Topics: Economics, Adam Smith, Supply and demand Pages: 7 (1983 words) Published: August 7, 2013

Submitted by:

Janine Villacorta

10- Aristotle

Submitted to:

Teacher Erwin Manalastas


Maurice Felix Charles Allais was a French economist and a proud recipient of Nobel Memorial Prize in Economics. He was conferred this honor for his commendable contribution to the theory of markets and efficient utilization of resources. He was the first French citizen to receive the Nobel Prize. Allais showed that his insights could be applied efficiently to set prices for state owned monopolies of which France had many. Allais didn't get credit as early as his English contemporaries did as he primarily wrote in English and not French. As said by Paul Samuelson, a noted economist, "Had Allais' work been in English, a generation of economic theory would have taken a different course". Allais also helped resolve issues regarding monetarism, which is the quantity theory of money and the utility theory. Besides his avid interest in economics, Maurice Allais had a great interest for physics and he performed experiments in gravitation, special relativity, and electromagnetism and discovered the Allais effect.

The Economist

As an economist, Maurice Allais contributed heavily to decision theory, monetary policy energy, transport and mining. He made a great mistake by not translating his work into English. Most of his major works including the concepts of ‘overlapping generation model', ‘golden rule of optimal growth' and ‘behavioral economics' were written in French. However, these concepts were discovered and popularized only by the English-speaking economists like Paul Samuelson, Edmund Phelps, Daniel Kahneman, and Amos Tversky much later.

Maurice is particularly associated with the ‘Allais paradox', a decision problem he presented in 1953, which contradicts the ‘expected utility hypotheses'. Maurice took economic studies for both private and nationalized firms and for the European Economic Community. He was very active as a national and international rapporteur at conferences as was the rapporteur at the "NATO in quest of cohesion" conference in 1964 at Georgetown University. From 1959 to 1962, he was also founder and general delegate to the ‘Movement for a Free Society, a liberal para-political organization.

In 1992, Maurice Allais criticized the Maastricht Treaty for its excessive emphasis on free trade. He also expressed reservations on the single European currency. In 2005, he expressed similar reservations concerning the European constitution. ADAM SMITH

Adam Smith is often touted as the world's first free-market capitalist. While that designation is probably a bit overstated, Smith's place in history as the father of modern economics and a major proponent of laissez-faire economic policies is quite secure.

Invisible Hand Theory

"An Inquiry Into the Nature and Causes of the Wealth of Nations" documented the industrial and development in Europe. While critics note that Smith didn't invent many of the ideas that he wrote about, he was the first person to compile and publish them in a format designed to explain them to the average reader of the day. As a result, he is responsible for popularizing many of the ideas that underpin the school of thought that became known as classical economics.

Other economists built on Smith's work to solidify classical economic theory, which would become the dominant school of economic thought through the Great Depression.

Laissez-faire philosophies, such as minimizing the role of government intervention and taxation in the free markets, and the idea that an "invisible hand" guides supply and demand are among the key ideas Smith's writing is responsible for promoting. These ideas reflect the concept that each person, by looking out for him- or herself, inadvertently helps to create the best outcome for all. "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Sfsdfs Essay
  • US financial crisis Essay
  • Essay on TATA Steel 2009 to 2013

Become a StudyMode Member

Sign Up - It's Free