Frenchman Wins Nobel for Postwar Economic Theory

Maurice Allais, a Paris shopkeeper’s son who became a giant of economic theory, won the Nobel Prize for economics today for theories on markets and prices that helped rebuild France’s economy after World War II.

Allais, 77, developed formulas to make it possible for large enterprises, particularly public ones, to keep an economy in balance by regulating prices and allocating their resources.

After the award was announced, Allais said he had given up hope of ever winning the economics prize, which was established 20 years ago. “I’ve been mentioned so many times before, I just didn’t think I would get it,” he said from his apartment in a Paris suburb.

The poverty and unemployment Allais saw in the United States, on a visit during the Great Depression of the 1930s, turned him to economics from the engineering career for which he had trained.

‘It Took a Long Time’

“He is a giant in economic theoretic analysis,” said Assar Lindbeck, who heads the committee of the Royal Swedish Academy of Sciences that awards the Nobel Memorial Prize in Economic Science.

“He’s been under consideration for a long time,” Lindbeck said. “It took a long time to investigate him because of the great volume and complexity of his works.”

According to the citation, Allais was honored “for his pioneering contributions to the theory of markets and efficient utilization of resources.”

Allais did his major work in Nazi-occupied France during the war. He published “In Search of an Economic Discipline” in 1943 and “Economy and Interest” in 1947.

Postwar Mentor

Jacques Levy, director of the Ecole Nationale de Mines, said: “He was the mentor for everyone involved in the economy in postwar France between 1945 and 1968, all the people who were in charge of the biggest enterprises and of the state planning apparatus.”

Allais taught at Levy’s institution until his retirement nine years ago, and is not widely known outside France. He has continued research and writing.

His theories are expressed in complicated mathematical formulas. They form the basis for sorting out the thousands of independent factors involved in marketing goods and services: How much should a train ticket cost, for example, or what is the right price for a kilowatt-hour of electricity?

Levy said the idea is to keep supply and demand in balance, and according to the Allais theories, “it’s the government’s role to organize this fair competition.”