----------------- HES POSTING ----------------- I'm a bit surprised that no one has commented on Sam Bostaph's story concerning Buchanan's view of Allais's Nobel prize- that Allais "...hadn't done anything in twenty years." In fact, Allais published a great deal of economic work in the years between 1968 and 1988. To mention only the most important - a 700+ page work on The General Theory of Surpluses in 1978 (see Allais's account of this work in the New Palgrave's) - numerous works on the quantity theory of money and on the rate of interest from 1968 to 1985, and even much new work on the expected utility hypothesis, the "Allais paradox" etc. On the other hand, Allais's work, aside from his "paradox," seems to have had remarkably little influence on American economists. Buchanan would have been closer to the truth had he said that the prize was awarded to a man who might as well have done nothing in 20 years. The lack of interest in Allais's work puzzles me. I vividly remember Allais giving a seminar to a packed house at the U. of Chicago on his theory of the demand for money in the early 1960's. The talk had a lot us puzzled, but the claims for its empirical power were impressive and exciting. Milton Friedman, in his usual pellucid fashion, explained Allais's theory in terms more familar to most of the audience. Friedman seemed sympathetic to the theory and didn't argue (that night) with Allais's claims that his theory yielded better predictions than the various Chicago quantity equations, despite its requiring fewer estimated parameters. Yet there was little follow-up that I know of and Friedman's article on the quantity theory in the New Palgrave doesn't even cite Allais's work. In his general theory of surpluses, he claims to prove the three fundamental theorems of welfare economics even if production sets exhibit increasing returns to scale! These are very important claims made by a Nobel prize winner, yet I know of no substatial American work evaluating them. I'd be grateful if anyone could explain this neglect or point me toward literature where Allais's work is evaluated. Finally, in contrast to Debreu, Allais is very much concerned with the "real world." Not only has he worked on many "mundane" practical problems, e.g., a book on pricing policy for the state-owned coal mines, but in his Nobel lecture he said that an economic model and the theory it represents must be accepted or rejected on the basis of its correspondance with empirical observations. Further, "When neither the hypotheses nor the implications of a theory can be confronted with the real world, that theory is devoid of any scientfiic interest." He has been very critical of much recent mathematical theorizing that seems unrelated to real world phenomena. Mike Lynch ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]