Pareto and contemporary economic theory

This paper provides explanations for Pareto’s apparently contradictory approach to demand theory in simultaneously insisting that measurability of utility is not needed to explain the equilibrium of consumers in competitive markets, and embracing concavifiability and thus measurability of utility when this implies restrictions on consumers’ behavior such as the law of demand. It also treats his method of calibrating an aggregate demand function by employing his law of income distribution, so as to reproduce “Gregory King’s law”. Finally, some disputed issues are dealt with concerning the nature of Pareto’s contributions to welfare economics. (JEL: B13, D11, D60).