Many political disputes in the past few years have been framed as battles between economic rationality and eruptions of irrationality that we label populism, but cognitive psychologists and economists would point out that political irrationality is hardly confined to populist insurgents. As a general matter, most political leaders are focused on practical matters and do not necessarily think deeply about the ideas they expound.
Among the early modern cartographers of political irrationality was Vilfredo Pareto, who died 100 years ago, on Aug. 19, 1923. Born in 1848, that year of liberal hope (and revolution) across Europe, Pareto died after witnessing the liberal order’s demise and the tragedy of World War I. Nowadays, his name pops up most often in references to “Pareto optimality,” when no further action can be taken to benefit someone without harming someone else, or the “Pareto principle,” the idea that about 80 percent of outcomes stem from only 20 percent of causes.
It is hard to imagine Pareto betting that he would be remembered for these ideas. His father, an engineer, had bequeathed him a scientific and mathematical education, and he had applied that to a managerial career that kept him busy into his 40s.
While still in business, he involved himself in liberal politics in Florence, Italy, where he became a pugnacious polemicist and learned economist. Eager for his voice to be heard, he corresponded with French economists and published in their language, always taking pains to develop contacts wherever he could. He wrote to Britain’s Liberal prime minister, William Gladstone, and Gladstone wrote back.
Among his many correspondents, the most frequent was Maffeo Pantaleoni, a career academic 10 years his junior, but far more accomplished when the two of them started to exchange letters. Pareto expressed appreciation for an essay by Pantaleoni, but he had spotted a few flaws in it. Instead of reacting grudgingly, Pantaleoni quickly discerned that his pen pal was a genius. He duly kept all his letters and was instrumental in Pareto’s move to academia.
In 1893, Pareto succeeded Leon Walras, a founder of neoclassical economics, in his chair at the University of Lausanne in Switzerland.
There, Pareto embraced teaching vigorously, but his enthusiasm for economics faded. He wanted to move to sociology, because he had come to see human life as dominated by illogical actions. Having already played a considerable role in formalizing modern economics, he would soon also end up at the fountainhead of 20th-century political science and sociology.
As a young man, Pareto saw free trade as obviously beneficial to all, and military spending as detrimental to many. Yet his own country, Italy, moved away from free trade and embarked on extravagant, brutal colonial expansions. While Pareto was quick to diagnose this behavior as the result of influence by special interests, he wondered why so many other people went along with it.
The function of political ideologies, as Pareto saw it, was to put lipstick on a pig. The fundamental nature of politics is that somebody rules and many more obey — and not even democracy can change that.
However, the fact that somebody must rule does not mean that the same people rule forever. On the contrary, history is a cemetery of defunct ruling classes. When a ruling class becomes too self-referential and incapable of integrating new elements, its time is up.
Pareto did not think that history and politics could be understood from the self-serving narratives of the protagonists. Rather, developments should be subjected to a scientific inquiry that goes beyond the surface of “derivations,” not stopping at the reasons people provide to explain their own behavior. Pareto understood that people’s actions stem from deep-rooted motives — what he called “residues” — which they then must rationalize. We are all constantly inventing justifications to make the non-rational appear rational.
Pareto saw “rationalism” as just another “intellectual religion,” and intellectuals as no less susceptible to pseudoscientific creeds than anybody else.
The next time you scroll through your social media feed, consider whether all those advocating “right” causes have actually thought deeply about them. How many have actually read all the literature they cite, or engaged with opposing views? Often, what we think is contingent on our need to belong.
In politics, two “residues” (triggers of action) are of paramount importance. On the one hand, there are “rentiers” who value stability, oppose change and newcomers, and tend to live on land rent or fixed income. Pareto characterizes their “residue” as the “persistence of aggregates” — such as customs, traditions, social classes and so forth.
On the other hand, there are “speculators,” who thrive on change and the pursuit of innovation, but who also tend to manipulate government for their own ends. Pareto describes their “residue” as the “instinct for combination,” which suggests an ability to invent ever-new things.
Rentiers and speculators are necessary for a country to thrive, but Pareto saw the second category as more likely to gain control of society, particularly when government is expanding. They are at home in large-scale, ambitious “schemes” — regardless of whether the aim is to win a war, reduce inequality or make bureaucracy more efficient.
Pareto’s sketches of the world before World War I resemble the world we live in now. He saw financial engineering at the service of government as basically fraudulent; he ridiculed those who believed that taxes were a fee we pay for services; and he regarded inflation and public debt as instruments for “plundering” specific segments of the population.
In the long run, governments do not pay their debts, and they will tax people as much as they can. Speculators are better at surfing the wave and profiting from these tendencies, whereas rentiers (or pensioners and others on fixed incomes) are more likely to end up paying the bill.
Today more than ever, politics is about believing and belonging. Polarization has made the right and the left into ardent champions of their respective causes. Both believe that if they do not win, the world will go to the dogs. Public intellectuals today are fully invested in this rhetoric.
Of course, Pareto himself was a man of passions who ardently believed in liberty and tolerance. Yet he somehow forced his political realism on himself, not in the service of some fetish for neutrality, but because he saw lucidity as his ultimate duty.
Alberto Mingardi, an associate professor of the history of political thought at IULM University, is director-general of the Istituto Bruno Leoni in Milan, Italy.
Copyright: Project Syndicate
Taiwan aims to elevate its strategic position in supply chains by becoming an artificial intelligence (AI) hub for Nvidia Corp, providing everything from advanced chips and components to servers, in an attempt to edge out its closest rival in the region, South Korea. Taiwan’s importance in the AI ecosystem was clearly reflected in three major announcements Nvidia made during this year’s Computex trade show in Taipei. First, the US company’s number of partners in Taiwan would surge to 122 this year, from 34 last year, according to a slide shown during CEO Jensen Huang’s (黃仁勳) keynote speech on Monday last week.
On May 7, 1971, Henry Kissinger planned his first, ultra-secret mission to China and pondered whether it would be better to meet his Chinese interlocutors “in Pakistan where the Pakistanis would tape the meeting — or in China where the Chinese would do the taping.” After a flicker of thought, he decided to have the Chinese do all the tape recording, translating and transcribing. Fortuitously, historians have several thousand pages of verbatim texts of Dr. Kissinger’s negotiations with his Chinese counterparts. Paradoxically, behind the scenes, Chinese stenographers prepared verbatim English language typescripts faster than they could translate and type them
More than 30 years ago when I immigrated to the US, applied for citizenship and took the 100-question civics test, the one part of the naturalization process that left the deepest impression on me was one question on the N-400 form, which asked: “Have you ever been a member of, involved in or in any way associated with any communist or totalitarian party anywhere in the world?” Answering “yes” could lead to the rejection of your application. Some people might try their luck and lie, but if exposed, the consequences could be much worse — a person could be fined,
When China passed its “Anti-Secession” Law in 2005, much of the democratic world saw it as yet another sign of Beijing’s authoritarianism, its contempt for international law and its aggressive posture toward Taiwan. Rightly so — on the surface. However, this move, often dismissed as a uniquely Chinese form of legal intimidation, echoes a legal and historical precedent rooted not in authoritarian tradition, but in US constitutional history. The Chinese “Anti-Secession” Law, a domestic statute threatening the use of force should Taiwan formally declare independence, is widely interpreted as an emblem of the Chinese Communist Party’s disregard for international norms. Critics
RSS