Even in financial markets, the concept of market efficiency does not hold.

At 2 per cent growth a year, an economy doubles in size in just thirty years.

The model of competitive equilibrium which has been discussed so far is set in a timeless environment. People and companies all operate in a world in which there is no future and hence no uncertainty.

Once the true relationship between inflation and unemployment is understood, with luck and skill, a free lunch is possible.

In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.

But Adam Smith was a philosopher as well as well as an economist, famous in his time as much for his Theory of Moral Sentiments as for The Wealth of Nations. And as he understood so well, society is more than the sum of its individual parts.

The obstacles facing academic economists are formidable, for tenure and professional advancement still depend to a large extent on a willingness to comply with and to work within the tenets of orthodox theory.