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The Principles of Vilfredo Pareto and Karl Marx Essay

Karl Marx, a polarizing figure in our history, has influenced so many theorists and political activists. His view on social conflict emphasizes more on materialist perspective. Marx has a critical approach towards the existing social and economic arrangement. In his materialist point of view, the most crucial aspect of social life is the work that individuals do that produces life’s basic necessities – food, shelter and clothing. Thus, things that are of inherent value to man are produced by man.

So ultimately, it is the working individuals who participate in the making of society, and in effect, constructing the condition of the society to which they live in. However, in Marx’s observation of the current social arrangement there is rampant exploitation. If an individual’s amount of completed labor is more than the labor necessary to produce the goods that he normally consumes, then that individual is exploited. On the other hand, if an individual works less than the amount of labor necessary for him to produce the goods that he consumes, then he is an exploiter.

This form of exploitation is present in societies with distinct classes. It is the idea of exploitation that determines which class the individual belongs. Marx’s ideas on labor and exploitation are in congruence with Vilfredo Pareto’s Law of the Vital Few. In his principle he stated that twenty percent (20%) of the population control eighty percent (80%) of the wealth. This means that those in the upper class are those that have control over the lives and conditions to which the individuals live in. In Marx’s term, the exploiters are those of the 20% who control the 80% of the wealth.

And the exploited are the 80% who partake of the remaining 20% of the resources. In Pareto’s Principle, the ideal is that in an economic system, an individual could be made “better off” without sacrificing the welfare of another individual. This is called Pareto efficiency. The situation is deemed inefficient when the reallocation of resources yields to one individual gaining from it and another made worse of by it. To reduce inefficiency, proper reallocation and improvement of lives should be emphasized. But this whole idea of efficiency is gravely unrealistic.

In the real world with fairly limited resources and controlled production of goods, a reallocation of resources would almost always result to another individual to be exploited. In all modern economies, the ideas of Marx and Pareto are still visible. An example of which, manual and un-mechanized labor is still prevalent in most Third World countries thereby resulting to individuals doing more amount of labor than what is actually required to produce the goods that they consume. Moreover, it is the elite who control most of the wealth in the nation.

In the Philippines, almost 48% of the wealth is controlled by the upper 20% of the society whereas the rest of the 80% of the population divide the remaining 52% of the total wealth. In a capitalist state, there is no way that social conflict could be eliminated. When profit is the primary driving force of the economy, Pareto inefficiency and exploitation is almost always the norm. Both Marx and Pareto conform that the only way to achieve certain change is to unseat the aristocratic class through an upheaval, and create an economy that values individuals based on the labor that he performs.

As similar as both principles sound, Marx’s ideas dwell more on the intrinsic values of individuals than on wealth distribution such as Pareto did. Because of this, Marx’s ideas are more appealing because his principles emphasize on validating the individual by giving each the value that they deserve. His goal actually is to bring back self-dignity to the exploited, to achieve equality and equity because this is what each and every human deserves. Wealth and resources are secondary to humans rather the gratification that everyone is held equal takes precedence.

References: Cirillio, R. (1979). The Economics of Vilfredo Pareto. UK: Frank Cass and Company, LTD. Marshall, Alsdair. (2007). Vilfredo Pareto’s Sociology. UK: Ashgate Publishing. Marx, Karl (Translated by Ernest Mandel). (1976). Capital: Volume 1: A Critique of Political Economy. New York: Penguin Putnam Inc. Marx, Karl (Translated by Martin Nicolaus). (1973). Grundrisse: Foundations of the Critique of Political Economy. New York: Penguin Putnam Inc.


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