All science is based on models, and every scientific model comprises three distinct stages: statement of well-defined hypotheses; deduction of all the consequences of these hypotheses, and nothing but these consequences; confrontation of these consequences with observed data.
My approach has never been to start from theories to arrive at facts, but on the contrary, to try to bring out from the facts the explanatory thread without which they appear incomprehensible and elude effective action.
I am not a monetarist, and I am not a Keynesian. On certain points I agree with each.
Fascinated by history during my secondary education, then by physics and mechanics at the Ecole Polytechnique, I finally entered the national administration of mines in 1936.
In August 1914, my father was called to war and then taken prisoner. He died in captivity in Germany on March 27, 1915. My youth - indeed, my entire life - was deeply marked by this, directly and indirectly.
I was born May 31, 1911, in Paris. My parents owned a small cheese shop, and my maternal grandfather was a carpentry worker. I thus came from what is commonly known as the working class.
Wall Street has become a veritable casino.
I received my high school baccalaureate diploma in Latin and Science in 1928, then my two baccalaureate diplomas in Mathematics and Philosophy in 1929.
Throughout the years following World War II and until the formation of the European Economic Community in 1958, I was very active as a national or international rapporteur at many of the international conferences aiming to establish an European community.
At the beginning of my career, my desire to understand was associated with a profound desire to act, with the wish to influence opinion and policy; but, over the years, this motivation has come to be of secondary importance, far behind my desire to understand.
My motivation was an idea of being able to improve the conditions of life, to try to find a remedy to many of the problems facing the world. That's what led me into economics. I saw it as a way of helping people.
The reality is that the institutional framework in which Wall Street operates is fundamentally inappropriate, and it inevitably generates violent fluctuations of the market.
It is understandable that the Fed injects cash to avoid the collapse of the stock market, but basically it is bad policy for monetary authorities to intervene to save speculators from bankruptcy. This is not their role.
In principle, junk bonds are basically useful, but they are used excessively and irrationally, notably in takeovers.
It would be just as pointless to oppose the international use of English today as it would have been to oppose the worldwide use of French in the 18th century.
We must take the world as it is and not as we would like it to be.
