Maurice Allais

His first book develops the microeconomic aspect. With Traité d'économie pure, which he wrote between January 1941 and July 1943, based on his contributions, along with Hicks and Samuelson, to the concept of neoclassical synthesis. He anticipates several of the propositions and theorems put forward by Hicks, Samuelson and others, sometimes giving them a more general and rigorous formulation. In particular, he demonstrates the equivalence theorems that Kenneth Arrow and Gerard Debreu will find in 1954: "Every equilibrium situation in a market economy is a situation of maximum efficiency, and reciprocally, every situation of maximum efficiency Is a equilibrium situation in a market economy. " The market thus ensures economic efficiency and optimal distribution of income in the nation. At the same time, Samuelson exposed the process of trial and error which leads to the equilibrium of markets.

In 1947, in the second part of his work Économie et Intérêt, Allais introduced time and currency and thus tackled the dynamics and growth of capitalist economies. Again, he made several proposals, that would be later attributed to other, better-known economists. He introduced the first overlapping generations model(OLG model) (later popularized and attributed to Paul Samuelson in 1958), introduced the golden rule of optimal growth before Trevor Swan and Edmund Phelps, show that an interest rate equal to the growth rate maximizes consumption. He also described the transaction demand for money rule before William Baumol and James Tobin[7]

He was also responsible for early work in Behavioral economics, which in the US is generally attributed to Daniel Kahneman and Amos Tversky.[8] In the 1940s, Allais worked on "decision theory" (or "theory of choice") under uncertainty and developed a theory of cardinal utility. Due to war conditions and his commitment to publish in French, his work was undertaken independently of Theory of games and economic behavior developed by John von Neumann and Oskar Morgenstern. He formulated the Allais paradox in 1953, which questions the traditional model of rationality of choices and contradicts the expected utility hypothesis. It shows that when confronted with a lottery, an individual does not maximize his hoped-for gains, but rather aims at certainty.

Although he participated in the Mont Pelerin Society, Allais was convinced of an affinity between liberalism and socialism, stating: "‘For the true liberal, as for the true socialist, it matters little whether the means of production are privately or collectively owned, so long as the essential goals they pursue, namely efficiency and justice, are achieved."[9] He advocated "competitive planning" as a "possible synthesis of liberalism and socialism."[9] In 1959, he and other French members of Mont Pelerin such as Jacques Rueff established an organization called Mouvement pour une société libre which spoke readily of a social liberalism that would go "beyond laissez-faire and socialism."[9]

Finally he criticizes the drifts of a discipline that privileges mathematical virtuosity at the expense of realism. With this "new scholastic totalitarianism" he moved away, in the 60s, from the analysis of the general equilibrium developed by Walras and replace it with a study focusing on real markets rather than a utopian market, favoring the study of imbalance and based on the idea of surplus. The economic dynamics are thus characterized by the research, the realization and the distribution of a surplus and there is a general equilibrium when there is no longer any realizable surplus.

Allais’s Hereditary, Relativist and Logistic (HRL) theory of monetary dynamics contains an original theory of expectations formation that is a genuine alternative to both adaptive and rational expectations.[10] It was praised by Milton Friedman in 1968 with the following words: "This work [the HRL formulation] introduces a very basic and important distinction between psychological time and chronological time. It is one of the most important and original paper that has been written for a long time … for its consideration of the problem of the formation of expectations".[11] Allais's contribution has nevertheless been "lost": it has been absent from the debate about expectations.[12]

On the first page, he dedicates his book La mondialisation: destruction des emplois et de la croissance (1990), Globalization: destruction of jobs and growth, "To the countless victims worldwide of the free-trade ideology, ideology as fatal as it is erroneous, and to all those who are not blind to some partisan passion".[13] Allais believes that Ricardo's theory is valid only in a steady state, but disappears when the specializations evolve and when the capital is mobile.

According to him,[3] "Globalization can only bring everywhere instability, unemployment, injustices [...] and "widespread globalization is neither inevitable nor necessary nor desirable". He considers that[14] "unemployment arise from the offshoring, themselves due to the excessive differences in wages"; "reasoned protectionism between countries with very different incomes, is not only justified but absolutely necessary"; and the absence of protection will destroy all industries of each country with higher incomes.

In his opinion, crisis and globalization are linked: "The financial and banking crisis which, is only the spectacular symptom of a deeper economic crisis: the deregulation[15] of competition in the global labor market[16]". "Current unemployment is due to this total liberalization of trade[...] As such, it constitutes a major foolishness, starting from an unbelievable contradiction. Just as attributing the crisis of 1929 to protectionist causes is a historical contradiction. The true origin was already in the careless development of credit in the years preceding it."

In 1992, Allais criticised the Maastricht Treaty for its excessive emphasis on free trade. He also expressed reservations on the single European currency.[17] In 2005, he expressed similar reservations concerning the European Constitution.[18]