How Heterogeneity Shapes Vilfredo Pareto’s Social Equilibrium

The current idea of the ‘representative agent’ cannot be readily applied to Vilfredo Pareto’s analysis, which is predicated on the heterogeneity of individuals. Indeed, recognition of the importance of heterogeneity leads Pareto to introduce statistical equilibrium as a complement to the theoretical equilibrium that results from a balance of economic forces. The purpose of this paper is to highlight the implications of Pareto’s views on heterogeneity for the study of political economy and to draw attention to the largely Italian literature that stresses Pareto’s anticipation of aspects of statistical equilibrium developed in the physical sciences.