ABSTRACT
Despite his reference to ‘moral benefits’ (see also ibid.: sec. 256), Pareto stressed mostly the ‘economic profit’ aspect of parenthood (cf. Carbon 1976: 18-19). The production of children was treated by Pareto mainly as a means of investing in ‘capital goods’ with expected future returns, not as a means of spending income on ‘consumption goods’ that give psychic satisfaction in the present (see Blaug 1997: 74, for this distinction in connection with classical economics; cf. Razin and Sadka 1995: chs 3 and 4). This put him firmly in the classical Malthusian tradition, as attested by his quotation of Adam Smith’s (1976 [1776]: 98) famous remark that ‘the demand for men, like that of any other commodity, necessarily regulates the production of men’ (Pareto 1896-7: sec. 183; quoted also by Wicksell 1979 [1910a]: 142). Pareto (1896-7: secs 171 and 258) points out that even if most people do not decide rationally their course of action, but act instinctively on tradition and custom, it is still true that such customs are ‘formed under the empire of economic agents’. It was clear to Pareto that his maximum ophelimity result is only valid if parents are able to forecast correctly future demand for labour (which is complicated by the business cycle) and are altruistic (that is, care about the welfare of their children).
