aware of them as tokens of
rhetoric. Others are fairly incendiary and far less common in scientific literature,
such as ecphonesis or exclamatio (i.e. an emotional ejaculation, e.g. ‘Well said!’;
§20) and ironia (i.e. speaking so as to imply the contrary of what one says for
the purpose of derision or jest, e.g. ‘I do not deny … may be’; §503 note 6).
Overall, there is no lack of tropes in the nearly 2,000 pages of Pareto’s magnum
opus, as one can spot inter alia instances of aporia or addubitatio (i.e. asking
oneself what is the best or appropriate way to approach something, e.g. ‘Who
can mark the boundaries …’; §2), articulus (i.e. joining several phrases or words
successively without any conjunctions, e.g. ‘Theories, their principles, their
implications’; §62), correctio (i.e. amending of a term or phrase just employed or

26  As regards the fifth canon of rhetoric, tropes possess a mnemonic function too i.e.
they allow for the swifter and more durable acquisition of concepts, as with the standard
brachylogy of tables of contents, titles and headings, and with vivid metaphors such as
Pareto’s (1935) comparison of ‘the circulation of elites’ to a ‘river’ experiencing occasional
floods (§2056) or the political typology of ‘lions’ and ‘foxes’ (§2178), which Marshall
(2007) describes and employs as fundamental categories of political psychology.
 Pareto’s Rhetoric 173

a further specifying of meaning, especially by indicating what something is not,

e.g. ‘Our aim is to distinguish, not to compare, and much less …’; §46), dicaelogia
(i.e. admitting a charge, but excusing it by necessity, e.g. ‘the theories of pure
or mathematical economics have to be supplemented … So far no other method
has been found’; §35) and metaphors or translatio (i.e. referring to one thing as
another, e.g. ‘general principles’ as ‘lords’; §63).27

Concluding Remarks

In all probability, Pareto (1935) gives Aristotle less credit than he deserves. Though
self-professedly – and timidly – indebted to previous thinkers, Pareto underplays
the Stagirite’s contribution to the understanding of sentiment, especially in
connection with rhetoric. Revealingly, in addition to the enthymeme discussed
in the central part of this chapter, Aristotle’s Ars Rhetorica is cited in The Mind
and Society as giving ‘good counsel’ as concerns ‘[t]erms designating things and
arousing incidental sentiments, or incidental sentiments determining choice of
terms’ (e.g. Orestes as ‘matricide’ or ‘avenger of his father’; §1552, emphasis
removed). It is also swiftly mentioned in connection with an insightful account
‘of the traits of man according to age’ as well as ‘the effects on character of noble
birth, wealth, and power’, namely of ‘the domain of non-logical conduct’ (§275).
However, no substantial recognition or rendition of this work is present in Pareto’s
Treatise; rather, the reader finds the eventual condemnation of the Aristotelian
enthymeme selected as a token of derivation. Not satisfied with this, Pareto (1935)
includes a value-laden, sarcastic dismissal of Aristotle’s metaphysical “escape”
from the ‘desperate cases’ of his own making (§273). After all, even if more
empirically minded than Plato, Aristotle was still an unscientific metaphysician.
And yet, as I hope to have been able to show, there are more points of contact
between Pareto and Aristotle than the former acknowledges.
It cannot be excluded that Pareto’s own scientific training might have led
him to perceive rhetoric as hopelessly antiquated and not to consider that this
discipline, by having dealt with linguistic communication ‘especially under its
subjective aspect’ (§468) for twenty-four centuries, had possibly achieved more
than just engendering generations of sophists. Moreover, Pareto’s vibrant dislike
for unscientific endeavours and moralistic or political projects that did not coincide
with his own made it unlikely for Aristotle and rhetoric in general to be treated
very gently.28

27  Both Hirschman (1991) and Gross (1990) make use of notions belonging to classical
rhetoric. They are not relying upon some “new” rhetoric that I project anachronistically
upon Aristotle and Pareto.
28  Pareto (1935) disagrees with Aristotle and, for that matter, with Plato, on the notion
that we may be able to steer consciously and by logical means the deep-seated sentiments
causing non-logical action. Their hope that ‘inclinations’ may be moulded and ‘virtue’
174 Vilfredo Pareto

Nevertheless, the above-sketched list of tropes alone suggests that rhetoric

can hardly be avoided, even with regard to scientific discourse.29 Having mapped
centuries of linguistic usages, rhetoric is very likely to encroach the road of
anyone who utters a phrase aimed, if not to persuade, at least to catch the ear
and/or mind of the audience. All forms of linguistic communication, inasmuch
as this is subjectively apprehended, display an unavoidable rhetorical dimension,
for they seek to establish a modicum of identification between the speaker and
the audience, hence of trust and attention, without which persuasion would be
impossible, including persuasion based upon rational argumentation (cf. Burke
1969, Perelman and Olbrechts-Tyteca 1969, Bouvier 1995). Somehow, as shown,
Pareto (1935) recognises this last point (§§42 and 76).
At a deeper level, language is essentially metaphorical. Although this
notion has become popular only in the postmodern era, especially thanks to the
investigations of Belgian literary theorist Paul de Man (1986), it had already been
formulated by Nietzsche (1983), whose thought Pareto (1935) acknowledges to
some extent (§1712). Pareto himself recognises repeatedly the essentially arbitrary
and pragmatic function of language, including the carefully stipulated, artificial,
ambiguities-devoid language of ‘logico-experimental science’ (§108).30
Still, Pareto (1935) had no intention of producing a full-fledged study of
rhetoric. Too many and too different were the aims of his masterpiece, not least to
overcome the predictive limitations of economics by instituting a new science of
social phenomena modelled along the lines of well-established natural sciences.
Perhaps, had Pareto recognised more explicitly the wealth of knowledge contained
in so old-fashioned a discipline as rhetoric, then the persuasive power of his own
new scientific endeavour would have been lessened considerably, especially in the
positivistic academic climate of his day. His discourse, in other words, would have
been inappropriate to the circumstances.31

be taught is one that Pareto does not share in the least (§§280–81). Also, the vir bonus
peritus dicendi implied by Aristotle’s notion of the well-meaning rhetorician and idealised
by Roman rhetoricians, to whom Pareto makes a fleeting remark (§1397 note 2), is very
much analogous to the politician mocked by Pareto, as ‘[he] comes eventually to believe
that his real interest is the welfare of others’, rather than the deep-seated, unvarying and
quintessential ‘ambition to obtain money, power, distinctions’ from which all politicians
start off (§854).
29  Perelman and Olbrechts-Tyteca (1969) argue that theory of argumentation, which
includes rhetoric, is prior and irreducible to scientific investigation, insofar as scientific
investigation relies upon argumentation.
30  Pareto (1935) was aware of how ‘the more advanced sciences’ had developed
languages that gave ‘senses very different … from … everyday usage’ to ordinary terms
such as ‘water’, ‘light’ and ‘velocity’ (§115).
31  Although rhetoric had been discussed and implicitly defended by Nietzsche (1983),
whose 1872–6 lecture notes had been circulating in German since 1922, and by Richards
(1936) in the 1930s, the positivistic Zeitgeist of much of the late nineteenth century and
its fairly commonplace dismissal of rhetoric continued well into the twentieth century. It
 Pareto’s Rhetoric 175

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of Choice Theory. History of Political Economy, 33(1), 21–49.
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21–41.
De Man, P. 1986. Blindness and Insight. London: Routledge.
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Press.
Hirschman, A.O. 1991. The Rhetoric of Reaction. Cambridge, MA: Belknap Press.
Marshall, A.J. 2007. Vilfredo Pareto’s Sociology. Aldershot: Ashgate.
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 Chapter 9
Pareto’s Manuscript on Money
and the Real Economy
Michael McLure1

Introduction

Arthur Marget (1935, p. 152) has pointed to the ‘extravagant praise’ bestowed
on Vilfredo Pareto for his work on monetary theory by members of the Lausanne
school.2 This greatly irritated Marget as there were no such words of praise for the
great Léon Walras, whose innovative and original work on monetary theory was
left to languish by Pareto and his followers. Of course, Walras’s contribution to
monetary theory is now well appreciated. His notion of circulation à desservir,
introduced in the first edition of the Éléments d’Économie Politique Pure published
in 1874, anticipated Fisher’s equations of exchange. This notion was then replaced
in the subsequent editions of the Éléments by the new concept of encaisse desirée
(demand for cash balances), which is credited with largely anticipating the
‘Cambridge’ cash balance approach to the quantity theory, though the extent of
the anticipation is disputed.3 In the fourth edition of his Éléments, which was the
last edition published in his lifetime, Walras actually attempted to fully integrate

1  Economics (M251), The University of Western Australia, 35 Stirling Highway,

Crawley WA 6009, AUSTRALIA. The author would like to thank Aldo Mondesano, for his
helpful comments on an earlier draft of the paper, and Darrell Turkington, for his correction
of equation (23) from Pareto’s manuscript. Any errors remain the responsibility of the
author. He would also like to thank the editors of this book and the anonymous reviewer for
commenting on the previous draft.
2  For example, in ‘Vilfredo Pareto e la teoria della moneta’, Guido Sensini
concludes: ‘all that we now know to be scientifically correct with respect to the economic
theory of money is found, as is known, in the Cours of Pareto himself … in addition to
various passages of his Manuel, while the sociological theory of money, which Pareto
founded … remains entrusted to several points in the Trattato di Sociologia generale,
which would be well known to students of the social sciences’ (Sensini 1929 [1932],
p. 215).
3  Marget (1931) argues that Walras almost completely anticipated Keynes’s (pre-
General theory) representation of the cash balance approach to money, but, as Montesano
(2008, p. 102) has highlighted, Patinkin (1965) found that Walras did not derive the demand
for money from the marginal utility of cash balances.
178 Vilfredo Pareto

the encaisse desirée specification of cash balances within his system of general
equilibrium.4
In regard to Pareto, rather than his followers, Marget (1935, pp. 152–3) points
to two deficiencies: first, he appears to have made no use of the Fisherian type
equations of exchange that Walras developed in the first edition of the Éléments;
and second, he completely ignored Walras’s subsequent encaisse desirée approach
to monetary theory. In the subsequent secondary literature, some context for
Pareto’s position on monetary economics has been provided. In particular, Pascal
Bridel (1997, 2000) has shown that Pareto’s approach to monetary theory was
considered rather than arbitrary: monetary economics was maintained as applied
economics and not pure economic theory largely because of Pareto’s adoption
of a ‘successive approximations’ methodology, in which economic theory is
recognised as an approximate representation of the concrete phenomenon that
must be complemented by applied economics studies as well as by theories and
applied studies from other disciplines. As his interest in sociology grew, so too
did his desire to account for the non-logical aspects of behaviour that relate to
monetary phenomena, and his interest in the economic approach to monetary
theory diminished. Nevertheless, from the published works of Pareto that Marget
and Bridel were able to consider, it is still correct to conclude that Pareto did
not use Walras’s original exchange equations for the purposes of monetary theory
and that he did not utilize, or comment on, Walras’s encaisse desirée approach
to monetary theory. But notwithstanding this, Pareto still tended to support the
quantity theory of money in his Cours d’Économie Politique (Pareto [1896–97]
1971), at least as a reasonable approximation (Bridel 1997, p. 157).
More recently, though, thanks to the investigations and editorial work of
Fiorenzo Mornati, a fragmented and previously unpublished manuscript
written by Pareto on monetary theory has been published (Pareto 2005). That
manuscript, located in the University of Lausanne’s archives, was written in
1920–21 when Pareto was 72 years of age. In the decade prior to writing it, he
was almost exclusively engaged in his long inquiry into general sociological
theory. Even though economics is a branch within Pareto’s sociological theory,
and sociological discussions were often directed towards economic and monetary
phenomena, this manuscript is unusual in that it marks one of the few occasions
that the elderly Pareto set about formally investigating a fundamental issue in
economic theory.
Publication of this manuscript provides an opportunity to update and clarify
some of the conclusions mentioned earlier on Pareto’s approach to monetary
theory. Most importantly, it reveals that Pareto:

4  While this attempt was not successful, Walras theories of capitalisation and money
can be reformulated without the ambiguities and inconsistencies of Walras’s original
specification while retaining many of the important features of his equilibrium model (see
Montesano 2008).
 Pareto’s Manuscript on Money and the Real Economy 179

1. reflected on quantity theory of money in terms of equations of exchange

that were similar to, though not identical to, those developed by Walras in
the first edition of the Éléments;
2. systematically interrogated these equations, while remaining within the
context of the general equilibrium theories of exchange and transformations
in production, to critically assess the quantity theory of money; and
3. concluded that the quantity theory must not be adopted because it does not
account for interdependencies between money and the real economy.

This study is in two main parts. The manuscript is critically overviewed in the
first part. As Pareto alters the meaning of the coefficient representing the ‘velocity
of circulation’ without warning part way through his analysis, and provides only
incomplete explanations of aspects of his analysis, the main contribution of this part
of the paper is to clarify the details of, and define the general character of, Pareto’s
critical assessment of the quantity theory of money. In the second part of the
study, the Walrasian and non-Walrasian elements of the manuscript are identified
and investigated. Identification of the Walrasian antecedent in the manuscript
is significant because it is missing from, or obscured in, Pareto’s previously
published economic studies. Identification of the notable non-Walrasian elements
of the manuscript is significant, especially when complemented by discussion of
his work on net returns and rents in his 1896–97 Cours d’Économie Politique
and 1906 Manuale di Economia Politica, as they help clarify why Pareto did not
follow Walras more fully on matters of money. It is concluded that:

1. Pareto went further in accommodating Walras’s ideas on monetary theory

in general equilibrium than was previous thought, but
2. his explicit investigation of the fundamental interdependence between real
and monetary variables and the economic significance of divergent net rates
of return on diverse items of capital prohibited him from integrating money
within general equilibrium theory along the lines envisaged in Walras’s
mature work.

The Manuscript: A Critical Overview

The manuscript commences by pointing to a set of equations that take the same
general form:

α0 p0 + α1 p1 + … – αn pn – … = 0

where:

α0 , α1, … αn    are quantities of goods and services

180 Vilfredo Pareto

p0, p1, … pn   are the prices of the goods and services
     with corresponding subscripts.

This form of equation is used for the cases of exchange of goods in Walrasian
general equilibrium. For simplicity, Pareto truncates the above relationship by
using the letter S to indicate a sum of values within the above equation for an
individual, reserving the Greek letter Σ to indicate the summation of the equations
for all individuals when deriving economic aggregates.

(1)      α0 p0 + S (α p) = 0

Money, be it money-as-a-good (commodity-money) or paper-money (fiat-money),

is represented by the term α0 p0. To investigate the relationship between monetary
and real phenomena, Pareto explicitly acknowledged that the range of entities
engaged in monetary transactions must be broad and the scope of equation (1) has
to be extended beyond the usual limits of pure general equilibrium theory. Among
other things, the equation (1) applies to individual people as well as individual
economic institutions.5 Consequently, the transfer of money to facility exchange
and production may be accommodated either directly by the parties, through the
receipt or payment of currency, or indirectly, through the debiting or crediting of
bank accounts.
For each individual equation (1) sums to zero, but the equation can be
aggregated for all individuals – both people and institutions – to represent the
entire national economy and algebraically manipulated to derive the total quantity
of money necessary for transactions. This algebraic manipulation is undertaken in
two steps. First, by setting the quantity of money and value of goods and services
purchased on the left hand side of the equation and shifting price and value of
value of goods and services sold to the right hand side. Second, as the value of
every transaction figures twice, once as a payment and again as a receipt, each side
of the equation is halved:
1 1
(2)      ∑ (α0 p0 + α1 p1 + …) =   ∑ (αn pn + …)
2 2
Though not explicitly stated, the purpose of these two steps is to allow the
aggregate monetary value of all transactions undertaken across the entire
economy to be represented by the sum of each side of equation (2). As such, in

5  Pareto makes reference to institutions like banks, local government, provincial

governments and the State so that expenditures and incomes, gifts given and gifts received,
taxes paid and government spending fall all fall within the scope of equation (1). He
recognised that this leads to difficulties for general equilibrium theory, mainly because
redistributive process associated with public sector actions obscure relative economic
valuations that may be revealed through voluntary choice. Nevertheless, he raised such
matters as a caveat only – he did not raise it as a reason for excluding monetary analysis
from equilibrium theory.
 Pareto’s Manuscript on Money and the Real Economy 181

equilibrium the monetary value of aggregate transactions is equal to the sum of:
half the value of national expenditure (the left hand side of equation); and half
the value of national income (right hand side of the equation). Of course, the total
monetary value of transaction is not the same as the quantity of money, which
Pareto terms the total sum of money in use, σ. In the manuscript the quantity of
money is defined as the aggregate monetary value of transactions multiplied by
two coefficients: α, representing the proportion of the aggregate monetary value of
economic transactions that is the subject of monetary exchanges; and, v, ‘to obtain
the sum (of money) really operating … which many economists call the velocity of
circulation of money’ (2005, p. 261). The resulting equation for the sum of money
is reported in the manuscript as equation (3), although, in light of the equality
between the left and right hand sides of equation (2), perhaps the sum of money
would be more clearly represented by equation (iii):

(3)   σ =
α .1 ∑ (ɑ0 p0 + ɑ1 p1 + …)
v 2

(iii)  σ =
α .1 [ ∑ (ɑ p + ɑ1 p1 + …) + ∑ (ɑn pn … +)]
v 2 0 0

The coefficient α is not only introduced to account for transactions being paid
on a net basis through the banking system, but also for gifts and other exchanges
received without payment. The coefficient v is empirically determined: it is simply
the coefficient that is empirically necessary to derive the quantity of money in the
economy once the α coefficient and the aggregate value of economic transactions
have been established. The conceptual meaning of coefficient v is consistent
with the velocity of circulation in equation (3). However, this is not the case in
subsequent equations developed in the manuscript where the same symbol is used
with a modified conceptual meaning, as discussed in the forthcoming sub-section
on Criticisms of the Quantity Theory.

Money and the Arbitrary Determination of General Equilibrium Values

When the unit of price, ( p0 ) in equation (1), is defined as a unit of economic

good A0 and ɑ0 is the quantity of that economic good, Pareto concluded that ‘all is
determined and nothing in the equations of [general] equilibrium is left arbitrary’
(Pareto 2005, p. 261). However, when fiat-money is introduced into equation (1),
with the unit of price p0 accounted for as a unit of paper money: prices alter across
the entire economic system with, among other things, the quantity of money.
Pareto classes this equilibrium as ‘entirely arbitrary’ (Pareto 2005, p. 261).
Importantly, Pareto’s distinction between arbitrary and non-arbitrary
determination of equilibrium is not introduced to suggest that money is a veil -
the basic purpose of the manuscript is to demonstrate that money is not a veil.
Rather, consistent with what Bridel (1997, p. 153) has identified in Pareto’s earlier
published works, the ‘determination’ of equilibrium is considered with respect
182 Vilfredo Pareto

to the fundamental relationship between value and utility (ophelimity). When

prices are determined non-arbitrarily, all valuations are considered with respect to
a numeraire good ɑ0 and each of the exchanged quantities within equations (1) are
included within utility functions, including good ɑ0 which plays both a monetary
and a non-monetary role in the economy. However, when equilibrium is ‘entirely
arbitrary’, Pareto appears to be acknowledging that the price p0 of paper money ɑ0
is not related to utility with prices not directly reflecting the utility of paper money
ɑ0 . As such, the price of economic goods is no longer related to an item that is an
economic good (i.e. numeraire) with direct utility to people.

The Quantity Theory of Money

Pareto defines the quantity theory of money in reference to equation (1), which he
modifies to give equations (8.2) and (9.1):

p0 p
(8.2)   ɑ0 +S a 0 =0
μ μ

1
(9.1)   σ1 = σ
μ

For an individual, equation (8.2) is an algebraic equivalent to equation (1), but it

now represents economic relationships in a new period: p0 in the first left hand term
(the unit of currency) and p in the second left hand term (the prices of economic
goods and services) are both discounted with respect to the initial period by the
same coefficient, μ. For the economy in aggregate, equation (9.1) is equation (3)
after adjustment for the difference between equation (1), in the initial period, and
equation (8.2), in the new period. In effect, the parameter μ is implicitly assumed
to be 1 in equations (1) and (3), which define the initial period, whereas, in the new
period, a change in the quantity of money and prices is indicated by a movement in
the parameter value μ away from 1. When μ is less than one, both the quantity of
money and price levels rise between the initial and the new period. After reflecting
on this relationship Pareto notes that:

one has a theory, complete, simple, beautiful. A shame it does not accord too
much with the facts (Pareto 2005, p. 264).

Criticisms of the Quantity Theory

The manuscript reveals that Pareto had two main concerns with the quantity theory
of money. First, and most fundamentally, the theory excludes interdependent
influences between money and real economic phenomena. Second, a single
 Pareto’s Manuscript on Money and the Real Economy 183

homogenous change in the price of all economic goods and services is correlated
with changes in the quantity of money, which is at odds with the observation of
multiple and diverse price variations across a range of goods.
To investigate the relationship between the quantity of money and prices,
Pareto undertakes a number of exploratory algebraic investigations to consider
whether equations (8.2) and (9.1) can be modified to provide a more realistic
representation of the relationships between the monetary and real phenomena. His
primary purpose was to modify these equations to account for the interdependence
between these phenomena:

The reality is that there is only a relationship of interdependence and to know the
particulars [of this relationship] considerations other than monetary circulation
and prices are needed (Pareto 2005, p. 264).

To demonstrate this, he settled on dividing the monetary and real terms in equations
(8.2) and (9.1) by another coefficient, v, to give:

a a p
0
        (10)     + S     = 0
vμ v μ

1
(9.3)   σ1 = σ
vμ

It is necessary to recognise a change in the character of the coefficient v in the

new period compared to its use in the initial period. In equation (3), which refers
to an initial period, the co-efficient v is readily linked to the conventional concept
of velocity of circulation of money. In equation (10), for an individual or entity,
and in equation (9.3), for the aggregate, reference is to the ‘new’ period and the
coefficient v changes in two ways. Firstly, it is now used in a ‘relative’ sense:
it has become the ratio of ‘velocity’ in the new period to ‘velocity’ in an initial
period. This is not stated explicitly in the surviving parts of the manuscript, but
it is nevertheless clear from the discussion later in the manuscript concerning a
sequence of monetary periods (as summarised in Appendix 1). Secondly, and more
fundamentally, in equations (10) and (9.3), the meaning of ‘velocity’ changes: v is
no longer a coefficient for the velocity of circulation of money, rather, it becomes
the coefficient that represents the interdependent link between real and monetary
phenomena.
When the relative form of the coefficient ν is 1 in equation (10) and (9.3),
the ‘quantities’ of economic transactions in the new period are said by Pareto to
be the same as they were in the original period: the real economy is unchanged
between periods. However, when v is greater than one, the quantity of economic
goods and services in the new period diminish relative to the original period (i.e.
184 Vilfredo Pareto

real economic contraction). When v is less than one, the quantity of economic
goods and services in the new period rise relative to the original period (i.e. real
economic expansion). When a state is characterised by v > 1 and μ < 1, Pareto
surmises that:

a [from equation (1)] becomes a / v which indicates that a falls, or, to be precise
for instance, part of the a is destroyed; p becomes p / μ, which indicates that p
rises; therefore equation (10) corresponds to the case in which some of goods a
are destroyed while prices rise (Pareto 2005, p. 263).

But the case where v > 1 and μ < 1 not only marks a decline in the real economy
(‘a falls’) and a rise in prices (‘p rises’), the coefficient v also denotes a decline
in the quantity of money when expressed in values from the initial period (ɑ0 is
divided by, among other things, v). Of course, when the product of v and μ is 1
the decline in the real economy would be of the same relative magnitude as the
rise in prices. In Pareto’s illustrative example, v = 2 and μ = 1/2, so when the
nominal quantity of money is left unchanged between periods, the quantity of real
economic transactions is halved as prices double (Pareto 2005, p. 263).
To illustrate the character of Pareto’s coefficient v in equations (10) and (9.3),
consider the simplified case in which there are no price changes, μ = 1. In that
case it is evident that coefficient v is not what would be required for it to be
interpreted conceptually as a relative change in the velocity of circulation. By
way of illustration, from equation (10), a 10 per cent increase in real transactions
would be associated with a v coefficient of 0.90909. If the coefficient were to
also represent the relative change in the velocity of circulation between the initial
and the new periods when the quantity of money remains fixed, it would imply a
9.0909 per cent decrease in circulation. But a 10 per cent increase in the velocity
of circulation would be required for an unchanged quantity of money to maintain
prices while the real economy grows by 10 per cent. Consequently, it appears that
the coefficient v used by Pareto in equations (10) and (9.3) is actually the inverse
of the ratio of the anticipated change in velocities.
Expressed more generally, the terms ɑ0 / vμ and Ϭ / vμ from equations
(10) and (9.3), which express the quantity of money in a new period in terms
of the purchasing power of the initial period (for the individual and economy
respectively), treat the coefficient v as if it were a ratio of: the inverse of the
velocity of circulation in the new period relative to the inverse of the velocity of
circulation in the initial period. In contrast, when the quantity of money is defined
for the initial period only, as it is in equation (3), the coefficient v is treated in an
absolute form, not as an inverse ratio, which is consistent with the conventional
meaning of the velocity of circulation.
Needless to say, this mixed role for the single coefficient v is far from
satisfactory and will no doubt confuse readers. Perhaps Pareto’s comment in the
manuscript that v is the ‘coefficient to obtain the sum (of money) really operating’
(Pareto 2005, p. 261) was his way of suggesting that v is only intended to have
 Pareto’s Manuscript on Money and the Real Economy 185

an empirical character to calculate the quantity of money without any conceptual

foundation. Alternatively, as the manuscript is only fragmentary and incomplete,
it may be that a fuller discussion of the coefficient v is contained in the parts of the
manuscript that have since been lost.

Clarification of the Role of Pareto’s v in the New Period

The role of v in Pareto’s analysis may be clarified when it is recast in the context
of the Fisher equation MV = PT.6 The elements of Pareto’s equation (3) broadly
equate with the elements of the Fisher equation, with σ corresponding to M and
the value of transactions, ½ ∑ (ɑ0 p0 + ɑ1 p1 + …), corresponding to PT.7 As
equation (3) is limited to the initial period, v here broadly corresponds to Fisher’s
V – it is the velocity of circulation of money plus any residual empirical factors
that influence the resulting quantity of money.8 If Fisher’s upper case notation is
adopted for the initial period variables, indicated by the subscript 0, and Pareto’s
lower case relative coefficients v and μ are used to represent ratios for change
between the initial and the new periods, then Pareto’s equations for the quantity of
money in the initial period (equation 3) and in the new period (equation 9.3) may
be represented respectively as:
P0 T0
         (iv) ‘Initial’ Period M0 =
V0
M0 P0 T0 1
     (v) ‘New’ Period M1 = = .
μv μ v V0

The relevance of the coefficients μ and v for the real economy and the velocity of
circulation of money in equation (v) can be isolated by defining variables V, P and
T specifically for the new period:
P0 P0
  ‘New’ Period variables defined: P1 = , T1 = and/or V1 = V0 . μv
μ μ

6  For convenience, Irving Fisher’s extended equation is not considered here. For
discussion of the extended equation, MV +M`V`= PT, where M is money in circulation,
M` is bank deposits and V and V` are their respective velocities of circulation, see Fisher
(1911) and Dimand (2011).
7  For Fisher, the sum of transactions is not halved, but Pareto was forced to do so
because his equation double counts by including both payments and receipts. Consequently,
Pareto’s ½ ∑ (ɑ0 p0 + ɑ1 p1 + …) is substantively equivalent to Fisher’s PT.
8  There is no clear place for the coefficient α (the proportion of transactions that are
monetarised) in the Fisher equation. However, as Pareto does not discuss variations in α
between periods, it is implicitly treated as constant between periods and can be set aside for
the purposes of this illustrative comparison.
186 Vilfredo Pareto

When the above new period variable are substituted into equation (v), the quantity
of money in the new period can be expressed as either the value of transaction in
the new period divided by the velocity of circulation in the initial period, or the
value of transactions in the initial period divided by the velocity of circulation in
the new period:
P1 T1 P0 T0
         (vi)   M1 = =
V0 V1

But again the relationship represented by equations (v) and (vi) are counter
intuitive as they suggest that, for a given quantity of money in the new period,
the change in the real value of economic transactions corresponds with an inverse
change in the velocity of circulation.
P1 T1 V0
            (vii)    =
P0 T0 V1

This presents the same difficulty that was discussed in the previous section on
Criticisms of the Quantity Theory: if it is assumed that the initial velocity of
circulation is 1, equation (vii) suggests that a 10 per cent increase in the value of
real transactions between the initial period and the new period would correspond
to a V1 term of 0.90909, and not the expected value of 1.1 (as an increase in
value of real transactions would require an equivalent increase in the velocity of
money if the quantity of money is fixed). The explanation for this counter intuitive
result is also that same as for the previous section: while V0 may be interpreted
conceptually as the initial velocity of money in all the above equations, V1 cannot
be interpreted conceptually as the velocity of circulation in the new period in any
of the equations. This is because Pareto’s coefficient v is not the ratio of velocity
of circulation between the new period and the initial period, but its inverse. He
specified the coefficient in that manner because he wanted to use it to inflate the
initial real quantity of transactions as a step to deriving the real value of transactions
in the new period.
Nevertheless, Pareto’s analysis of his co-efficient v in his own quantity
theory framework is successful in highlighting the interdependence between real
variables, as T1 = T0 / v, and monetary variables, as M1 is also influenced by v,
and for presenting that interdependence as a sound reason for questioning the
scientific basis of the quantity theory. Consequently, he showed that a variation in
the quantity of money can be associated with changes in: the (the inverse of) the
velocity of circulation; the value of real transactions, nominal prices or no change
at all. A-priori he saw very limited scope for selecting one possible outcome
ahead of another. However, he did this in a manner that, while strictly correct
within its own terms, adopted an empirical meaning of the coefficient v that is
confusing when that coefficient is considered conceptually as a relative velocity
of circulation.
 Pareto’s Manuscript on Money and the Real Economy 187

Heterogeneous Price Variations

Pareto’s second objection to the quantity theory of money concerned the literal
proposition that the single price adjustment, (1 / μ ) in equations (8.2) and (9.1),
is revealed as equal for all economic goods. He does not interpret the quantity
theory of money as a revealing a relationship between money and the general price
level; rather, he interprets the theory as literally suggesting that money is a veil
that falls over the entire system of prices. When money is a veil, an implication of
the ‘price level’ interpretation of the quantity theory is that observed variations in
the relative price of goods and services are due to changes in market conditions,
which are deliberately set aside in quantity theory comparative statics (e.g. when
equations (1) and (3) are contrasted with equations (8.2) and (9.1)). Pareto, in
contrast, considers that at least some of this observed variation in relative prices
is due to different degrees of real-monetary interdependence across the range of
economic goods.
To ‘take a step closer to reality’, he distinguishes between two broad classes
of goods: goods A which vary in price with monetary phenomena; and goods B
which do not vary in prices with respect to monetary phenomena. On that basis,
equation (1) is revised to:

α0 p0 + ∑ (αp) + ∑ (bp) = 0

The expression for the quantity of money changes accordingly. Money in the
‘original’ period is now given by equation (22.1) and money in the ‘new’ period is
given by equation (22.2), or its equivalent, equation (22.3).

a
(22.1)   σ = (∑ αp + ∑ bp)
2v
a
(22.2)   σ1 = (∑ α' p' + ∑ bp)
2v

(∑ α' p' + ∑ bp)

        (22.3)   σ1 = σ
(∑ αp + ∑ bp)
The quantity of money in the new period, as then defined in equation (22.3)
with reference to ratios of the value of commodities unrelated to, and related to,
monetary phenomena, the relationship may be formalised as:

a ( 1 + mn) ∑ bp ∑ ap
(23)   σ1 =           when: m = , n=
2v ( 1 + m) ∑ ap ∑ a' p'
188 Vilfredo Pareto

Equation (23)9 serves to demonstrate that, when prices rise by more than real
economic growth, vu < 1, the equality revealed in equation (9.3) will not hold
when price rises are confined to a subset of goods. Rather, the quantity of money
in the new period will be less that what equation (9.3) indicates, as only values
that figure in the ratio n are influenced by the coefficients v and μ - values that
figure in ratio m are not influenced by these coefficients. By way of illustrative
approximation, the variable n in equation (23) may be replaced with the product
of the coefficients v and μ:

σ ( 1 + mμv)
          σ1 =
μv ( 1 + m)

( 1 + mμv)
          when μv < 1, < 1 and:
( 1 + m)

σ
   (24)      σ1 <
μv

Nevertheless, it should be noted that this analysis of Pareto is very restrictive as it

is limited to two classes of relationships. Instead of limiting his considerations to
the case of interdependence between monetary phenomena and some commodities
(goods A) and the case of independence between monetary phenomena and some
commodities (goods B), commodity specific subscripted coefficients v and u
could be introduced which cover the full spectrum of interdependencies between
real and monetary phenomena. However, the restriction is deliberate and appears
to be due to Pareto’s concerns over the experimental difficulty of identifying
coefficients. In this regard, Pareto even saw empirical problems with the general
situation represented by his equation (9.3) – direct observation of monetary data
over time will only reveal the product vμ and not the separate coefficients for each
parameter (2005, p. 263). Any further use of coefficients would further compound
the experimental problem.

Walrasian and non-Walrasian Ideas

For historians of the Lausanne tradition in economics, the significance of this

manuscript is that it defines the limited extent to which Pareto was prepared
to go when integrating monetary theory with general equilibrium theory.

9  I would like to thank Aldo Montesano for advising me of an apparent misprint in the
manuscript in which n in equation (23) is incorrectly defined (see Appendix 2).
 Pareto’s Manuscript on Money and the Real Economy 189

Notwithstanding Pareto’s total lack of references in the manuscript to studies of

monetary theory by Walras (or any other scholar), it is possible to deduce the
aspects of Walras’s monetary theory that Pareto accepted, from his discussion of
money within the context of the exchange equation, and to be more specific about
the reasons why he did not follow Walras in attempting to fully integrate money
within general equilibrium.

Walrasian Elements of the Manuscript

As Pareto considered monetary issues in the context of general equilibrium, there

was some basis for him to follow Walras along the lines of the exchange equation
introduced in the first edition of his Éléments (Walras 1874, p. 200):10

α" Qa" = α' Qa' pa + βQb pb + γQc pc + δQc pc + …

  Where Qa" = stock of money metal A that is used as money

Qa'' = part of the money-metal stock A used doe
comodity use
α", α = respective coefficient (velocities) of circulation
for Qa' and Qa"
Qb, Qc , Qd = quantities of economic goods B, C and D
pa = the price of A reletive to itself (i.e. pa = 1)
pa , pc , pd = the reletive prices (in terms of A) of goods B, C
and D
β, γ, δ = respective coefficient (velocities) of circulation
of B, C and D

Monetary equation (3) in Pareto’s manuscript has many similarities with Walras’s
exchange equation above and both can be substantively reduced to the Fisher
exchange equation. The differences between the two specifications are largely
contextual (in the particular case above Walras was dealings with money-as-a-good
and isolated the monetary component of that good from its other uses), technical
(Walras explicitly included the velocities of circulation for goods to account for
the influence of repeat sales of goods on money, whereas, from the time of his
1906 Manuale di Economia Politica onwards, Pareto recognised that the same
physical good at different points in time become different economic goods)11 or

10  This source for this reference is Bridel (1997, p. 43).

11  ‘… transformation in time consists of substituting a good that is available at a
certain time for a good available at another time. …[e.g.] two economic combinations for
production — (A) 100 kilograms of wheat to be consumed at seed time; (B) 100 kilograms
of wheat to be consumed at the time of the next crop — are not identical; they are different
commodities; consequently, (A) may have a price that is different from that of (B) … . The
190 Vilfredo Pareto

trivial (Pareto’s adjustment to the value of exchange for his double counting of
monetary and real transfers).
The only substantial difference between Pareto’s equation (3) and Walras’s
original monetary exchange equation is associated with Pareto’s introduction of
an exogenous variable (α) for the proportion of transactions that are monetarised.
However, the significance of this should be seen in a broader context because
Pareto’s exogenous adjustment is less relevant when his analysis is considered
with respect to the more mature encaisse desirée approach that Walras finalised
in his 1900 edition of the Éléments, in which case the demand for real cash
balances is treated as an endogenous element within the general equilibrium
system.

Non-Walrasian Elements of the Manuscript

The Cours, which contains Pareto’s most extensive discussion of monetary issues,
includes discussion of real and monetary interdependencies in the equilibrium
adjustment process following a monetary shock. While this did not prevent him
from accepting the quantity theory as a guiding rule,12 he nevertheless refrained
from formally integrating money within general equilibrium theory.
In his 1920–21 manuscript, however, the fundamental reason for Pareto not
following Walras’s in encaisse desirée approach and attempt to integrate money
within general equilibrium theory is evidently grounded in the recognition of
interactions between the real and monetary sectors, which lead him to abandon the
quantity theory. As such, the primary difference in the mature position of the two
masters of Lausanne on monetary economics is evident from Pareto’s introduction,
in equation (10), of the ‘relative’ form of coefficient v to the equations of exchange
to link real and monetary phenomena. Full integration of money within Walrasian
general equilibrium theory would, in Pareto’s eyes at least, require empirical
support for the view that money does not disturb the relationships of general
equilibrium. However, observation suggested to Pareto that money does indeed
disturb these relationships: money is not a veil and the propositions of the quantity
theory for money are not empirical uniformities that belong within general theory.
Moreover, as Pareto relied on the coefficients v and μ to link the real economic
quantities, nominal quantities and nominal prices without establishing empirical
regularities for modelling a theoretical relationship between v and μ, there was no
scope for Pareto to consider integrating money and pure general equilibrium in a

difference between the price of (A) and that of (B) is the price of transformation in time …’
(Pareto 1906 [2006], p. 220).
12  As Pascal Bridel has noted, Pareto continued to consider money as ‘approximately’
neutral, arguing that: ‘if left to its own devices, an economic system submitted to a monetary
shock is ‘naturally’ (though approximately) self adjusting. In a Friedmanite way, Pareto’s
careful theorizing seems to have been slightly overtaken by the ultra liberal ‘vision’
displayed in the Cours’ (Bridel 1997, p. 157).
 Pareto’s Manuscript on Money and the Real Economy 191

fundamentally non-Walrasian way. Monetary theory simply remained outside the

scope of pure economic theory as part of a necessary second order approximation
of the economic phenomenon.

Returns on Capital and Rent: On Re-reading the ‘Cours’ and ‘Manuale’

It should also be recognised that, even if the fundamental concerns with the quantity
theory of money evident from the manuscript in question could be set aside,
Pareto’s approach to capital alone would have prevented him from integrating
money within the pure theory of general equilibrium. While Bridel (1997) has
identified the main general reasons why Pareto did not follow Walras, he did not
discuss the relevance of capital and rents to this issue. As the explanation for rents
within Pareto’s theory does provide important context for Pareto’s position on
money, comment on the matter is included here.
At the general level, Pareto is at one with Walras in presenting general
equilibrium as a successive integration of the theories of exchange, equilibrium and
capital formulation. This is readily evident in the Cours. Even the abstraction from
the notion of capital in the Manuale (to facilitate discussion of the transformation
of goods and services in production as obstacles to the satisfaction of tastes) only
alters the form of pure theory, not its substantive character. Walras attempted
to integrate circulating capital and money with his related theories of capital
formation, production and exchange. He did so by deriving the demand for real
monetary balances from a sequence of equations that relate back to real variables,
as reviewed in Bridel (1997). In the process, he presumes that the tâtonnement
process will ensure equilibration of the rate of interest with the net rate of return
on all capital items. But this represented a significant sticking point for Pareto,
who repeatedly pointed to influences that act to prevent the net rates of return on
each and every heterogeneous capital item from equilibrating to a single rate that
corresponds with the interest rate.
In the Cours, rents are specifically presented as the obstacle to the equalisation
of the net rates of interest (Pareto 1896–97 [1971], p. 769, §780), which may be due
to differences between old and new capital goods following a change in economic
circumstances, such as a variation in the interest rate on the transformation of
savings into capital (1896–97 [1971, p. 747, §747). More generally, rents on
specific types of heterogeneous capital and land are associated with the different
periods of time required to transform economic goods into other goods.13 In the
language of the Cours, when an economic system generates rents, free competition
is associated with ‘incomplete equilibrium’. The point that needs to be underlined
here is that Pareto regarded incomplete equilibrium generally and the theory of
rent specifically as:

13  See Bird and Tarascio (1992) for clarification of the difference between Pareto’s
theory of rent and what is more commonly referred to as ‘Paretian’ rent theory.
192 Vilfredo Pareto

pertinent to pure economics, but for didactic reasons, it is convenient to delay its
study until after studying fixed capital (Pareto 1896–97, p. 1090).

In the Manuale, when discussing the abstraction from the concrete notion of
capital in favour of transformations in production, Pareto also emphasised that
his analysis of transformations does not presume that there is a single net yield
on all capital goods (Pareto 1906 [2006], p. 226). Of course, he recognised that
complete general equilibrium depends on the equalization of rates of return across
the diverse types of capital and, by temporarily positing that capital items are
assumed to be produced at the same time (1906 [2006], p. 240), he investigated the
properties of complete equilibrium. But this was a convenient device for closing
a theoretic system in a manner that created a platform, or point of departure, from
which the issue of rents could be investigated when net returns are not equalised.
That is, Pareto regarded the equalisation of returns as an acceptable approximation
because it would serve as the point of departure for the development of his theory
of rent based on variations in net rates of return across capital goods. He could
not have contemplated further developments in pure economics beyond the theory
of capital formation that depended on the re-introduction of an equalisation
assumption pertaining to net rates of return on capital items and interest. It may be
objected that Alfred Marshall was happy to develop a theory of rent as well as lay
the foundations for the Cambridge equation for the quantity theory, so why should
the issue be different for Pareto? The answer is that Marshall largely theorised
in partial equilibrium whereas Pareto theorised in general equilibrium: the issues
that Pareto would have confronted when reflecting on the roles of rent and money
in a system of general equilibrium would not have been issues of consequence in
Marshall’s framework.14

Conclusion

There are many references in Pareto’s work to the weakness of monetary theory. By
the time that he wrote ‘Economia sperimentale’ (Pareto 1918), there is absolutely
no doubt that Pareto regarded the development of monetary theory by economists
as totally lacking in scientific foundation. The discovery of a manuscript drafted
in 1920–21 that formally investigates the quantity theory of money, instead of
extending his sociological analysis of money, is therefore rather surprising.15
More importantly, the manuscript is significant as it represents the first ‘formal’
economic analysis to explain the shift in Pareto’s position from the quantity theory
of money.

14  Moreover, Pareto’s theory of rent is also quite distinct from Marshall’s theory of
rent (see Bird and Tarascio 1992).
15  See McLure (2007, pp. 91–3) for discussion if Pareto’s observations on monetary
theory and the ‘sociological part’ of economic phenomena.
 Pareto’s Manuscript on Money and the Real Economy 193

From the manuscript it is now clear that Pareto went further in accommodating
Walras’s ideas on monetary theory in general equilibrium than was previously
thought. Specifically, he introduced a set of equations of exchange for the purpose
of monetary theory that was very similar to, though not identical to, what Walras
developed in the first edition of the Éléments. However, his use of this set of
equations as the basis for a critical assessment of the quantity theory also reveals
why Pareto would have been unable to follow Walras’s approach of integrating
money within general equilibrium theory. His recognition of the interdependence
between real and monetary variables, and the consequent abandonment of
the quantity theory of money, would prohibit such a development. This is also
consistent with the argument, advanced in this chapter, that the approach that
Pareto took in the Cours and Manuale on rent theory and the associated diverse
rates of return on heterogeneous capital would have further dissuaded Pareto from
following Walras’s mature approach to monetary theory.
Of course, Pareto did not publish his manuscript. Nor did he liaise widely with
his interlocutors on the manuscript. It was referred to in his letters to Stanislao
Scalfati and Guido Sensini written between November 1920 and February 1921
(Mornati in Pareto 2005, p. 268). However, on all occasions the comments were
very general and oblique. From this, it must be conceded that Pareto may have
had reservations about the paper or that he did not consider it significant. It is
also plausible that the failure to publish the manuscript was due to the inability
of an elderly man in poor health to marshal the energy necessary to re-engage in
formalist economic discourse. There are certainly significant ambiguities in the
manuscript, though hopefully they have been clarified in this study, and a number
of errors. Redrafting of the manuscript would have had to be extensive.
But, irrespective of the reason why he did not redraft and publish the
manuscript, historians of economics are indeed fortunate now to have access to a
document that provides considerable insight into Pareto’s monetary thought.

Appendix 1

Pareto’s Three Period Analysis

Some illustration of the general relevance of equations (10) and (9.3) is provided
by Pareto in his analysis of a multi-period sequence. For three periods, I, II and III:

v ' parameter that scales for change in the real economy between
periods I and II;
v '' parameter that scales for change in the real economy between
periods I and III;
194 Vilfredo Pareto

μ ' parameter that scales for nominal price changes between periods I
and II, and
μ '' parameter that scales for nominal price changes between periods I
and III;

the respective equations may be represented as:

I representative equation:
a + S ap = 0
2v vμ
a
aggregate equation σ1 =
(vμ)

a0 ap
II representative equation: +S =0
(vμv' μ') (vμv' μ')
σ
aggregate equation σ1 ' =
(vμv' μ')

a0 ap
III representative equation: +S =0
(vμv'' μ'') (vμv'' μ'')
σ
aggregate equation σ1 '' =
(vμv'' μ'')

The relevance of this to Pareto is that it illustrates, again, that the quantity theory of
money is a very partial theory because the quantity of money in period II relative
to period III is not (μ'')/(μ'), as the quantity theory implies, but:

σ
σ1 ' (vμv'' μ'') (v '' μ'')
= =
σ1 '' σ (v ' μ')
(vμv'' μ'')
 Pareto’s Manuscript on Money and the Real Economy 195

Appendix 2

Notation Errors in ‘Note Critiche di Teoria Monetaria’

Section I

Page 261

Pareto’s manuscript: Correction

1 1
α=
2
∑ (α0 p0 + α1 p1 + …) σ=
2
∑ (α0 p0 + α1 p1 + …)

Page 262
Pareto’s manuscript: Correction
   …    …
α0 α =0 α0 α p =0
(8) +S +S
v v v v
  
…   
…

Section II

Page 263

Pareto’s manuscript: Correction

1 1
σ1 = σ μ σ1 = σ
μ

Section IV

Page 267

Pareto’s manuscript: Correction

∑ bp ∑ ap
n= n=
∑ α' p' ∑ α' p'
My colleague Darrell Turkington has kindly demonstrated that, if the published
definition of n is retained, then equation (23) would need to be revised:
196 Vilfredo Pareto

σ (1 + mn)
from (23) σ1 =
n (1 + m)

σ (m + mn)
to (xxiii) σ1 = n (1 + m)

References

Bird, Ronald and Vincent J. Tarascio 1992. ‘Paretian Rent Theory Versus Pareto’s
Rent Theory: A Clarification and Correction’, History of Political Economy,
24(4), pp. 909–23.
Bridel, Pascal 1997. Money and General Equilibrium Theory. Cheltenham:
Edward Elgar.
Bridel, Pascal 2000 ‘From Walras’s to Pareto’s Teachings: The Case of Monetary
Theory’, in Economia, Sociologia e Politica nell’ Opera di Vilfredo Pareto,
edited by Corrado Malandrino and Roberto Marchionatti. Florence: Leo S
Olschki editore, pp. 123–39.
Dimand, Robert 2011 ‘One Hundred Years from Today: Irving Fisher’s The
Purchasing Power of Money’, History of Economics Review, No 54 (summer),
forthcoming.
Fisher, Irving 1911 [1913]. The Purchasing Power of Money, its Determination
and Relation to Credit, Interest and Crises. New York: Macmillan.
Marget, Arthur 1931. ‘Léon Walras and the “Cash-Balance Approach” to the
Problem of the Value of Money’, Journal of Political Economy, 39(5), pp.
571–600.
Marget, Arthur 1935. ‘The Monetary Aspects of the Walrasian System’, Journal of
Political Economy, 43(2), pp. 145–86.
McLure, Michael 2007. The Paretian School and Italian Fiscal Sociology.
Basingstoke: Palgrave.
Montesano, Aldo 2008. ‘A Restatement of Walras’ Theories of Capitalisation and
Money’, History of Economics Review, 47, pp. 86–109.
Pareto, Vilfredo [1896–97] 1971. Corso di Economia Politica [Cours d’Économie
Politique]. Torino: Unione Tipographico-Editrice Torinese Cours .
Pareto, Vilfredo 1906 [2006]. Manuale di Economia Politica. Edizione Critica,
Aldo Montesano, Alberto Zanni and Luigino Bruni (eds). Milan: EGEA –
Università Bocconi Editore.
Pareto, Vilfredo 1918 [2007]. ‘Economia Sperimentale’, Giornale degli Economisti
e Rivista di Statistica, 28(57), pp. 1–18, translated by Vincenzo Savini and
Rocco Loiacono as ‘Experimental Economics’ in Michael McLure 2007. The
Paretian School and Italian Fiscal Sociology. Basingstoke: Palgrave, pp. 185–
202.
 Pareto’s Manuscript on Money and the Real Economy 197

Pareto, Vilfredo 2005. ‘Note critiche di teoria monetaria’, in Firenzo Mornati (ed.)
Vilfredo Pareto Œuvres Complètes Tome XXXIII, pp. 259–68.
Patinkin, Don 1965. Money, Interest and Prices. New Cork: Harper & Row.
Sensini, Guido 1929. ‘Vilfredo Pareto e la teoria della moneta’, Il Giornale
Economico, reprinted in G. Sensini, 1932. Studi di Scienza Sociali, Roma:
Maglione, pp. 213–15.
Walras, Léon 1874. Éléments d’Économie Politique Pure – 1st Edition. Lausanne:
L. Corbaz & Co.
Walras, Léon 1926 [1954]. Éléments d’Économie Politique Pure ou Théorie de la
Richesse Sociale – Édition Définitive. Paris: R. Pichon et R. Durand-Auzias,
translated by William Jaffé, The Elements of Pure Economics or the Theory of
Social Wealth. Fairfield: Augustus M. Kelly.
This page has been left blank intentionally
 Index
Note: Italicised page numbers refer to text in footnotes.
animal spirits 4, 6, 90, 98
Aristotle 4, 7, 106, 142, 145, 153–56, 160–74
Aristotelian enthymeme 160–63, 173
Augustine 156, 167
Barthes, Roland 153, 165, 167, 171
Berlusconi, Silvio 106–7
bestiary, human nature as 4, 88, 90, 98
Blair, Tony 124, 126–7
Bolshevik Revolution 32, 116
Boudon, Raymond 132, 135
Bourdieu, Pierre 16, 86
Boyer, Pascal 135, 143–4
Bridel, Pascal 178, 181, 189, 190, 191
Bush, George H.W. 124–7
Bush, George W. 125–7
Conservative Party 111, 120, 122–4, 126
Dahrendorf, Ralf 98
Democrats 111, 120–21, 125
dark triad (of socially aversive traits) 92,
99–107
Darwin, Charles 34–5, 135, 136
Democracy 3, 51, 63, 112–13, 125, 128
De Tocqueville, Alexis 132, 148
Durkheim, Émile 50–53, 64, 66, 131–2, 148
Elster, Jon 132, 140, 142, 148
Erikson, Erik 102
economic equilibrium 7, 33, 59–60
fascism 54, 89, 118–19, 127, 170
genetic endowment and socio-economic
success 36–41
Fisher, Irving 177–8, 185, 189
Freud, Sigmund 7, 137–8
Geis, Florence 103–4
genetic similarity theory 96
Giddens, Anthony 96
Gramsci, Antonio 80–82
Great Depression 111, 119, 120
Greene, Robert 87
Habermas, Jürgen 73, 75, 131–2
Hirschman, Albert O. 146, 148, 169–70, 173
Hobbes, Thomas 96, 103
Homer 154, 155
Hume, David 75, 141–2, 145
intense realism 6, 87–9, 99, 107
Jackson, Curtis (aka 50 cent) 87
Kant, Immanuel 73–4, 77, 80, 141–2, 145
Keynes, John Maynard 90, 119, 177
Knight, Frank 85
Knightian uncertainties 85–6
Kobalinksa, Maria 9–11
Labour Party 111, 120, 122–4, 126
Lausanne University, tradition of
economics 177, 188
Lenin, Vladimir Ilyich 32, 119
Lévy-Bruhl, Lucien 144–5
Liberal Democrats 111, 126
lions and foxes 3–4, 6, 15, 34, 89–91, 127,
172
liberalism 73, 91
classical liberalism 78
200 Vilfredo Pareto
English liberalism 2
Italian liberalism 2
liberal moralism 73–4, 79
Machiavelli, Niccolo 1, 3–4, 6, 15, 73–82,
85, 87–92, 98
force and fraud 90–91
Machiavellianism 7, 92, 99, 103–4
Malinowski, Bronislaw 134, 138, 142–5
Mandelbrot, Benoît 22–3, 25, 27
Marget, Arthur 177–8
marketing theory 87
Marx, Karl 3, 16, 22, 32, 73, 80, 93,
112–14, 118, 131–2, 137
Marxism 9, 22, 78, 81–2, 141–2, 146
Michels, Robert 16, 113, 119
iron law of oligarchy 16
Mill, John Stuart 7, 133, 138–48
Mornati, Fiorenzo 178, 193
Mosca, Gaetano 9, 12, 113, 119
Mussolini, Benito 54, 118, 170
narcissim 92, 99–107
Narcissistic Personality Inventory 103
Nazis 118–19, 127
Neurath, Otto 98
Nietzsche, Friedrich 137, 174
Obama, Barack 111, 126
Pareto, Vilfredo
80–20 principle see law of income
distribution
combinations, instinct for 14, 158
combinazione 91
crystallised social forms 89–91, 94,
96
cycles of mutual dependence 22, 33–4
disciplinary isolation 48–9
derivations 5, 7, 10, 14, 17, 26, 33–34,
78, 112, 138, 144, 153, 157–9,
161–3, 166, 171–3
dissimulationist theory 136–7, 140,
146
dysfunctional outcomes 47–71
elites
circulation of 12–13, 15, 21–2,
30–34, 41, 68, 169, 172
degeneration of 7, 90; see also
theory of elite cycles
openness and closure of 3, 117–18
theory of elite cycles 111–29
emotivist theory 135–6, 146, 148
feedback 54, 57–60, 64–71, 104–5
functionalism 63–4
‘graveyard of aristocracies’, history as
12, 91, 95
historical pessimism 1, 3
individualised social forms 89–91, 94,
96
instinctualist theory 134, 136–7, 140,
146, 148
intergenerational mobility 34–5
law of income distribution 3–4, 68–9,
22–7, 169–70
logico-experimental method 5, 153, 156,
158, 160, 164, 168, 174
micro-models 132–3, 136–7, 143, 146–8
middle-range theories 132, 134, 136,
143–8
non-elites 12, 68, 90–91, 115
non-logical thought/conduct 6, 13–15,
97–8, 100, 112–18, 135, 153, 158–62,
166–9, 173, 178
rentiers 100–101
residues 5, 13–17, 31–4, 35, 78, 91–101,
104, 107, 112, 134, 137–43, 157–66,
171
social equilibrium 5, 15, 17, 81, 93–4,
158–9, 171
social heterogeneity 21, 26, 33–5
social mobility 12, 22, 28–9, 35–6,
40–41
social revolutions 30–32
speculators 100–102, 105
sticking points 6, 47–71, 90
theory of aftershocks 55, 57–8
Parsons, Talcott 17, 22, 33, 41, 60–61, 131,
134, 139, 141
patronage 95, 113–14
Plato 4, 7, 74, 145, 153–6, 162, 173
political moralism 6, 73, 76–7, 82
psychopathy 92, 99
quantity theory of money 7, 178–9, 182, 187,
191–4
 Index
Rawls, John 73, 77–80
Reagan, Ronald 121, 123–7
Republican Party 120–21, 125–6
resource scarcity 96, 99
risk 85–107
risk aversion 91, 114
risk taking 91, 101, 124, 126, 127
riskscapes 88–92, 96, 103
Schumpeter, Joseph 3, 21, 27, 30, 31, 33,
35, 112
Servetus 156, 167
Simmel, Georg 132
special interests 53, 57–8, 61, 64, 122
201
Thatcher, Margaret 122–4, 127
thoroughgoing uncertainty 86, 98, 100
uncertainty 6, 85–107; see also
thoroughgoing uncertainty
velocity of circulation of money 12, 179,
181, 183–6
videocracy 106–7
Vietnam War 120–21
Walras, Leon 6–7, 33, 65, 177–80, 188–93
Weber, Max 15, 16, 112–14, 132, 135
Wilson, Harold 120, 122
Winter, David 101–2
World War II 38, 119, 122, 127–8