Who was Vilfredo Pareto?
PARETO Italian sociologist and economist whose theories influenced the development of fascism in Italy (1848-1923) Vilfredo Federico Damaso Pareto (born July 15, 1848 in Paris, France – died August 19, 1923 in Lausanne, Switzerland) made several important contributions to economics, sociology and moral philosophy, especially 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 with ideas such as indifference curves. His theories influenced Benito Mussolini and the development of Italian fascism. In 1906, he made the famous observation that 20% of the population owned 80% of the property in Italy, later generalised by Joseph M. Juran and others into the so-called Pareto principle (also termed as the 80-20 rule) and generalised further to the concept of a Pareto distribution. http://en.wikipe
What was his role in history? And why should it make any difference to electric utilities? While many businesses have already gained a measure of success by adopting the principles embedded in Pareto’s law, electric utilities have largely ignored the ideas of this Italian engineer turned philosopher, because they have enjoyed a guaranteed income. The regulated electric utility industry has remained unaware of the implications of Pareto’s law, since their customers have been captive and were forced to support the bottom line. But this ignorance cannot continue for much longer, not if the proponents of deregulation have their way. Currently, utilities treat all customers the same, regardless of the profits they generate. In fact, most utilities cannot identify which customers yield the highest profits. Pareto’s law certainly will kick in when today’s monopolies give way to competing retail energy providers. Utilities will have to treat customers differently. But it won’t be so bad. New t
He was born in Paris on July 15, 1848, and died in 1923, in Geneva. Pareto was an Italian economist and sociologist, known for his theory on mass and elite interaction as well as for his application of mathematics to economic analysis. Pareto’s first work, Cours d’conomie Politique (1896 97), included his famous but much-criticized law of income distribution, in which Pareto attempted to prove that the distribution of incomes and wealth in society is not random and that a consistent pattern appears throughout history, in all parts of the world and in all societies. This became known as Pareto’s Law: “The law ofthe trivial many and the critical few.” You’ll recognize it as the 80/20 Rule…. Eventually, believing there were problems that economics could not solve, Pareto turned to sociology, writing what he considered his greatest work, Trattato di sociologia generale (1916; Mind and Society).Persons of superior ability, Pareto argued, actively seek to confirm and aggrandize their posit
