In the 1990s he delighted eurosceptics by his opposition, almost unique among French economists, to the single European currency; europhobes were less enthused when he revealed that he was against it because the currency's introduction should have been preceded by wholesale European political union.
He had won his Nobel for Economics in 1988. But he might also have been a candidate for the award in Physics, a discipline in which he was best known for his discovery that Earth's gravitational pull appears to increase during a solar eclipse.
Fluctuations have since been measured during 20 or so total solar eclipses, but the results remain inconclusive, and the "Allais effect", as it is known, continues to confound scientists. Allais himself had little doubt that the effect indicated a flaw in Einstein's theory of relativity. Indeed, he had little time for Einstein who, he claimed, had plagiarised the work of earlier scientists such as Lorentz and Poincaré in his 1905 papers on special relativity and E=mc2.
As an economist, Allais had reason to complain that others had been given credit that was his due. In his first major work, A la Recherche d'une Discipline Economique (1943), he proved mathematically that an efficient market could be achieved through a system of equilibrium pricing (when prices create a balance in demand with what can be supplied).
It proved vital in guiding the investment and pricing decisions made by younger economists working for the state-owned monopolies that proliferated in Western Europe after the Second World War – and for the authorities regulating private sector monopolies in an age of denationalisation.
He was awarded the Nobel for his "pioneering contributions to the theory of markets and efficient utilisation of resources", but the award was late in coming. His work has been compared favourably with that carried out at the same time or later by the American Paul Samuelson and the British economist John Hicks, both of whom won Nobel Prizes in the 1970s. Allais's work also served as a basis for the analysis of markets and social efficiency carried out by one of his former pupils, Gerard Debreu, who won the Nobel Economics Prize in 1983 after he became an American citizen, and Kenneth Arrow, who won the prize in 1972.
The main reason why Allais was overlooked for so long appears to be that he did not publish in English until late in his career and as a result did not gain the international recognition that was his due. Paul Samuelson felt that, had Allais's early works been in English, "a generation of economic theory would have taken a different course".
The son of a cheese shop owner, Maurice Allais was born in Paris on May 11 1911. After his father died in captivity during the First World War, he was raised by his mother in reduced circumstances.
A brilliant student at the Lycée Louis-le-Grand, Allais trained as an engineer at the Ecole Polytechnique and worked for several years as a mining engineer. He turned to economics after being appalled by the suffering he saw during a visit to the United States during the Great Depression. He taught himself the subject and soon began to teach it at the Ecole Nationale Supérieure des Mines de Paris, introducing a mathematical rigour into the French discipline, which at that time was mostly non-quantitative.
Allais's most important contributions to economic theory were formulated during the Second World War, when French academics, working under German occupation, were largely cut off from the outside world.
John Hicks, one of the first Allied economists in Paris after the liberation, recalled making his way to an attic where, once his eyes had adjusted to the dark, he could see a group with miners' lamps on their heads listening to a lecturer at a board. The lecturer was Allais, and he was talking about whether the interest rate should be zero per cent in a no-growth economy. This foreshadowed his second major publication, Economie et Intérêt (1947), a massive work on capital and interest which has formed the basis for the so-called "golden rule of accumulation". This states that to maximise real income, the optimum rate of interest should equal the growth rate of the economy.
Allais's book also included the suggestion that in stimulating an economy it is helpful to use a simple model consisting of two generations, young and old. At each step, the old generation dies, the young generation grows old, and a new young generation appears. The model, now known as the overlapping generations model, got little attention at the time, but more than a decade later Paul Samuelson introduced the same idea independently.
Allais's work had more than theoretical importance. When France rebuilt its economy on a combination of state dirigisme and market economics, Allais provided the theoretical framework needed to allow planners to resist the short-termism of politicians and set optimum pricing and investment strategies.
During the 1950s he pioneered a new approach when, in examining how people respond to economic stimuli, he asked a group to choose among certain gambles, and then examined their decisions. He discovered that the subjects acted in ways that were inconsistent with the standard theory of utility, which predicts that people will behave as rational economic beings. As a result he created the "Allais Paradox", an equation that predicts responses to risk.
Allais, who served as director of research at the National French Research Council, remained active and independent-minded until well into his eighties. Shortly before the stock market crash of 1987 he wrote a paper warning that the situation presented "three fundamental analogies with that which preceded the Great Depression of 1929-1934: a great development of promises to pay, frenetic speculation, and a resulting potential instability in credit mechanisms, that is, financing long-term investments with short-term deposits."
In 1989 he warned that Wall Street had become a "veritable casino", with loose credit practices, insufficient margin requirements and computerised trading on a non-stop world market – all contributing to a dangerously volatile financial climate.
In a recent article he argued that a "rational protectionism between countries with very different living standards is not only justified but absolutely necessary".
Allais was a prolific writer, both in the length of his pieces (his books typically ran to 800 or 900 pages) and in the variety of subjects he addressed. As well as works on economic theory and physics, he also wrote books on history.
Maurice Allais was appointed an officer of the Légion d'honneur in 1977 and grand officer in 2005. He was promoted to Grand Cross of the Légion d'honneur earlier this year.
His wife, Jacqueline, died in 2003, and he is survived by their daughter.
Paul E. Gottfried
Paul Gottfried has spent the last thirty years writing books and generating hostility among authorized media-approved conservatives. His most recent work is his autobiography Encounters; and he is currently preparing a long study of Leo Strauss and his disciples. His works sell better in Rumanian, Spanish,Russian and German translations than they do in the original English, and particularly in the Beltway. Until his retirement two years hence, he will continue to be Raffensperger Professor of Humanities at Elizabethtown College in Elizabethtown, PA.