Wilfredo Pareto
Wilfredo Pareto
Wilfredo Péreto (Vilfredo Federico Damaso Pareto; pronunciation: [vilfreːdo pareːto]; 1848-1923) was an Italian engineer, sociologist, economist, political philosopher and philosopher. He made many important contributions in the field of economics. introduction
In the history of economics, the name of Wilfredo Pareto is recorded as a scholar who first played the role of giving mathematical and scientific support to this discipline, and then worked to accomplish it with historical and sociological insights. It is a remarkable fact of the intellectual life of Pareto who made many material contributions in economics that after establishing mathematical forms in economic analysis, they themselves became dissatisfied with these methods. Except for abstract economic principles, he tried to understand the performance of the economies on the land of historical and socio-political . He used these aspects in the analysis of business cycles, showing how social factors affect savings, labor and consumption, which ultimately impacts the whole economy. They developed sociological theory of economic inertia and growth. He said that economic growth can not be made available till the desire to enjoy its economic fruits, while working hard, has not been adjourned for some time. For this, he recommended the development of economical trends and the development of professional trends along with hard work. They saw that these tendencies softened when economic growth took place and more harmony arose in society. Betting starts to happen and makes a competition to make money fast. But the consumer's confidence in the consumer credit at a peak is rising due to the increase in the confidence of the consumers. As a result, the expenditure is deducted and slow growth occurs in economic growth. But, in the same process, the foundation of economic growth of the future is laid, and once again the trends of saving for the further investment will be borne.
Wilfredo Pareto was the father of the Italian father, who had to spend the exile in Paris due to the opposition of the Italian government's policies. Their middle class family made good arrangements for their primary education and gave them rituals to lead a harsh and simple life. Returning to Italy in 1858, he took an engineering degree. During an engineer's job, Phero made several trips to England and Scotland and during this time he got an opportunity to observe the British economy. They saw how much benefits Britain has to open market policy. He became an active member of the Adam Smith Society and started writing in support of democracy and free trade. Pheroto used to come to sleep in the night. He used the usefulness of this time in the study of political economics and sociology. After retiring, he took advantage of his engineering training and began to express economic analysis in mathematical form. Soon his fame increased and he was appointed to the place of Leon Wallace in Luzana University. Later on, Phero got tired of the narrowing of mathematical methods and tried to test economic activities in the mirror of historical and cultural . From a property inherited from his uncle, he bought a huge bungalow in which he lived with his pet cats alone, like a monk, while living his life while observing the problems of economics.
Apart from giving mathematical support to economics, Parito is also known for his three other contributions. He developed the rule of income distribution, which is still known by his name. He removed the attention of economists from cardinal utility and turned towards the Ordinal utility. He also developed an examination method through which the economic results could be improved or not. It is also known as the principle of optimal circumstance that is presented by PATRO.
Pareto studied the inequalities of income in different countries and found that this income distribution is in accordance with an intuitive pattern. He ordered families to be calculated according to their income and then recorded their income and analyzed them. As a result, it turned out that income is not increasing in proportion or arithmetically. In the sequence of things from the poorest family to the richest family, income has been increasingly geometrical. If income increases by arithmetic, then the family of thirteenth number earns more than twenty-five percentages from the family of twelfth and this sequence will get between the hundredth and ninety nine families. But the geometrical rate of income growth was saying that the family of the thirteenth house was earning ten percent more than the family of twentieth space, whereas the family of fifty-fifths family, fifty percent more than the 40th house and the hundredth place family, hundred percent from the ninety-nine Was making more money.
Pareto looked at income distribution in America and many European countries and found that the situation of asymmetry is roughly the same as a pattern. So he called it a rule. Pareto thought that oddity would continue in the same way because the mercenaries would not be able to change the pattern of distribution by taking advantage of their political status. There was a lot of controversy with this rule of Pareto, because many socio-political issues had been associated with it, considering which economists generally shouted. However, this discovery of Parito also found the status of an important progress in economic science. Before Pareto, an economist did not analyze the statistics of the emancipation of many countries of the world.
By giving priority to the cardinal utility of the Ordinal Utility, Parito urged economists not to exceed expectations from the consumer. According to the cardinal utility, not only was the consumer expected to give priority to the other on one object, but also know what would be the priority of that priority. However, according to the principle of the Ordinal Utility, the only priority should be given to the consumer. In practice, the difference between cardinal and ordinal utility can be understood in such a way: If a consumer gives priority to mangoes above pineapple, it would be wrong to expect to know that he considers mangoes to be two hundred percent useful with pineapple or One and a half feet The Consumer Buyer does not provide any such information. The result of Phero's insistence was that it was not necessary to measure the usefulness used by different people. Jeremy Bentham and James Stuart Mill had this confusion in the philosophy of utilitarianism developed. The result of Parito's formulation was that efforts to scale the utility measure stopped. Similarly, the attitude of comparisons of utility was also abandoned in interpersonal relationships. It was quite understandable that if two people are exchanging two things, then the usefulness of the things they get for them is much higher than what they are giving. If not, why would they not exchange it? Paratto's third contribution came out as the principle of optimal circumstance. While exploring the optimum situation of economic affairs, Parrot arrived at the conclusion that some economic results could not be improved in any way. If the situation of one person is to be improved then it will have to reduce the status of another person. That is, there will be no improvement in the situation. Parito said that two people do any transaction only when both are expected to benefit. If the profit is for any one, then there will be no exchange. Despite such a situation, if there is an attempt to redistribute goods by putting pressure, then there will be no improvement in the situation or financial performance. Therefore, the status of free exchange in the market can only be optimal.
The consequences of this theory of PETRO were inevitable in the policy sector. It was also used for the promotion of welfare economics. According to this, economic well-being can be improved if every person gets better without any loss. Due to the optimum conditions that could be created, it was thought that the marginal rate at the consumers' level could be replaced by consumption, by the same marginal rate, the producers would shift their production. According to Pareto, only marginal cost of all production processes can be equal to marginal earnings if this happens. On the other hand, economists in the thirties also had the view that economical performance can be evaluated through this principle of adaptable without using costly discretion. Therefore, he spent a lot of brainstorming on this question and tried to figure out that in some special circumstances, if this principle fails to work, then it is not. This principle of PETO is used to give tax concessions to the rich: If the conquerors get the concessions, then they will be able to invest more and the economic boom will come and the poor will also get better as a result. In this situation, it will be called Parito-Superior. If there is no economic bounce from the tax concessions, then the revenues will be reimbursed from somebody's pocket. Maldives will be beneficial and the common man's pocket will be empty. This will be considered as a para-optimal.
Criticizing Pareto Optimael, Amartya Sen has claimed that the outcome of this theory can not be called neutral or scientifically. This principle is based on the precedence that if a change makes the person happy, then the society is also happy with it. This recognition can not be considered true. Second, this principle is not good in all circumstances. For instance, the situation of the famine is Parto Optima and the redistribution done to save the public from hunger will go against Parito Optimal.
1 Renato Cyrilo (1979), The Economics of Wilfredo Perrato, Frank Cass, London.
2. H. Charles Powers 1987 (), Wilfredo Pareto, Sage Publications, Newbury Park.
3. Joseph Schumper (1949), 'Wilfredo Pareto 1848-1923', Quarterly Journal of Economics, 63.
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