Wicksell on Pareto: Efficiency, Welfare, and Distribution
33 Pages Posted: 3 Mar 2017
Date Written: March 2, 2017
No individual in the history of public economics has been subject to more contentious discussion than Knut Wicksell – and perhaps no concept subjected to more diverse interpretation than Wicksell’s unanimity rule. The story begins in 1896 with the publication of Wicksell’s public finance treatise, Finanztheoretische Untersuchungen, and starts to take shape in 1906 with the publication of Pareto’s Manual of Political Economy. The crux of the matter hinges on the relationship between Wicksell’s unanimity rule and Pareto’s optimality. This article examines Wicksell’s one-sided debate with Pareto in sociological, economic, and methodological terms, and evaluates Pareto’s influence on Wicksell’s subsequent analysis of collective economic welfare. Also considered is the trajectory of their economic ideas that led to an eventual convergence in public choice.
Keywords: Knut Wicksell, Vilfredo Pareto, Efficiency, Unanimity, Distribution, Welfare
JEL Classification: B2, H4
Suggested Citation: Suggested Citation