Pareto’s Law of income distribution accepts a certain level of inequality as
natural, while Pareto Efficiency is known to have a trade-off relationship with
equality. Both indicate Pareto’s conservative nature. Nevertheless, he has a
progressive side as well in his pursuit of equilibrium. Pareto claimed that
circulation of elite is essential for a well working economy. An economy with
severe income inequality in which wealth and poverty are transmitted across
generations would not function well. Economic growth may lessen inequality
dynamically. Efficiency and equality can be in a virtuous cycle.