Vilfredo Pareto’s Sociology
26
cycles synchronise. Hence there are six sequences of interlocking mechanisms, all
tabulated within Powers’ book, which we need to consider here. The first of these
is listed below just as Powers sets it out, not simply to highlight the psychological
component in Pareto’s general sociology, but also to draw attention to the fact that
when Pareto’s theory is ‘unpacked’ in this way, it yields a great many theoretical
promptuaries which social scientists can apply widely.
Based upon what Pareto says
concerning how ‘social sentiment’ has oscillated throughout the history of western
civilization, between periods of ‘faith’ and periods of ‘skepticism’, Powers distils
the cyclical dynamics driving the ‘social sentiment cycle’ as follows:
(1) The more equivocal norms become (6), then (1) the less constrained people are in their
behaviour and the more likely actions of potential but unproven detriment to others are
to be tolerated.
(2) The less constraining norms are and the more tolerant people are of the actions of
potential but unproven detriment (1), then (2) the more confusion there is likely to be
over definitions of appropriate behaviour and the more likely people are to be injured
or offended by the imprudent actions of others.
(3) The more confusion there is over definitions of appropriate behaviour and the more
injury and offense people sustain due to the imrpudent actions of others (2), then (3)
the more likely people are to seek coherent traditions and unequivocal prescriptions.
(4) The less equivocal prescriptions become (3), then (4) the
more constrained people are
and the more likely people are to fear being blamed for the anticipated and unanticipated
consequences of their actions.
(5) The more constraining norms are and the more inhibited people are out of fear of
blame (4), then (5) the more likely people are to question the rationality of normative
beliefs and the more likely people are to avoid helping others.
(6) The more people question the rationality of beliefs and the more hesitant people are to
cooperate with others (5), then (6) the more likely they are to seek relaxed prescriptions
and freedom of autonomous action.
(Powers 1987, 108)
It would doubtless be possible to map entire research literatures over each of these
mechanisms. Indeed, this will grow more evident over the next two chapters, where
the question of what Pareto’s oscillation between ‘faith’ and ‘skepticism’ means in
precise psychological terms will receive considerable attention. For now, though, it is
at least clear that at issue is the classic antagonism between conservative and liberal
psychological orientations towards social and moral norms. Liberal ‘scepticism’
enjoys ascendancy during periods when habits and customs
are increasingly sensed
as being no longer relevant; this begins to evaporate, allowing conservative ‘faith’ to
deepen, when it is later sensed that the guidance once provided by these things had
real value by letting people interact according to known rules.
As interesting and controversial as this idea may be, we must leave it for now and
move on to consider the remaining cycles and their interactions. Powers’ distillation
of Pareto’s theory of the economic cycle (Powers 1987, 115) similarly consists of
interlocking mechanisms which might each provide useful theoretical foundations
for research. Its cyclical dynamic follows Pareto’s early understanding of the
economic cycle which recognised that pools of unused capital
build during economic
Pareto’s ‘Psychologistic’ Sociology
27
depression, creating the conditions for future economic expansion. These pools then
deplete as expansion occurs, to the point where contraction begins again. However,
Powers stresses that Pareto’s theory also contained the following insights:
(1) General prosperity enables people to satisfy tastes for unnecessary consumer goods
and services. (2) Capitalists respond to growing demand for consumer goods and
services by investing in the consumer sector rather than the capital-producing sector. (3)
Economic growth in general means that there is a larger infrastructure to maintain. Greater
depreciation and replacement costs are therefore involved just in trying to maintain the
growing volume of economic activity. And (4) consumer goods and service industries can
tend to have particularly high depreciation and replacement needs,
at least in part because
of the stress consumers place upon fads and newness. As a consequence of all these
factors, the level of replacement costs required to maintain the status quo is especially
great in a prosperous, consumer-oriented economy (Powers 1987, 114).
Pareto regarded psychological factors as integral to this cyclical dynamic, partly
because fluctuations in the psychological compositions of elites in general will either
promote or inhibit consumerism, but also because changes in the psychological
composition of the economic elites in particular will influence whether capital flows
on
a long term, low risk, low reward basis to capital-producing industries, or on
a short term, high risk, high reward basis to consumer industries. In fact, Pareto
wrote very extensively about economic elites in psychological terms, using the terms
rentier and
speculator to designate two different types of capitalist. These terms
approximate to the notions of ‘lion in the economic elite’ and ‘fox in the economic
elite’. His speculators are ‘entrepreneurs’ whose ‘wide-awakeness
in discovering
sources of gain’ allows them to exploit the high risk investment opportunities which
exist in expanding economies (Pareto 1935, §2233). The rentiers, by contrast, ‘do not
depend to any great extent upon ingenious combinations that may be conceived by an
active mind’. They prefer to dedicate their capital to low risk, low return enterprises;
they are often ‘gentlemen’ content with fixed incomes (Pareto 1935, §2234). Hence,
although the rentiers may lack the lions’ ferocity, they do share with them that low
creativity and risk aversion which distinguishes them markedly from the foxes and
speculators. Hence, speculators drive the expansion
and eventual exhaustion of
socially available capital within the consumer economy; once no further potential
for capital expansion exists, rentier ‘thrift’ drives the ensuing process of capital
contraction and consolidation to start the economic cycle afresh within the capital-
producing economy.
Finally, Powers’ reading of Pareto’s political cycle (Powers 1987, 137) draws
more overtly upon Pareto’s Machiavellianism. The focus here is upon alternation
between the governing control strategies of ‘force’ (which leads to the consolidation
and centralisation of sovereignty) and ‘fraud’ (which manages the dispersal of
sovereignty throughout diverse networks). Powers’ argument
is that both strategies,
when carried to extremes, lead to inefficiencies of political coordination and control.
Political decentralisation favours the strategy of co-optation, which produces wide
social distributions of political sovereignty. This creates ‘patronage and usufruct’
which in turn produces organisational inefficiencies such as those increasingly
expensive and unsustainable patterns of resource allocation which characterised