Maurice Allais dies at 99; Nobel Prize winner in economics

Maurice Allais, who won the Nobel Prize in economics in 1988 and was an early critic of shortcomings in the worldwide financial system that led to the latest crisis, has died. He was 99.

Allais, the only Frenchman to win the economics prize, died of natural causes Saturday at his home in Saint-Cloud southwest of Paris, said Yvon Gattaz, a fellow member of France's Academy of Moral and Political Sciences.

French President Nicolas Sarkozy's office hailed Allais' writings on theories of well-being, market shortcomings, growth models and decision-making in an uncertain environment known as the "Allais paradox."

Born May 31, 1911, in Paris, Allais was a prolific economic theorist with ideas about balancing supply and demand that helped rebuild France's postwar economy. The author of dozens of books, he also wrote about history and physics.

Trained as an engineer, Allais turned to economics after seeing the poverty and unemployment in the United States on a visit during the Great Depression.

Allais said he had been motivated to take up economics "to improve the conditions of life, to try to find a remedy to many of the problems facing the world.… I saw it as a way of helping people."

His complex mathematical theories formed the basis for sorting out 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?

U.S. Nobel economic laureate Paul Samuelson once was quoted as saying that a generation of economic theory would have taken a different course if Allais' earliest writings had been in English.

A year after a financial crisis erupted in 1998, Allais wrote a book whose French title translates as "The World Crisis Today" — a broad-scale appeal for reform of global financial and monetary systems.

"This book was prophetic," said Gattaz, a former head of France's leading employers' union. "He explained, 'If we don't follow my theories, if we continue this neo-liberal laissez faire — this financial speculation without severe controls — we're going to fall back onto the same phenomena of 1929 and 1998.' "

"That's exactly what happened," he added, referring to the recent global financial crisis. "One can say Maurice Allais predicted everything that is going on now. Everything."