Enrico Barone (; 22 December 1859,

Naples Naples (; it, Napoli ; nap, Napule ), from grc, Νεάπολις, Neápolis, lit=new city. is the regional capital of Campania and the third-largest city of Italy, after Rome and Milan, with a population of 909,048 within the city's adminis ...

Kingdom of the Two Sicilies The Kingdom of the Two Sicilies ( it, Regno delle Due Sicilie) was a kingdom in Southern Italy from 1816 to 1860. The kingdom was the largest sovereign state by population and size in Italy before Italian unification, comprising Sicily and a ...

– 14 May 1924,

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, Italy) was a

soldier A soldier is a person who is a member of an army. A soldier can be a conscripted or volunteer enlisted person, a non-commissioned officer, or an officer. Etymology The word ''soldier'' derives from the Middle English word , from Old French ...

military historian Military history is the study of armed conflict in the history of humanity, and its impact on the societies, cultures and economies thereof, as well as the resulting changes to local and international relationships. Professional historians norma ...

, and an

economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...

Biography

Barone studied the

classics Classics or classical studies is the study of classical antiquity. In the Western world, classics traditionally refers to the study of Classical Greek and Roman literature and their related original languages, Ancient Greek and Latin. Classics ...

and

mathematics Mathematics is an area of knowledge that includes the topics of numbers, formulas and related structures, shapes and the spaces in which they are contained, and quantities and their changes. These topics are represented in modern mathematics ...

before becoming an army officer. He taught military history for eight years from 1894 at the Officers' Training School. There he wrote a series of influential historical military works. In these he employed a method of successive approximations to which his study in economics had introduced him. In 1902, he became head of the historical office of the General Staff. He resigned his commission in 1906. From 1894 he collaborated with Maffeo Pantaleoni and

Vilfredo Pareto Vilfredo Federico Damaso Pareto ( , , , ; born Wilfried Fritz Pareto; 15 July 1848 – 19 August 1923) was an Italian polymath (civil engineer, sociologist, economist, political scientist, and philosopher). He made several important contribut ...

in the ''Giornale degli Economisti''.F. Caffé, 9872008. "Barone, Enrico," ''

The New Palgrave Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is a twenty-volume reference work on economics published by Palgrave Macmillan. It contains around 3,000 entries, including many classic essays from the original Inglis Palgrave Diction ...

'', 2nd Edition. Relate
links

Impact

He was the first to state conditions under which a

competitive market In economics, competition is a scenario where different economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the same (legal) firm ...

would be

Pareto efficient Pareto efficiency or Pareto optimality is a situation where no action or allocation is available that makes one individual better off without making another worse off. The concept is named after Vilfredo Pareto (1848–1923), Italian civil engin ...

. He introduced variable factor proportions into

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

, contributing to the marginal-productivity theory of factor-income

distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...

. He extended conditions of

general equilibrium In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...

in Walrasian theory, suggesting the feasibility of

trial-and-error Trial and error is a fundamental method of problem-solving characterized by repeated, varied attempts which are continued until success, or until the practicer stops trying. According to W.H. Thorpe, the term was devised by C. Lloyd Morgan (1 ...

movement to

market equilibrium In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the ( equilibrium) values of economic variables will not change. For example, in the st ...

. He pioneered the economic theory of

index numbers In Statistics, Economics and Finance, an index is a statistical measure of change in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and ...

. His contributions were made without use of

utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosopher ...

or even

indifference curve In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is ''indifferent''. That is, any combinations of two products indicated by the curve will provide the c ...

Paul A. Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...

, 1947, Enlarged ed. 1983, ''

Foundations of Economic Analysis ''Foundations of Economic Analysis'' is a book by Paul A. Samuelson published in 1947 (Enlarged ed., 1983) by Harvard University Press. It is based on Samuelson's 1941 doctoral dissertation at Harvard University. The book sought to demonstrate a ...

'', pp. 213–18. Barone has been described as a "founder of the pure theory of a socialist economy." In 1908, he presented a mathematical model for a socialist economy under which certain relations, later identified with

shadow price A shadow price is the monetary value assigned to an abstract or intangible commodity which is not traded in the marketplace. This often takes the form of an externality. Shadow prices are also known as the recalculation of known market prices in o ...

s, must be satisfied for "maximum collective welfare."• Enrico Barone, 1908."Il Ministro della Produzione nello Stato Collettivista", ''Giornale degli Economisti'', Sept./Oct., 2, pp. 267–93, 392–414, trans. as "The Ministry of Production in the Collectivist State," in

F. A. Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, Jurisprudence, legal theorist and philosopher who is best known for his defense of classical lib ...

, ed. (1935), ''Collectivist Economic Planning'', pp
245–90
reprinted in R. Marchionatti, ed. (2004), ''Early Mathematical Economics, 1871–1915: The Establishment of the Mathematical Method in Economics'', v. IV, Taylor & Francis, pp
227–63
(bigger preview).
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Passages from the Italian original text. The latter corresponds to least-cost-price of production from Pareto efficiency reached in competitive equilibrium. He stressed that such a result could not be arrived at ''a priori'' but only by experimentation on a large scale with great demands on data collection, even assuming unchanging productive conditions. In this, he suggested that movement toward economic efficiency in a socialist economy was not inconceivable, outlining two types of socialism: a centralized and decentralized model. For such regimes, whatever the

rule for output and income adopted by the Ministry of Production, the same economic categories would reappear for prices, salaries, interest, rent, profits, saving, etc., though perhaps with different names. His analysis and the

Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian school ...

economists' responses, fueled discussion of the

economic calculation problem The economic calculation problem (sometimes abbreviated ECP) is a criticism of using economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article "Eco ...

and

market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...

in the 1930s. His method also anticipated

Abram Bergson Abram Bergson (born Abram Burk, April 21, 1914 in Baltimore, Maryland – April 23, 2003 in Cambridge, Massachusetts) was an American economist, academician, and professor in the Harvard Economics Department since 1956. Early life and educatio ...

's seminal formulation of a

social welfare function In welfare economics, a social welfare function is a function that ranks social states (alternative complete descriptions of the society) as less desirable, more desirable, or indifferent for every possible pair of social states. Inputs of the fu ...

three decades later.

Notes

References

* Richard E. Ericson, "Enrico Barone,", ''Gale Encyclopedia of Russian History''
Enrico Barone, 1859–1924
a
The History of Economic Thought Website.
{{DEFAULTSORT:Barone, Enrico 1859 births 1924 deaths Italian economists 19th-century Italian economists 20th-century Italian economists Welfare economists General equilibrium theorists