Maurice Allais (born in Paris on May 31, 1911 – died October 9, 2010, in Saint-Cloud, nearly reaching 100 years old) was a French economist who received the Nobel Prize in Economics in 1988. He was notable for his denunciation of globalization, and especially of the creation of money ex nihilo (out of nothing) by commercial banks. He emphasized that the right to create money should belong solely to the nation. Because of this stance, despite his Nobel Prize, mainstream media rarely invited him to speak on current issues.
In his later years, Allais connected with Swiss social credit advocates, expressing strong support for Douglas's theory of social credit and the idea of a monthly dividend for every citizen. Below are excerpts from two of his writings, concerning free trade, trade wars, and money creation by commercial banks.
Published December 5, 2009, in the French newspaper Marianne, under the form of a "Letter to the French People":
"Deregulating everything, as we have just seen, leads to the worst disorders. One of the many truths that remain unspoken is the real foundation of the current crisis: the organization of world trade, which must be profoundly reformed—even before we tackle the also necessary reform of the banking system."
"The world's major leaders once again display their ignorance of economics, confusing two kinds of protectionism: some are harmful, while others are entirely justified. Harmful protectionism occurs between countries with comparable wages and is generally not desirable."
"However, protectionism between countries with vastly different standards of living is not only justified—it is absolutely necessary. This is especially true regarding China, where it was madness to eliminate tariff protections."
"The same applies to nearby countries, even within Europe. Just consider how to compete against countries with manufacturing costs five or ten times lower—if not more—and you'll see that fair competition is impossible in most cases. Especially against Indian or Chinese competitors, who, in addition to their low wages, are highly competent and driven."
"We must restore legitimate protection. For over a decade, I've proposed forming more homogeneous regional blocs, uniting countries with similar income levels and social standards. These'regional organizations'would be allowed to reasonably protect themselves from cost disparities that unfairly benefit certain competing nations, while ensuring genuine internal competition among their members."
"My proposed system would not harm developing countries. Currently, major corporations exploit their low costs but would abandon them if wages rose too much. These countries would benefit from adopting my model, forming regional unions with neighbors of similar living standards. This would allow them to develop robust domestic markets—large enough to support their production, yet balanced enough so that internal competition isn't based solely on keeping wages low."
"This applies to several Eastern European nations hastily integrated into the EU, as well as to countries in Africa and Latin America."
"Without such protection, high-income countries face the destruction of their industries—especially in Western Europe. Indeed, with the G20's doctrinaire view, all French industry will eventually relocate abroad."
"Globalization benefits only a few privileged groups. But their interests are not those of humanity as a whole. A rushed, chaotic globalization can only bring instability, unemployment, injustice, disorder, and misery everywhere. It will ultimately prove detrimental to all nations."
"The globalist economy, falsely portrayed as a cure-all, recognizes only one criterion: money. It honors only one god: money. Stripped of ethical considerations, it is doomed to self-destruction."
The following quotes are taken from his book The World Crisis Today: For Deep Reforms of Financial and Monetary Institutions (1999):
"In essence, the current ex nihilo money creation by the banking system is identical—I do not hesitate to say it to make things absolutely clear—to the creation of money by counterfeiters, which is rightly condemned by law. In practical terms, the results are the same. The only difference lies in who benefits." (p. 110)
"What I advocate is a system in which money creation belongs solely to an independent Central Bank—free from the influence of the state and political parties—and where the revenues from money creation go entirely to the state." (p. 185)
"The global economy is now built on massive pyramids of debt, propped up by one another in a fragile equilibrium. Never before has there been such an accumulation of promises to pay. Never before has it been harder to meet them. Never before has such potential instability loomed, threatening a general collapse."
"At the core of every economic difficulty is, in one form or another, the harmful role of the current credit system and the rampant speculation it allows. Unless we fundamentally reform the institutional framework in which it operates, we will continue to face the same major issues in various forms. All major crises of the 19th and 20th centuries stemmed from excessive development of promises to pay and their monetization."
"What's particularly alarming is the complete lack of questioning of the very foundation of the current credit system—namely, money creation ex nihilo by banks and the widespread practice of funding long-term loans with short-term deposits."
"Frankly, without exaggeration, today's system of money creation through credit is the'cancer'that is gradually destroying private-market economies."
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