Pareto, Vilfredo, << pah REH toh, veel FRAY doh, >> (1848-1923), was an Italian sociologist and economist known chiefly for his theories on political behavior. Pareto believed that people base their political decisions and all other actions on emotion, instinct, and similar drives—rather than reason. He also maintained that all societies are governed by a small group of rulers called an elite. According to Pareto, the ruling elite is continually overthrown and replaced by people from the lower ranks, who become the new elite. He called this process the circulation of elites.
In economics, Pareto theorized that the amount of consumer satisfaction with a product cannot be measured. However, consumers can rank products in order of preference, unless they are indifferent about which of two or more products they buy. This idea led to the development of indifference analysis, a method of studying consumer behavior. Pareto also developed new ways to apply mathematics to economic problems.
Pareto was born on July 15, 1848, in Paris. He worked as a civil engineer before taking up sociology and economics. Pareto’s books include A Manual of Political Economy (1906) and The Mind and Society (1916). He died on Aug. 19, 1923.
