IDEAS home Printed from https://ideas.repec.org/a/spr/inrvec/v71y2024i3d10.1007_s12232-024-00462-x.html
   My bibliography  Save this article

Pareto and pure economics: analyses subsequently accepted and others neglected

Author

Listed:
  • Aldo Montesano

    (Bocconi University
    Accademia Nazionale dei Lincei)

Abstract

Pure economics, as presented by Pareto in the Manual of Political Economy, has only a scientific purpose to be evaluated according to the agreement with reality, takes into account only economic actions, and its object is the determination of equilibrium, represented by the compatibility of agents’ choices. The choices depend on the agents’ tastes (preferences), the obstacles (constraints) to which they are subject, and the conditions in which they operate. Pareto’s pure economics does not have the purpose of determining prices, it is therefore not a theory of value, since exchanges can have variable prices. Pareto distinguishes agents into three types: those without market power whose choice is obliged to belong to a pre-assigned path (constraint), agents with market power who impose to the first type agents a path, and agents who represent the socialist state. The two main contributions introduced by Pareto in pure economics and subsequently accepted are discussed. They are the adoption of the ordinal function of utility and the notion of Pareto optimum. The general equilibrium theory presented by Pareto does not consider only, or even principally, the competitive equilibrium, but also includes other market rules, such as monopolies, duopolies, cartels, and the collectivist economy. Particular importance is given by Pareto to production with big overheads, which determine a decreasing average cost. The analysis proposed by Pareto anticipates many results which were successively introduced in the economic literature.

Suggested Citation

  • Aldo Montesano, 2024. "Pareto and pure economics: analyses subsequently accepted and others neglected," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(3), pages 537-552, September.
    • Handle: RePEc:spr:inrvec:v:71:y:2024:i:3:d:10.1007_s12232-024-00462-x
    DOI: 10.1007/s12232-024-00462-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12232-024-00462-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12232-024-00462-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manuela Mosca, 2008. "On the origins of the concept of natural monopoly: Economies of scale and competition," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 15(2), pages 317-353.
    2. Henry Schultz, 1935. "Interrelations of Demand, Price, and Income," Journal of Political Economy, University of Chicago Press, vol. 43(4), pages 433-433.
    3. Peter C. Dooley, 1983. "Slutsky's Equation is Pareto's Solution," History of Political Economy, Duke University Press, vol. 15(4), pages 513-517, Winter.
    4. Aldo Montesano, 2022. "On the economic foundations of decision theory," Theory and Decision, Springer, vol. 93(3), pages 563-583, October.
    5. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    6. Aldo Montesano, 2008. "A Restatement of Walras’ Theories of Capitalisation and Money1," History of Economics Review, Taylor & Francis Journals, vol. 47(1), pages 86-109, January.
    7. Antonio Gay, 2006. "Equilibrium without prices: A central issue in pareto’smanuale," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 53(4), pages 531-537, December.
    8. Marchionatti, Roberto & Gambino, Enrico, 1997. "Pareto and Political Economy as a Science: Methodological Revolution and Analytical Advances in Economic Theory in the 1890s," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1322-1348, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hans Haller, 2010. "Substitution and Income Effects," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 5, Edward Elgar Publishing.
    2. Chechelski, Piotr & Grochowska, Renata & Łopaciuk, Wiesław & Ślązak, Emil & Wasilewski, Adam & Wigier, Marek, 2012. "Development est public policy support in the food economy – the example of Poland," Multiannual Program Reports 164845, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    3. Kazuyuki Sasakura, 2016. "Slutsky Revisited: A New Decomposition of the Price Effect," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(2), pages 253-280, July.
    4. Wright, Austin L. & Sonin, Konstantin & Driscoll, Jesse & Wilson, Jarnickae, 2020. "Poverty and economic dislocation reduce compliance with COVID-19 shelter-in-place protocols," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 544-554.
    5. Jolian McHardy & Michael Reynolds & Stephen Trotter, 2012. "The Stackelberg Model as a Partial Solution to the Problem of Pricing in a Network," Working Paper series 19_12, Rimini Centre for Economic Analysis.
    6. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    7. Stephanie Rosenkranz & Patrick W. Schmitz, 2007. "Can Coasean Bargaining Justify Pigouvian Taxation?," Economica, London School of Economics and Political Science, vol. 74(296), pages 573-585, November.
    8. Vadim Borokhov, 2014. "On the properties of nodal price response matrix in electricity markets," Papers 1404.3678, arXiv.org, revised Jan 2015.
    9. Yuzhou Jiang & Ramteen Sioshansi, 2023. "What Duality Theory Tells Us About Giving Market Operators the Authority to Dispatch Energy Storage," The Energy Journal, , vol. 44(3), pages 89-110, May.
    10. Daniel Sutter & Daniel J. Smith, 2017. "Coordination in disaster: Nonprice learning and the allocation of resources after natural disasters," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 469-492, December.
    11. Hanming Fang & Peter Norman, 2014. "Toward an efficiency rationale for the public provision of private goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 375-408, June.
    12. Cherry, Barbara A., 2014. "Historical mutilation: How misuse of 'public utility and 'natural monopoly' misdirects US telecommunications policy development," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106881, International Telecommunications Society (ITS).
    13. Gan, Li & Ju, Gaosheng & Zhu, Xi, 2015. "Nonparametric estimation of structural labor supply and exact welfare change under nonconvex piecewise-linear budget sets," Journal of Econometrics, Elsevier, vol. 188(2), pages 526-544.
    14. Peterson, Jeffrey M. & Boisvert, Richard N. & de Gorter, Harry, 1999. "Multifunctionality and Optimal Environmental Policies for Agriculture in an Open Economy," Working Papers 127701, Cornell University, Department of Applied Economics and Management.
    15. Tian, Guoqiang, 2009. "Implementation of Pareto efficient allocations," Journal of Mathematical Economics, Elsevier, vol. 45(1-2), pages 113-123, January.
    16. Ahmad Naimzada & Marina Pireddu, 2019. "The first fundamental theorem of welfare in a general equilibrium evolutionary setting," Working Papers 415, University of Milano-Bicocca, Department of Economics, revised 06 Jun 2019.
    17. Gajanan Panchal & Vipul Jain & Naoufel Cheikhrouhou & Matthias Gurtner, 2017. "Equilibrium analysis in multi-echelon supply chain with multi-dimensional utilities of inertial players," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(4), pages 417-436, August.
    18. Aldasoro, Iñaki & Delli Gatti, Domenico & Faia, Ester, 2017. "Bank networks: Contagion, systemic risk and prudential policy," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 164-188.
    19. Gatti, Nicolas & Cecil, Michael & Baylis, Kathy & Estes, Lyndon & Blekking, Jordan & Heckelei, Thomas & Vergopolan, Noemi & Evans, Tom, 2023. "Is closing the agricultural yield gap a “risky” endeavor?," Agricultural Systems, Elsevier, vol. 208(C).
    20. Aldo Montesano, 2018. "Social welfare for an economy of angelic agents," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(2), pages 185-200, June.

    More about this item

    Keywords

    Pure economics; V. Pareto;

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:inrvec:v:71:y:2024:i:3:d:10.1007_s12232-024-00462-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.