We need to abandon the economist's notion of the economy as a machine, with its attendant concept of equilibrium. A more helpful way of thinking about the economy is to imagine it as a living organism.

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.

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.

The second part of the New Right's policy package has been the belief that free-market solutions are always best. It is this latter view which is profoundly mistaken. Markets and profits are crucial, but the pure free-market model itself is deeply flawed.

The behavior of the economy as a whole, at the aggregate, macro-level, is built up from the individual equations at the micro-level.

The reader might reflect that an awful lot of supposing has to take place in order for the quantity theory of money to be true.

Books proliferate, and occasionally sell in very large numbers, which claim to have found the rule, or small set of rules, which will guarantee business success. But business is far too complicated, far too difficult an activity to distil into a few simple commands ... It is failure rather than success which is the distinguishing feature of corporate life.