Leading Economists 1875-1920

Leading Economists, 1875-1920, Italy Economic History

Aside from the earlier leaders such as Ferrara, Messedaglia, and L. Cossa, the most important Italian economists, as judged by work done between 1875 and 1920, appear to have been Graziani, Loria, Pantaleoni, Pareto, Rabbeno, and Ricca-Salerno. Supino1and Conigliani are also to be mentioned, the former having become a leading exponent of Neo-Classicism.
Ricca-Salerno (b. 1849) was a pupil of Wagner and held a somewhat eclectic position concerning method, tempering a Classical basis with a knowledge of historical criticism and an allowance for socio-ethical factors. He followed Sax in financial theory, applying the deductive method and the marginal-utility analysis.

Graziani and Conigliani were his pupils. Graziani (1865-1939) wrote well on machinery and wages, stock exchanges, and other subjects in applied economies. He accepted the Austrian subjective theory of value, but combined it with objective elements, perhaps under the influence of Marshall. Especially notable are his application of the marginal-utility theory to distribution. Conigliani (d. 1901), in his work on taxation, adopted the leading ideas of Sax.

Pantaleoni (d. 1924) may also be classed as an economist who was largely affected by German thought, for he showed the influence both of Wagner and of the Austrian School. His Prin-cipii di economia pura (1889) has been translated into English as Principles of Pure Economics (1898), and is one of the best-known Italian works. Pantaleoni at bottom was an adherent of the Neo-Classical School, for he not only defined economics much as Senior did, but also reconciled marginal utility and marginal cost or disutility, and opposed the interest theory of Bohm-Bawerk. He made considerable use of the mathematical method. His book on the incidence of taxes was notable as an early work.

Vilifredo Pareto (d. 1923), originally a mathematician and engineer, was led by Pantaleoni into economics. Pareto was a mathematical rationalist, in many respects like Walras, and became a member of the Lausanne School. It is also to be noted that he united with Ferrara to oppose the Socialists of the Chair. An outstanding characteristic of his thought was his uncompromising insistence upon the existence of laws or uniformities in human activities.

His first treatise on political economy (1896) presents a clear discussion of the determination of objective exchange value, analyzing demand and supply with precision. His proposed substitution of the term "ophelimity" for "utility," on the ground that the latter is not satisfactory for scientific use, is meritorious and well known, though not followed save by a few disciples. The idea of a definite proportion required among the factors of production in order to insure economically successful results is sometimes called Pareto's Law. Pareto's name is also associated with a law of the inequality of the distribution of wealth, based upon statistical data which show that the larger the fortune the smaller the number of those who possess it.
This great Italian economist showed remarkable development in his thought. Originally he accepted the Classical doctrines of Liberalism, merely taking in marginal utility (o-phelimity) which he treated as a quantity of enjoyment, as appears in his Cours. Then he developed the tendency common in the Mathematical School to treat marginal utility merely as the basis of exchanges, or a ratio, and at the same time to minimize the theory of value. He adopted the technique of "indifference curves" dealing with relations among valuation quanta without measurement of amounts of value. This appears in his Manuale di economia politico. (1906), in which he seems to be less convinced of the applicability of the more abstract doctrines. Finally, he showed the mechanistic trend of his thought by publishing a notable work on sociology (Trattato di sociologia generate, 1916), in which he recognized the limitations of reflective choices as an explanation of social life, and allowed for customs and conventions. Thus he distinguished two sets of human motives, the logical and the non-logical or emotional. His general idea throughout, however, is one of equilibrium — an equilibrium between (1) desires and (2) obstacles to desire gratification, including the wants of others. Thus he attempts to build a mechanistic theory of social equilibrium which, in its conception of human thought and action as largely non-logical, readily lends itself to a Machiavellian sort of control by the state.

Loria (d. 1943) deserves a separate paragraph, not because of the soundness of his views, but because of a considerable originality. He makes a study of real property the basis for an attack upon the present system of distribution. Following a purely economic interpretation of history, he treated morals, law, and politics not as causes, but as results, of economic conditions. Land is the cornerstone of the system. Capitalistic property is founded upon the violent suppression of free land.

Thus no mere laws could remedy present evils, but only a diffusion of property. In his later writings he defended the right of each man to land, and, as a practical remedy, suggests the payment by employers of a "territorial wage" for a term of years, with the idea that at the end of the period substantial equality would exist — as in "final" or primitive society — and cooperation could be hoped for. Loria appears to have overlooked the significance of bases for capitalization other than land; and few accept so rigidly economic an interpretation of human motives and history.