Enrico Barone (; 22 December 1859,

Naples Naples ( ; ; ) is the Regions of Italy, regional capital of Campania and the third-largest city of Italy, after Rome and Milan, with a population of 908,082 within the city's administrative limits as of 2025, while its Metropolitan City of N ...

Kingdom of the Two Sicilies The Kingdom of the Two Sicilies () was a kingdom in Southern Italy from 1816 to 1861 under the control of the House of Bourbon-Two Sicilies, a cadet branch of the House of Bourbon, Bourbons. The kingdom was the largest sovereign state by popula ...

– 14 May 1924,

Rome Rome (Italian language, Italian and , ) is the capital city and most populated (municipality) of Italy. It is also the administrative centre of the Lazio Regions of Italy, region and of the Metropolitan City of Rome. A special named with 2, ...

, Italy) was a

soldier A soldier is a person who is a member of an army. A soldier can be a Conscription, conscripted or volunteer Enlisted rank, enlisted person, a non-commissioned officer, a warrant officer, or an Officer (armed forces), officer. Etymology The wo ...

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 ...

, 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, also classical studies or Ancient Greek and Roman studies, is the study of classical antiquity. In the Western world, ''classics'' traditionally refers to the study of Ancient Greek literature, Ancient Greek and Roman literature and ...

and

mathematics Mathematics is a field of study that discovers and organizes methods, Mathematical theory, theories and theorems that are developed and Mathematical proof, proved for the needs of empirical sciences and mathematics itself. There are many ar ...

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 Maffeo Pantaleoni (; 2 July 1857 29 October 1924) was an Italian economist. Born in Frascati, at first he was a notable proponent of neoclassical economics. Later in his life, before and during World War I, he became an ardent Italian nationa ...

and

Vilfredo Pareto Vilfredo Federico Damaso Pareto (; ; born Wilfried Fritz Pareto; 15 July 1848 – 19 August 1923) was an Italian polymath, whose areas of interest included sociology, civil engineering, economics, political science, and philosophy. He made severa ...

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 Dictio ...

'', 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) fir ...

would be Pareto efficient. 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 go ...

, contributing to the marginal-productivity theory of factor-income distribution. 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 movement to

market equilibrium In economics, economic equilibrium is a situation in which the economic forces of supply and demand are balanced, meaning that economic variables will no longer change. Market equilibrium in this case is a condition where a market price is esta ...

. He pioneered the economic theory of

index numbers In economics, statistics, and finance, an index is a number that measures how a group of related data points—like prices, company performance, productivity, or employment—changes over time to track different aspects of economic health from var ...

. His contributions were made without use of

utility In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. * In a normative context, utility refers to a goal or objective that we wish ...

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 ...

s. Paul A. Samuelson, 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 prices, 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, 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 distribution 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 economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivat ...

economists' responses, fueled discussion of the

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

and

market socialism Market socialism is a type of economic system involving social ownership of the means of production within the framework of a market economy. Various models for such a system exist, usually involving cooperative enterprises and sometimes a mix ...

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 educat ...

's seminal formulation of a

social welfare function In welfare economics and social choice theory, a social welfare function—also called a social ordering, ranking, utility, or choice function—is a function that ranks a set of social states by their desirability. Each person's preferences ...

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 19th-century Italian economists 20th-century Italian economists Welfare economists General equilibrium theorists Nunziatella Military School alumni Socialist economists