Manual of Political Economy: A Variorum Translation and Critical Edition

by Vilfredo Pareto, John Somerset Chipman, Michael McLure

Vilfredo Pareto's Manual of Political Economy is a "classic" study in the history of economic thought for many reasons, the most noteworthy of which include the setting of general equilibrium economics within a choice theoretic framework based on the opposition between tastes and obstacles; the definitive formulation of economic efficiency, including the surplus approach to collective welfare; the technically flawed but nonetheless insightful treatment of path dependence in consumer theory; and the introduction of non-competitive market analysis to the general equilibrium economics. In so doing, Pareto's general study of economic equilibrium not only substantially extended the contributions to economic theory made by Leon Walras, his predecessor in the Chair of Political Economy at the University of Lausanne, it did so in a manner that was often contrary to Walras's own thinking on the formalisation of economic theory.
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This English language "critical edition" of Pareto's Manual of Political Economy - a revised and extended translation of the 'Edizione critica' published in Italian in 2006 - is a very significant book for two main reasons. First, it is the only variorum translation of the Italian language Manuale di Economia Politica, originally published in 1906, and the subsequent French language Manuel d'Economie Politique, originally published in 1909. Second, it includes extensive contributions from the editors including annotations, to clarify particular points in Pareto's text; editors' notes, to critically reflect on major themes in Pareto's text and to draw attention to the historical influences that led to their development and their anticipation of, or influence on, subsequent ideas that emerged in economics; and notes to the 1909 mathematical appendix, to highlight the mix of insight and imperfection in Pareto's mathematical economics.

Genres: Economics, Philosophy, Sociology

707 pages, Kindle Edition

First published January 1, 1909

About the author

Vilfredo Federico Damaso Pareto, born Wilfried Fritz Pareto, was an Italian engineer, sociologist, economist, political scientist and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices.

He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He also was the first to discover that income follows a Pareto distribution, which is a power law probability distribution. The Pareto principle was named after him and built on observations of his such as that 80% of the land in Italy was owned by 20% of the population. He also contributed to the fields of sociology and mathematics.

Reviews

[Tyler · Rating 4 out of 5]

So I'm finished with this book. I've counted three different sets of errors, and most of them are simple substitution errors. I don't know what to do with this. On the one hand I think that Pareto was an interesting man, he had many interesting theories. But I don't agree that every political system was inherently an aristocracy (this goes against Plato, Rousseau, and my opinion as well). His thoughts on price-setting being a competition of worker syndicates and producers however, on much thought, is absolutely correct. And while this runs contrary to almost any economist alive, I think I'll keep and retain this theory with me for the duration of my literary life. I'll remember the theories developed here, but if I can advise you at all concerning Vilfredo Pareto: he makes some fundamental mathematical errors in the mathematical appendix, and you WILL need to understand calculus in order to grasp why these are errors. I've learned quite a bit of math, even, along the way. But if someone is making mistakes along the lines of algebraic reasoning I do not want to read any further, so I did not read the full appendix. However, the 80/20 rule is in here. But it has nothing to do with land, the 80/20 rule is actually with regards to production (as normal, everyone in academia misinterprets the original intention). It is dealing with 'Type II' phenomena as Pareto puts it. He finds that 80 percent of production is provided by 20 percent of producers. So therefore you see that the lines of exchange may dip considerably outside of their equilibrium points in favor of the different 'terminal points' where it would normally stop under 'Type I' phenomena. You'd need to read the book to understand what I'm talking about.

Would love to leave it five stars, but I cannot because I just plain do not agree with some of the things presented here, and also I see that some errors are made. Walras is clearly the superior Lausanne school economist, because you'd be hard pressed to find an error in his work, and his thought process is beautifully well thought-out. As is Pareto's, but I found the best realizations came from analyses of indifference curves graphs with him. When Pareto dips into the summation and equation-based mathematical analysis like Walras, it regrettably does get a little vague as he forgets to define terms. Good book though, by a real economist and sociologist. Influenced a lot of 20th century thought.

[Cyprien Saito · Rating 5 out of 5]

A beginning of the formalist mathematical economics.