The linear, mechanistic view of the world which pervades orthodox economics is simply not capable of capturing the richness and complexity of the rhythms and fluctuations of developed economies.

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.

By any reasonable criteria, the discipline of economics as a whole, in its present state, is sadly lacking.

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.

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.

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

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.