Download The Route Not Taken: Pareto`s Model of Social Mobility

Economic Inequality, Pareto, and
Sociology: The Route Not Taken
François Nielsen
University of North Carolina – Chapel Hill
Revised February 2006
Word count: 7931
Keywords: income inequality, Vilfredo Pareto, circulation of
elites
To appear in a special issue of American Behavioral Scientist
edited by John Myles and Martina Morris
Address all correspondence to François Nielsen, Department of Sociology, University of North Carolina, Chapel Hill
NC 27599-3210. Email [email protected]. I am
grateful to my late teachers Henri Janne and Jean Morsa
for giving me helpful advice on this project, a long time ago.
1
Economic Inequality, Pareto, and
Sociology: The Route Not Taken
Abstract
Economist and sociologist Vilfredo Pareto (1848–1923) developed a general theory of social inequality inspired by his
discovery of similarities in the shape of the income distribution across societies. Pareto’s approach is characterized by
(1) a focus on individual, continuous income variation rather than discrete classes; (2) attention paid to the entire
socio-economic distribution rather than summary statistics; (3) an emphasis on social heterogeneity (labor supply)
rather than a view of social structure as a collection of empty places (labor demand); and (4) a conception of the inequality structure – and movements of individuals within it –
as resulting from the distribution of human abilities interacting with a structure of opportunities (i.e., a structure of
social selection). Pareto’s vision -- part of the common patrimony of economics and sociology -- foreshadows emergent
approaches to socio-economic inequality.
2
Economic Inequality, Pareto, and
Sociology: The Route Not Taken
The history of social thought resembles the old graduate
library with its tortuous stacks crumbling under the weight
of dusty tomes full of forgotten but surprising ideas more
than the undergraduate library with its luminous shelves of
received contemporary theories beckoning to younger generations. In this paper I will present an overview of the
work of engineer turned economist turned sociologist
Vilfredo Pareto (Paris 1848 – Céligny, Switzerland 1923).
Pareto’s work, while largely confined to the dusty shelves of
the old graduate library, represents a rare conjuncture in
which the issue of economic inequality and the combined
fields of economics and sociology all came together. I will
argue that Pareto’s intellectual evolution, as it progressed
from a strict focus on the shape of the distribution of income to a broader, dynamic conception of social hierarchies
(further specified into the well-known theory of the circulation of elites), presents several points of contemporary value
for understanding the late 20th Century inequality upswing
that has affected advanced industrial societies such as the
UK and the US. I will try to show that the fields of economics and sociology have intellectual connections in relation to
economic inequality that go back a long way, despite apparent differences in basic credo and technical virtuosity.
Thus the apparent lateness of sociologists – compared to
economists – in tackling the inequality upswing that Morris
and Western (1999) diagnosed may be due in part to choices made a long time ago by the field of sociology – toward a
conception of economic inequality as arising from a structure of empty places reflecting systemic requirements for
different kinds of positions (the labor demand side), and
away from a consideration of social heterogeneity, i.e. the
distribution of talents and skills in the population (the labor
supply side) (Myles 2003).
Revisiting Pareto’s early attempt to elucidate the structure of income inequality produces a number of theoretical
glimpses well worth dusting off today. Had the route suggested by Pareto’s own intellectual evolution been better
absorbed by the field of sociology, it is likely that our understanding of current inequality trends would be at once
more advanced and more compatible with that of economists. Some of the themes developed in the paper are the
following. First, as Pareto was both an economist and a sociologist, his contribution can be claimed by both fields and
thus provides some grounds for solidarity, rather than rivalry, between the two disciplines. Second, because Pare-
3
to’s mathematical and statistical skills were well beyond
those of the average social scientist of his days (including
economists), and because his theoretical thinking was
closely informed by a quantitative perspective, much of Pareto’s contribution, including the part relevant to income
inequality, has been misunderstood or ignored by contemporary and later generations of social scientists (Allais
1968; Parsons 1968). The close association between mathematical formalism and theory and the unbroken theoretical thread that winds through Pareto’s entire work imply
that his sociology cannot be properly understood without
familiarity with his economic writings and at least an informal sense of the mathematical vision that underlies
them (Busino 1967). Third, within Pareto’s own intellectual
evolution one finds the outline of a theoretical perspective
that links the bare statistical regularities in the shape of
the income distribution to a model of the social structure
that is inherently continuous (rather than postulating discrete classes) and that integrates mechanisms of demand
(related to the division of labor) and of supply (related to
human heterogeneity).
In the next section I will briefly outline Pareto’s contribution to understanding income inequality and his increasingly generalized use of the income distribution (and the idea
that individuals are constantly moving up and down within
this structure) as a parable for other kinds of structured
social inequalities, including the distribution of political
power and the circulation of governmental elites. Later sections will develop a number of points in which Pareto’s work
ties in with current theoretical preoccupations concerning
income inequality and contributes to our understanding: (1)
the waning influence of the notion of discrete social or occupational classes; (2) the emerging focus on the entire distribution of economic rewards, and its shape, rather than
summary statistics such as inequality indices; (3) the
emerging realization of the importance of social heterogeneity (Pareto’s term, arguably equivalent to the concept of the
supply side of labor; Myles 2003); and (4) the emerging conception of the structure of inequality as produced by the
structure of human abilities and skills interacting with a
structure of opportunities (i.e., a structure of social selection).
Pareto’s Morphological Schema
Schumpeter (1951) used the expression morphological
schema to refer to the parts of Pareto’s work dealing with
income inequality, social stratification, social mobility, and
the celebrated theory of the circulation of elites. This section discusses in turn Pareto’s work on income distribution,
4
his extension of the income distribution model to the general social structure, and finally to the circulation of elites.
a. Distribution of Income
As Aron (1967: 461) notes, Pareto’s more specifically economic work on the distribution of income is at the root of
his broader sociological conception of the social structure.
Much of the relevant materials on this topic are found in
Pareto’s first economics treatise (Pareto 1897: §957ff and
the important note 2 to §962 misplaced on p. 461 of the
additions; see also Pareto 1965).1 A historically more detailed account than the one presented here is in Busino
(1967: 27-34).
Pareto’s point of departure was empirical. Toward the
end of the 19th century agencies in England and other industrial countries had begun releasing income distribution
statistics giving the numbers of taxpayers in different income brackets. A discussion of these data by LeroyBeaulieu (1881) greatly influenced Pareto. Pareto himself
collected additional data sets, increasing the range of places
and times of societies he could compare, occasionally finding such gems as the distribution of prices paid for an indulgence2 – the price of which varied according to the social
rank of a person – in Peru at the end of the 18th century.
Table 1 shows an example of such data, for Great Britain
and Ireland in 1893-1894 (Pareto 1897: §958).
------ Table 1 about here -----To facilitate comparisons between societies with different
population sizes and currencies Pareto tried to find a simple
mathematical expression that would fit the data for different countries and times. Having defined x as a given income, and N as the number of taxpayers having an income
greater than x, and plotting N against x, he discovered a
remarkable similarity among these reverse cumulative frequency distributions for different countries and times: if
one plots the logarithm of N against the logarithm of x the
points approximately trace a straight line with negative
slope. Figure 1 shows the graphs obtained in this way for
Great Britain and Ireland. The graph is higher for Great
Britain because of the larger population (larger Ns), but the
slopes for the two countries are approximately the same.
------ Figure 1 about here -----Empirical linearity of the (log x, log N) relationship corresponds to a relationship between N and x given by
(1) log N = log A –
x
Pareto subdivided his book-length works into numbered paragraphs. It is customary to use these numbers for reference.
2 An indulgence was the remission of temporal punishment for
sins granted by the Roman Catholic Church.
1
5
where the slope α and intercept (log A) can be estimated
from the distribution data by ordinary least squares (i.e., by
fitting a simple linear regression to the data of Table 1).3
By eliminating logarithms in Equation (1) one obtains the
reverse cumulative distribution function
(4) N = A / x
which gives, for any x, the number N of taxpayers (in general, income-receiving units) with incomes greater than x.
To obtain the probability distribution function it is necessary to differentiate with respect to x and change the sign
(as the distribution is cumulated backward), so that
(5) y dx = - (dN/dx)dx
yielding the function
(6) y
A/xα+1
where y denotes the probability density for income x. The
function is shown in Figure 2, where the shaded area represents the number of incomes between x1 and x1+dx. Note
that Pareto switches the x and y axes in Figures 2, to show
incomes on the vertical axis and thus (presumably) better
evoke the image of the social “pyramid” (the shape of which,
he feels, is more like that of an arrowhead or a top than a
pyramid). The straight-line segment with shallow slope
(corresponding to small incomes) at the base of the pyramid
is not part of the graph of Equation (6). It is added by Pareto on the supposition that the frequency of incomes diminishes rapidly near the minimum level of subsistence, as it is
impossible (by definition) for individuals to survive below it.
------ Figure 2 about here -----Most of Pareto’s data sets can be fitted closely by a function of the type of Equation (6). Furthermore the estimated
value of α varies relatively little among the different data
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”
(Pareto 1897: §958).
The apparent universality of the shape of the distribution
of income as it follows what was later labeled a Pareto distribution, and even the similarity in values of the parameter
as those of England, of Ireland, of Germany, of Italian citystates, and even of Peru” (Pareto 1897: §960) profoundly
Pareto found that in a few cases a better fit was obtained
with the functions
(2) log N = log A (3) log N = log A – βx
3
6
impressed Pareto. He sensed the existence of some general
mechanism underlying the shape of the distribution. The
most obvious hypothesis was that the distribution is the
result of chance, which for him was “…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” (Pareto 1897: §957). Pareto took pain
demonstrating that the probability distribution of income
cannot be assimilated to the distribution of sums of independent causes, which tends to a normal distribution (by
the Central Limit Theorem) (1897: note 1 to §962).4
An alternative hypothesis is that the distribution of income is the result of social heterogeneity, i.e. differences in
the probability of gaining income across categories of individuals (with number of categories set as large as one
wants) corresponding to differences in “eugénique” qualities
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
(1897: p.461, note 2 to §962).5 But Pareto does not find his
own derivation compelling, as it depends on the assumption
of perfect mobility of individuals in society: “[b]ut 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 the disposition of obstacles that oppose the
expression of these capacities.” (1897: p.461, note 2 to
§962, emphasis added).
The next subsection describes how Pareto develops this
insight into a more elaborate, dynamic model of social mobility. The uniformity discovered by Pareto in income statistics has had its own fate in the social sciences. It was
later discovered that a large number of phenomena obeyed
“Pareto’s Law”, i.e. had distributions that could be well fitted by a Pareto function. These include the distribution of
the populations of towns and cities, the frequency of use of
words in the lexicon, industrial concentration, number of
articles published by sociologists in professional journals,
and various other geographical and linguistic statistics (Zipf
1949). A vast literature has attempted to propose models
The role of chance in generating the distribution of income was
the object of a dispute between Pareto and contemporary economist Francis Y. Edgeworth, who held that the distribution of income was better fitted by a lognormal distribution.
5 Footnote to §962 is misplaced on p. 416 of the book, and thus
has been missed by a number of commentators, although not by
Aron (1967). It represents an astonishingly modern approach to
explaining a statistical distribution as the result of a stochastic
process.
4
7
that account for the ubiquity of the Pareto distribution.6
The strong attraction felt by some scientists for the mystery
and potential theoretical value represented by such uniformities, as well as the rather independent position of the
phenomenon with respect to mainstream economic theory,
was well expressed by Schumpeter: “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” (1951: 121).
b. Mobility Within the Social Pyramid
The evolution of Pareto’s ideas on income inequality and
social stratifications can be seen in his later major economics textbook Manual of Political Economy (Pareto 1909,
1971) (hereafter Manual). Here he develops his earlier intuition 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 differ from the normal
distribution of biometric traits – into a more general and
more dynamic model of the social structure. Figure 3,
adapted from Pareto (1971: 287, Figure 56), illustrates this
generalized conception. The distribution is now used as a
representation of the social hierarchy in general, not only
the distribution of income. A pointed tip has been added to
the pyramid (compare with Figure 2), as well as a more realistic, if speculative, bottom (as data on the bottom part of
the income distribution were usually unavailable in Pareto’s
days). Using the analogy of the attribution of exam scores
from 0 to 20 (in the continental grading system) as an analogy, he explains the flattened bottom of the pyramid by the
fact that there is a minimal level of income under which
subsistence is not possible, just like a professor 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.
------ Figure 3 about here -----Pareto speculates, in relation to Figure 3, that while the
shape of the upper part of the income distribution is strikingly similar across societies, there may be more diversity
in the lower part. If one postulates that there is a minimum
In sociology see Angle (1986) and Nielsen (1995) and literature
cited there. It is interesting that Angle’s simulation model excludes social heterogeneity and thus continues in a way the old
Edgeworth-Pareto debate on the role of chance in generating the
distribution of income.
6
8
income oa below which individuals cannot survive, then in
a society typical of classical antiquity, for instance, 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 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 passage of the Manual in which Pareto interprets
the income distribution as a representation of the social
structure is worth quoting at length:
The area ahbc, Figure [3], 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: αριστος = best) are developed; from
this region come the elements who rise to the higher
region [C]. Once there their descendants degenerate;
thus this region [A] 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 1971: 286-288)
9
A sociologist today might interpret Pareto’s discussion in
terms of the more familiar (albeit still mysterious) concept
of opportunity for achievement. Social stratification researchers customarily assume that achievement opportunity declines monotonically from the upper strata to the bottom ones. Pareto makes the rather different claim that opportunity varies non-monotonically along the social scale,
with individuals in the middle strata having greater opportunity than both the lower and upper strata. This prediction follows logically from Pareto’s attention to the intensity
of social selection as a function of position in the social hierarchy. A less talented individual born to a high stratum
may be as effectively prevented by the absence of selection
from “achieving” the low social status corresponding to his
limited endowments as a talented individual born to the
lowest strata is prevented from achieving the high social
status corresponding to his potential. In both cases opportunity for achievement is low, if one understands “opportunity” as opportunity to achieve a status commensurate
with one’s potential – high or low – given one’s intrinsic
qualities, and thus as entailing both upward and downward
movements in the social structure (Guo and Stearns 2002).
If one could measure the degree of opportunity characterizing a particular social group – or, ideally, opportunity
as it varies continuously along a status dimension such as
income – one could test Pareto’s conjecture against the traditional assumption that opportunity increases monotonically from lowest to highest stratum. Conceptualizing and
measuring opportunity for achievement is itself a huge unresolved issue (for recent developments see Guo and Stearn
2002; Nielsen forthcoming). There are some crude indications that Pareto’s conjecture might be correct. A phenomenon known since at least Blau and Duncan (1967: 47) is
that the dispersion of occupational statuses of sons is lower
for fathers in both high and low occupational categories,
greater for sons with fathers in middle status categories.
The same pattern is found for both inter- and intragenerational mobility among wealth categories (Keister
2005). Blau and Duncan (1967) explain this pattern in
terms of the social distance among occupational groups:
individuals born to fathers in middle categories are closer to
a larger number of different categories than individuals
born to fathers in extreme categories -- high as well as low - whose movements are limited either above or below. Alternatively, one could view the pattern as supporting Pareto’s conjecture of a higher degree of social selection in middle categories as compared to extreme ones. As indices of
social mobility of the type Blau and Duncan (1967) use do
not control for possible differences in the distributions of
talents of sons born to different occupational categories, in10
terpretations in terms of achievement opportunity are delicate in any case (Eckland 1967; Nielsen forthcoming).
c. Distribution of Power and Circulation of Elites
The previous discussion shows how Pareto’s thinking on
social stratification evolved from roots in income distribution statistics by generalization (or extension) to general aspects of the social hierarchy. Successful 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 behavior that underlies economic theory (and
which he had himself much contributed to develop) that are
beyond the scope of this paper (Busino 1967; Nielsen 1972).
One consequence of this shift was another extension of Pareto’s model of the social hierarchy – as consisting of a distribution with a relatively stable shape within which individuals are in constant movement as the result of selection
processes – to the distribution of political power in society.
This new extension produced 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 Treatise of Sociology
(1917-1919: §§2027ff)7 (hereafter Treatise) Pareto imagines
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
non-elite. The governmental elite is the subset of the elite
comprising individuals who “…directly or indirectly play a
notable role in government” (§2032). As Pareto warns repeatedly, the distinction between elite and non-elite 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 stable curve representing the
distribution of income contains within it and conceals the
constant movement of individuals and families along the
income scale, a similar 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: (1) a continuous infiltration of elements from the governed class into the elite, or (2) a sudden
revolution replacing at once the major part of the governing
elite. Pareto’s almost poetic image is that of a slow moving
The Traité de sociologie générale was first published in English
under the title Mind and Society (Pareto 1935).
7
11
river with periodic floods: “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” (§2056).
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
(again using Schumpeter’s 1951 terminology), which deals
with Pareto’s theory of action and of human nature (Lopreato 1965). Detailed discussion of the psychosocial
schema is beyond the scope of this paper, but to simplify
greatly Pareto uses 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: “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 capable of maintaining 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” (§2057).
A close reading of the 18 pages (§§2025-2059) of the
Treatise devoted to the general theoretical exposition of the
circulation of elites reveals that there are two distinct circumstances that can produce a revolution, which are alluded to elliptically in the passage just cited as “following a
slowdown in the circulation of elites, or for some other
cause”. These circumstances are the following (Nielsen
1972).
(1) 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 the life of privilege protects
the incapable. The absence of effective intergenerational
transmission of governing talent is crucial here; thus “[i]f
human aristocracies were like choice breeds of domestic
animals, that reproduce a long time with about the same
12
traits, the history of the human race would be entirely different from what we know” (§2055).8
(2) Rapid circulation of the elite, but one bringing to the
governing class individuals or families selected according to
social criteria other than those corresponding to the aptitudes needed to maintain themselves in power. An example
used by Pareto is that of the introduction of industrial protection in a country. Individuals benefiting from industrial
protection (such as owners of protected industries, labor
leaders, and politicians allied with them) will be those with
an aptitude for economic and financial activities, and a
large number of them will enter the governing elite. The
elite will thus become enriched with individuals who have a
propensity to use “combinations”– legal and financial maneuvering and ideological persuasion – rather than force.
When this proportion becomes too high the elite may no
longer be able to maintain its political domination.
The Route Not Taken
Pareto’s work constitutes an interesting conversation piece
in comparing economic and sociological approaches to economic inequality. Previous sections have described Pareto’s
intellectual evolution on the issue from his discovery of
mysterious uniformities in the shape of the distribution of
income across societies that differ widely in their economic
bases, levels of development and cultures, to a generalized
view of the social structure as represented by a relatively
stable distribution of resources within which individuals
are constantly moving up and down, and finally to his even
grander conception of the circulation of elites and the succession of aristocracies. Given that Pareto himself moved
from the field of economics to sociology during his career,
and is sometimes considered one of the founding fathers of
sociology, one would have thought that his work would
have placed the issue of economic inequality squarely within the purview of sociology.9 In fact, there are a number of
reasons why sociologists moved away from this quest. In
this section I will discuss a number of ideas that were already explicitly formulated in Pareto’s work, that were
sometimes more readily accepted by economists, and that
seem worth unearthing by sociologists as they pay renewed
Pareto’s reference to the imperfect transmission of genetic traits
may be related to Francis Galton’s discovery of the phenomenon
of regression to the mean in his studies of heredity of the late
1880s (see Stigler 1986: 265--299).
9 A tiny but perhaps significant piece of trivia is that standard
French dictionary Petit Larousse Illustré describes Pareto as “sociologue et économiste”, seemingly giving pre-eminence to the sociological contribution.
8
13
attention to the distribution of income. The evolution of
ideas since Pareto’s time may have made the broader intellectual Zeitgeist today ripe for such revisionism. As Pareto
was a sociologist, as well as an economist, we can derive
some satisfaction as sociologists in the thought that we are
not in any way imitating economists; as sociologists we
have an inherited intellectual claim to these ideas.
a. What! No Classes?
As Myles (2003) has correctly argued, part of the problem
sociologists have with income inequality is that income is
an inherently continuous quantity that does not fit well
with the notion of discrete (or discrete-izable) social classes
that many sociologists feel comfortable with. No discrete
classes are to be seen in income distribution statistics, except for the arbitrary brackets used by the data collector.
The problem is more than methodological or one of mental
imagery. The existence, actual or potential, of discrete social classes is a sine qua non of any political or moral view
that links social science enquiry with a vision of future social justice brought in by a proletarian revolution. The absence of readily visible social classes may be a disappointment within this perspective. Even when Pareto comes
closest to a notion of discrete classes, in his theory of the
circulation of elites, his approach would still feel threatening to one with socialistic ideals, because of Pareto’s irreducible Machiavellian cynicism. If one were to try identifying the non-elite as somehow equivalent to the proletariat
to salvage a proletarian revolution scenario, Pareto would
swiftly challenge such an illusion. He would presumably
point out that, first, challengers of the elite typically themselves originate in the middle classes or even in the traditional elite, and only rarely in the most disfavored strata;
and, second, that leaders of revolutionary movements challenging the incumbent elite typically do not emphasize their
own self-interest in taking over power; rather they veil their
challenge in an ideology that presents future victory as one
for the people as a whole, or at least for a large segment of
the population.10
Studying the distribution of income encourages a continuous view of social status and an individualistic, rather
For example Chirot (1986) presents fascinating evidence that
the leaders of the Communist Party and the Nationalist Party during the Chinese civil war had very similar social origins, predominantly from the traditional elite and middle classes, with practically no representation of the peasant classes in either party, and
similarly high proportions of individuals with university degrees -proportions much greater than that for China as a whole at that
time.
10
14
than class, focus. Even occupational groupings tend to
dissolve in this perspective, as the spread of income turns
out to be considerable within occupational categories and
has even increased during the current inequality upswing
relative to differences between categories.
b. Distributional Focus
Another point of view characteristic of Pareto’s work and
that is currently on the ascent in studies of economic inequality is a focus on the entire distribution of a resource,
such as income or wealth, rather than on a summary
measure of inequality. Recent methodological work on relative distribution methods is exemplary of that trend: the new
methodology facilitates refined empirical comparisons of
two or more distributions (between men and women, between societies of different types, or for the same society at
more than one point in time) without reducing them to
summary statistics (Alderson, Beckfield and Nielsen, in
press; Handcock and Morris 1999; Morris, Bernhardt and
Handcock 1994). Thus it is possible to detect the segment
of the income scale for which the distributions differ most,
or what change in a distribution over time is responsible for
an overall increase in inequality. These developments are
promising for future studies of inequality and fit well within
the research tradition Pareto inaugurated.
The proximity of the recent Great U-Turn in inequality in
the US and the UK (Alderson and Nielsen 2002; Bluestone
1990; Harrison and Bluestone 1988; Nielsen and Alderson
1997; Thurow 1987) should not diminish the importance of
an earlier episode of intellectual sharing between economists and sociologists on an issue concerning inequality.
Perhaps the major theoretical contribution to understanding historical inequality trends prior to the current upswing
was the marvelously rich piece by Kuznets (1955). While
second-hand capsule descriptions of Kuznets’s argument as
predicting a decline in inequality in mature industrial societies may well make it sound like an apologia for liberal capitalism, the paper itself is a far cry from such a simplistic
interpretation in both tone and substance. The article is a
dramatic confrontation between all of Kuznets’s theoretical
instincts – telling him that so many economic and social
trends associated with industrialization must be working
toward increasing inequality, and a handful of preciously
few empirical data points that suggest instead an invertedU trajectory, with inequality eventually declining in mature
industrial societies after reaching a peak during early industrial development. One must read the piece to truly appreciate the author’s disbelief at his own conclusions.
Kuznets’s work contributed to establish an approach to
income inequality that examines the effects of macro15
economic and social changes on the entire distribution of
income. Kuznets implicated the uneven spread of industrial technology, urban migration, the demographic transition,
the spread of education and many other factors in the discussion of the inequality trajectory. Of particular interest
to sociologists is that Kuznets (1955) explicitly acknowledges the limitations of pure economics in understanding macro-historical income inequality trends, and calls upon demographers and sociologists to join economists in a common project of elucidation of these trends (Kuznets 1955;
see also Lindert and Williamson 1985; Nielsen 1994; Nielsen and Alderson 1995).
c. Role of Social Heterogeneity
Recent research into the late 20th century inequality upswing has cast doubt on one of sociology’s shared legacy –
the interpretation of the social hierarchy as a structure of
empty places rooted in the social division of labor – by revealing that wage dispersion is increasing largely within,
rather than among, occupational categories (Lindert 2000;
Myles 2003; Nielsen and Alderson 2001). Furthermore this
increased dispersion is not completely accounted for by individual differences in measurable skills such as educational credentials. Such phenomena point to the importance of social heterogeneity, i.e. broadly speaking, the
fact that individuals are not identical pawns that can be interchangeably placed into the empty slots of a social structure determined by a specific division of labor. Individuals
differ among themselves, not only with respect to measurable, achieved characteristics such as educational degrees,
but also with respect to characteristics that are typically
not measured in the context of population surveys, such as
cognitive abilities and personality traits. These aspects of
labor supply (as contrasted with the demand represented
by the empty places) are becoming increasingly prominent
in inequality research (Myles 2003).
Social heterogeneity is a central aspect of Pareto’s model
of social mobility. While the nature of the labor supply, and
in particular the distribution of measured and unmeasured
abilities and skills in the labor pool, is likely to become a
major focus of research in inequality trends, it is not clear
that sociologists are fully aware of the implications. Admitting that individuals are intrinsically different in their abilities to carry out different occupations may require accepting that part of human heterogeneity within a given population has a genetic basis. Such a conclusion with respect to
intelligence has become mainstream fare in the field of psychology (Brody 1992; Neisser et al. 1996). Are sociologists
ready to consider genetic aspects of human heterogeneity?
The media and intellectual commotions surrounding publi16
cation of Herrnstein (1971) and Herrnstein and Murray
(1994) suggest that many are still uncomfortable with these
ideas, although new congenial expositions may facilitate acceptance (Pinker 2002).
d. Human Qualities, Obstacles, and Opportunity for
Achievement
As is clear from the work on the distribution of income, Pareto explicitly rejected the notion that the distribution of income is a direct expression of the distribution of human
qualities in the population. He viewed the social hierarchy,
and the movement of individuals within it, as produced by
the combination of the distribution of human “qualities”
relevant to acquiring social resources and status and the
disposition of “obstacles” opposing individual movements.
While in the model of income distribution the nature of the
“qualities that permit men to acquire wealth” is left rather
vague, Pareto would later, in his model of the circulation of
elites, attempt to specify residues, or propensities of individuals to act in certain ways, such as using “combinations” versus force in achieving one’s goals. The concentrations of individuals with different kinds of residues in the
elite, as they strengthen or weaken it, constitute the principal mechanism of elite replacement.
With respect to economic achievement the social structure is viewed as the product of a process of selection of individuals within the social hierarchy, with the intensity of
selection varying in intensity at different levels of the social
structure. As mentioned earlier, cast in a modern terminology Pareto’s discussion refers to something close to what
contemporary social scientists would refer to as opportunity
for achievement. The idea that socio-cultural evolution
might affect the degree to which social mobility depends on
individual skills and abilities, and in particular that the importance of cognitive abilities for socio-economic achievement might vary according to level of industrialization or
specific aspects of national cultures, is an old one (Lipset
and Zetterberg 2001). Herrnstein (1971) and especially
Herrnstein and Murray (1994) make a compelling description of the growing importance of cognitive abilities in industrial societies in the course of the 20th Century (as
manifested in such clue as the increasing selectivity of top
educational institutions, among others; see also Juhn,
Murphy and Pierce 1993; Murnane, Willett and Levy 1995).
The furor over their work has obscured the fact that very
similar conclusions, albeit cast in slightly different terms,
had long been well established in sociology (Duncan, Featherman and Duncan 1972: 69-105). The idea that achievement is substantially affected by cognitive ability (or, potentially, other aspects of personality) obviously hits a raw
17
nerve, with the negative emotion springing from political,
moral, and even spiritual sources. More than technical deficiency, the principal obstacle facing sociologists in developing an effective theory of economic inequality may be the
continued temptation to deny the philosophically inconvenient reality of a central role of human heterogeneity in social mobility processes.
Conclusion
Pareto occupies a peculiar position in the history of sociology. His work has impressed and profoundly influenced a
number of sociologists including Raymond Aron (1967),
Lawrence J. Henderson (1935), George Homans (Homans
and Curtis 1970), Gerhard Lenski (1966), Joseph Lopreato
(1964, 1965), Talcott Parsons (1968), and Pitirim Sorokin
(1928), among others. Many other sociologists, European
as well as American, have instinctively disliked Pareto.
Schumpeter (1951) has probably diagnosed most accurately
the source of this aversion: “One has only to imbue oneself
with the spirit that pervades an American textbook and
then open Pareto’s Manuel in order to realize what I mean:
the naïve lover of modern social creeds and slogans must
feel himself driven with clubs from Pareto’s threshold; he
reads what he is firmly resolved never to admit to be true
and he reads it together with a disconcerting wealth of
practical examples” (p. 112). Pareto was no paragon of political correctness. Some reactions to Pareto’s work (e.g.,
Coser 1977; Gurvitch 1966) bear a striking resemblance to
more recent hostile reactions to Herrnstein (1971) and
Herrnstein and Murray (1994).
I have argued in this paper that Pareto’s work on income
inequality and social stratification in general might be well
worth unearthing, for the insights it gives on a singular episode in the history of social thought in which the experiences of a talented economist and of a talented sociologist
combined, within the same person, to produce a remarkable perspective on the puzzle of social inequality.
References
Alderson, A. S., J. Beckfield, and F. Nielsen. (In
press.). Exactly how has income inequality
changed? Patterns of distributional change in core societies. International Journal of Comparative Sociology 46:
405-424.
Alderson, A. S. and F. Nielsen. (1999). Inequality, development, and dependence: A reconsideration. American
Sociological Review 64:606-631.
Alderson, A. S. and F. Nielsen. (2002). Globalization and
the Great U-Turn: Income inequality trends in 16 OECD
18
countries. American Journal of Sociology 107: 12441299.
Angle, J. (1986). The surplus theory of social stratification
and the size distribution of personal wealth. Social Forces 65:293-326.
Allais, M. (1968). Vilfredo Pareto – Contributions to economics. International Encyclopedia of the Social Sciences.
New York: McMillan and Free Press.
Aron, R. [1967] 1999. Main currents in sociological thought.
New Brunswick, NJ: Transaction Publishers.
Blau, P. M. and O. D. Duncan. (1967). The American occupational structure. New York: John Wiley and Sons.
Bluestone, B. (1990). The Great U-Turn revisited: Economic restructuring, jobs, and the redistribution of earnings.
Pp. 7-37 in Jobs, earnings, and employment growth policies in the United States, edited by J. D. Kasarda. Boston, MA: Kluwer.
Brody, N. (1992). Intelligence. 2e. New York: Academic
Press.
Busino, G. 1967. Introduction à une histoire de la sociologie
de Pareto. [Introduction to a history of Pareto’s sociology.]
Geneva, Switzerland: Droz.
Chirot, D. (1986). Social change in the modern era. New
York: Harcourt, Brace, Jovanovich.
Coser, L. A. (1977). Masters of sociological thought: Ideas
in historical context. 2e. New York: Harcourt, Brace, Jovanovich.
Duncan, O. D., D. L. Featherman, and B. Duncan. (1972).
Socioeconomic background and achievement. New York:
Seminar Press.
Eckland, B. K. (1967). Genetics and sociology: A reconsideration. American Sociological Review 32: 173-194.
Guo, G. and E. Stearns. (2002). The social influences on
the realization of genetic potential for intellectual development. Social Forces 80 (3): 881-910.
Gurvitch, G. (1966). Etudes sur les classes sociales. [Studies on social classes.] Paris, France: Gonthier.
Handcock, M. S. and M. Morris. (1999). Relative distribution methods in the social sciences. New York: Springer.
Harrison, B. and B. Bluestone. (1988). The Great U-Turn:
Corporate restructuring and the polarizing of America.
New York: Basic Books.
Henderson, L. J. (1935). Pareto’s general sociology: A physiologist’s interpretation. Cambridge, MA: Harvard University Press.
Herrnstein, R. J. ([1971] 1973). IQ in the meritocracy. Boston, MA: Atlantic-Little Brown.
Herrnstein, R. J. and C. Murray. ([1994] 1996). The bell
curve: Intelligence and class structure in American life.
19
New York: Free Press. [Paperback edition with new afterword by C. Murray.]
Homans, G. C. and C. P. Curtis, Jr. (1970). An introduction
to Pareto: His sociology. New York: H. Fertig.
Juhn, C., K. M. Murphy, and B. Pierce. (1993). Wage inequality and the rise in returns to skills. Journal of Political Economy 101:410-442.
Keister, L. A. (2005). Getting rich: America’s new rich and
how they got that way. New York: Cambridge University
Press.
Kuznets, S. (1955). Economic growth and income inequality. American Economic Review 45: 1-28. [Also pp. 257287 in Kuznets, S. 1965. Economic growth and structure. New York: Norton.]
Lenski, G. (1966). Power and privilege. Chapel Hill, NC:
University of North Carolina Press.
Leroy-Beaulieu, P. (1881). Essai sur la répartition des richesses et sur la tendance à une moindre inégalité des conditions. [Essay on the distribution of wealth and the tendency toward lower inequality of conditions.] Paris,
France: Guillaumin.
Lindert, P. H. (2000). Three centuries of inequality in Britain and America. Pp. 167-216 in Handbook of income
distribution, volume 1, edited by A. B. Atkinson and F.
Bourguignon. Amsterdam, Netherlands: Elsevier Science.
Lindert, P. and J. G. Williamson. (1985). Growth, equality
and history. Explorations in Economic History 22: 341377.
Lipset, S. M. and H. L. Zetterberg. (2001). Social mobility
in industrial society. Pp. 309-319 in Social stratification:
Class, race, and gender in sociological perspective. 2e.
Boulder, CO: Westview Press.
Lopreato, J. (1964). A functionalist reappraisal of Pareto’s
sociology. American Journal of Sociology 69: 639-646.
Lopreato, J. (1965). Vilfredo Pareto: Selections from his
treatise with an introductory essay. New York: Thomas
Crowell.
Morris, M., A. D. Bernhardt, and M. S. Handcock. (1994).
Economic inequality: New methods for new trends.
American Sociological Review 59: 205-19.
Morris, M. and B. Western. (1999). Inequality in earnings
at the close of the twentieth century. Annual Review of
Sociology 25: 623-657.
Murnane, R. J., J. B. Willett, and F. Levy. (1995). The
growing importance of cognitive skills in wage determination. Review of Economics and Statistics 77: 251-266.
Myles, J. (2003). Where have all the sociologists gone?
Explaining economic inequality. Canadian Journal of Sociology 28: 553-561.
20
Neisser, U, G. Boodoo, T. J. Bouchard, Jr., A. W. Boykin, N.
Brody, S. J. Ceci, D. F. Halpern, J. C. Loehlin, R. Perloff,
R. J. Sternberg, and S. Urbina. (1996). Intelligence:
Knowns and unknowns. American Psychologist 51: 77101.
Nielsen, F. (1972). Problèmes de méthode dans l’oeuvre de
Vilfredo Pareto. [Problems of method in the work of Vilfredo Pareto.] Mémoire de licence [Licence Thesis]. Brussels, Belgium: Université Libre de Bruxelles, Faculté des
Sciences Sociales, Politiques et Économiques.
Nielsen, F. (1994). Income inequality and industrial development: Dualism revisited. American Sociological Review
59:654-677.
Nielsen, F. (1995). Meritocratic and monopoly inequality: A
computer simulation of income distribution. Journal of
Mathematical Sociology 20:319-350.
Nielsen, F. (Forthcoming). Achievement and ascription in
educational attainment: Genetic and environmental influences on adolescent schooling. Social Forces.
Nielsen, F. and A. S. Alderson. (1995). Income inequality,
development, and dualism: Results from an unbalanced
cross-national panel. American Sociological Review
60:674-701.
Nielsen, F. and A. S. Alderson. (1997). The Kuznets Curve
and the Great U-Turn: Income inequality in U.S. counties, 1970 to 1990. American Sociological Review 62:1233.
Nielsen, F. and A. S. Alderson. (2001). Trends in income
inequality in the United States. Pp. 355-385 in Sourcebook on labor markets: Evolving structures and processes,
edited by Ivar Berg and Arne L. Kalleberg. New York:
Plenum.
Pareto, V. (1897). Cours d’économie politique. [Course in
political economy.] Lausanne, Switzerland: Rouge.
Pareto, V. (1909). Manuel d’économie politique. [Manual of
political economy.] Paris, France: Giard et Brière.
Pareto, V. ([1909] 1971). Manual of political economy.
Translated by A. S. Schwier, edited by A. S. Schwier and
A. N. Page. New york: A. M. Kelley.
Pareto, V. (1917-1919). Traité de sociologie génerale.
[Treatise on general sociology.] Geneva, Switzerland:
Droz.
Pareto, V. ([1917-1919, 1935] 1965). Mind and society: A
treatise on general sociology. Translated by A. Bongiorno
and A. Livingston, edited by A. Livingston. New York:
Dover.
Pareto, V. (1965). Ecrits sur la courbe de la répartition de la
richesse. [Writings on the curve of the distribution of
wealth.] Compiled and presented by G. Busino. Geneva,
Switzerland: Droz.
21
Parsons, T. (1968). Vilfredo Pareto – Contributions to sociology. In International Encyclopedia of the Social Sciences. New York: McMillan and Free Press.
Pinker, S. (2002). The blank slate: The modern denial of
human nature. New York: Viking.
Schumpeter, J. (1951). Ten great economists: From Marx to
Keynes. New York: Oxford University Press.
Sorokin, P. (1928). Contemporary sociological theories.
New-York: Harper and Bros.
Stigler, S. M. (1986). The history of statistics: The measurement of uncertainty before 1900. Cambridge, MA:
Belknap Press of Harvard University Press.
Thurow, L. C. (1987). A surge in inequality. Scientific
American 256:5 (May):30-37.
Zipf, G. K. (1949). Human behavior and the principle of
least effort: An introduction to human ecology. Cambridge, MA: Addison-Wesley Press.
22
Table 1 – Reverse cumulative distribution of income in
Great Britain and Ireland for Year 1893-1894; income in
£ (x) and number of incomes greater than x (N).
SOURCE: Data from Pareto (1897: § 958).
Income (£)
Great Britain
X
log x
N
log N
150
2.18 400648
5.60
200
2.30 234985
5.37
300
2.48 121996
5.09
400
2.60 74041
4.87
500
2.70 54419
4.74
600
2.78 42072
4.62
700
2.85 34269
4.53
800
2.90 29311
4.47
900
2.95 25033
4.40
1000
3.00 22896
4.36
2000
3.30
9880
3.99
3000
3.48
6069
3.78
4000
3.60
4161
3.62
5000
3.70
3081
3.49
10000
4.00
1104
3.04
23
Ireland
N
log N
17717
4.25
9365
3.97
4592
3.66
2684
3.43
1898
3.28
1428
3.15
1104
3.04
940
2.97
771
2.89
684
2.84
271
2.43
142
2.15
88
1.94
68
1.83
22
1.34
6
5
Log10 N
Great Britain
4
3
2
CNTRY
Ireland
GB
IRL
1
2.0
2.5
3.0
3.5
Log10 x
4.0
4.5
Figure 1 – Comparison of the reverse cumulative distributions of income for Great Britain and Ireland, 1893-1894.
Plot of Log10 N (number of incomes greater than x)
against Log10 x (income in £). SOURCE: Redrawn from
Pareto (1897: §958, Figure 47). See Table 1 for data.
24
Figure 2 – Typical shape of the income distribution. Income
x (vertical axis) against probability density y (horizontal
axis). SOURCE: Pareto 1897: §961, Figure 48.
25
Figure 3 – Comparison of income distribution in classical
antiquity (I) and a modern industrial society (II).
SOURCE: Modified from Pareto (1971: 287, Figure 56).
26