In Pigou’s Wealth and Welfare, as well as in each of the four editions of his The Economics of Welfare, one chapter is dedicated entirely to the critical assessment, and ultimate rejection, of ‘Pareto’s law’ of income distribution. This note highlights Pigou’s uncorrected misreading of a critical aspect of Pareto’s analysis of income distribution; illustrates what his criticisms of Pareto’s law reveal about Pigou’s objectives for welfare economics; and indicates how Pareto’s analysis of income distribution could have been criticised in a manner that is consistent with Pigou’s objectives for welfare economics.
Keywords: Income distribution; Pareto’s law; Pigou; Economic welfare; B13; B31; I30
Journal Article. 6997 words. Illustrated.
Subjects: Welfare and Poverty ; Individual Economists ; History of Economic Thought (to 1925)
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