Ever since Adam Smith presented the world with his immortal classic The Wealth of Nations, liberal market economy has been based on the centrality of opportunity. If only markets can be sufficiently deregulated, and the state can be kept at bay, good things will follow. Entrepreneurs and consumers will seek out and act on their best available opportunities for profit and utility maximization, competition will make sure that all resources are allocated to their best uses, and welfare will be maximized.

Based on such premises, it is not surprising that over time economics has developed into a science that is fundamentally geared toward an optimistic view of market forces driven by the pursuit of self-interest. This stands in some considerable and interesting contrast to the epithet of a “dismal science” that was once ascribed to political economy by the Victorian writer Thomas Carlyle. The reason then was the dire predictions of pending population checks and food shortages that were issued by Thomas Malthus and David Ricardo. That, however, was soon to change.

Under the combined influence of rapid technological development and the neoclassical revolution in economics, a firm belief began to emerge that economic growth would quite simply take care of itself. The previous “dismal” views that had emphasized natural constraints on the market forces could thus be forgotten, and the role of liberal government could be reduced to keeping out of the way.