The 80–20 rule began with an engineer counting who owned Italy
In 1906 Vilfredo Pareto noted that about a fifth of Italians owned roughly four fifths of the country's property. Decades later the management thinker Joseph Juran generalised the observation into the Pareto principle. Pareto himself was a railway engineer who took up economics seriously only in his mid-forties.
He was born in Paris on 15 July 1848, amid that year's revolutions, to an exiled Genoese marquis and a French mother, who named him Wilfried Fritz out of enthusiasm for the German uprisings; the family Italianised it to Vilfredo Federico on returning home in 1858. His 1869 engineering doctorate at Turin was on equilibrium in solid bodies, a theme he would later carry into economics and sociology. He then worked for the state railway and ran ironworks.
At first a fierce free-market liberal who attacked government meddling, he succeeded Léon Walras in 1893 as professor of political economy at Lausanne, where he stayed for life. There he argued that wealth follows the same skewed curve, now called the Pareto distribution, in every society and era. He also gave his name to Pareto efficiency, a cornerstone of microeconomics, and helped popularise the word elite in social analysis.
Puzzled that tidy economic models failed to predict what people actually did, he turned to sociology. His Treatise on General Sociology of 1916 argued that most social behaviour is nonlogical, driven by deep habits he called residues and dressed up afterwards with justifications he called derivations. Ruling groups, he said, alternate between cautious lions and speculative foxes, and history is a graveyard of aristocracies. Harvard scholars including Talcott Parsons took up his ideas in the 1930s.
His views could be harsh. He opposed redistribution as pointless, wrote contemptuously about feminism, and welcomed Mussolini, who had attended his Lausanne lectures in 1904, as a route to a minimal state. Karl Popper called him a theoretician of totalitarianism, though the historian Renato Cirillo argues Pareto's private letters were critical of fascism. His first wife left him in 1902; he remarried shortly before dying in Geneva on 19 August 1923.
Source: Vilfredo Pareto
