DISCUSSIONS

REPORT: PARETO OPTIMUM IN A DIFFERENT A P P R O A C H TO E C O N O M I C S *

I would like, in the Proceedings of this important International Meeting on Vilfredo Pareto, to make at least a comment on a different interpretation of the role of the notion of Pareto Optimality, for the sake of a different approach to Economics. It consists in making it the starting point for all economic thinking, the basis for every comparison and choice, not only concerned with decisions of singular individuals or firms, according to their particular interest, in the framework of a given economic system. On the contrary, it has to be considered, first of all, as a preliminary picture of all technologically possible (attainable) welfare situations (production, distribution, quality of life) for all mankind; of course letting such difficultybe set aside for the moment with due concern to the future (problems of 'Limits to Growth'). The choice is then, primarily, the choice of one among the situations (or among the kinds of situations) which are possible in such a technological sense. The choice among different kinds of organization - the politico-economic systems - should not then be made dependent on ideological or juridical preconceptions, but should be carefully pondered with the only aim being to find the most suitable tool to attain the goal: this one among the (infinitely many) optimal points judged as the 'most equitable' in a "social' value-judgement. Roughly speaking, when such an aim is specified, this is but a problem of Operations Research (of very large size, to be sure); its effective implementation will also depend, of course, on the willingness of people to participate in a cooperative rather than in a competitive (usually a wasteful competitive) venture, for the universal benefit. This way, no institutional device should be presupposed so as to narrow a priori the discussions and the possibilities of choice: the regulations, and the existence itself, of particularities like property, saving, money, prices, and so on, cannot be explicitly or implicitly admitted before without losing the intended generality and destroying the purpose of the suggested approach.
Theory and Decision 5 (1974) 343-344. All Rights Reserved Copyright 9 1974 by D. Reidel Publishing Company, Dordrecht-Itolland

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DISCUSSIONS

At any rate, I will emphasize that, in my opinion, the contribution of Pareto to economic theory by the introduction of the notion of Pareto Optimality is fundamental, and is even more important than it has been considered by himself and the most favourable followers, although I don't agree with his thesis that an optimum is spontaneously reached by free competition in a capitalistic society. In order to reject the almost patent conclusion that to attain an Optimum some more or less socialist Welfare State is needed, Pareto seems to me to have been felt obliged to maintain, as a sociological thesis, that such a state is too beautiful to be feasible. But, for the same reasons, also the capitalistic one is surely worse in reality than it could ideally be (even if it could not be expected to be optimal). Moreover, even if it happened to attain sometimes an optimal point, it must be stressed that 'optimum' does not imply 'good': there are optimal points for any situation even of extreme inequality, and it cannot be called 'good' although it must be called 'optimum' (in the technical Pareto's sense). I will not enter here into further developments or discussions; if one is interested on the subject, something more may be found in two books: Bruno de Finetti, Un matematico e l'economia (a sample of papers from 1935 up to 1968), Franco Angeli ed., Milano 1969. Bruno de Finetti (Editor), Requisiti per un sistema econornico accettabile in relazione alle esigenze della collettivitd (Proceedings of a CIME Summer Course in Urbino, 1971), Franco Angeli ed., Milano 1973. My viewpoint is given in the opening paper (pp. 13-87) and briefly expressed in the title, which (translated into English) is as follows: 'Utopia as a necessary presupposition for every significant foundation of economics'. (See summary in this issue, pp. 335-342.) BRUNO DE FINETTI
University o f Rorne

NOTE * Contribution to the Meeting on Vilfredo Pareto at the Accademia Nazionale dei Lincei, Rome, October 25-27, 1973.