Adam Smith and his ancestors -- Harnessing self-interest: Mill, Sidgwick, and the evolution of the theory of market failure -- Marginalizing the market: Marshall, Pigou, and the Pigovian tradition -- Marginalizing government I: from La Scienza delle Finanze to Wicksell -- Coase's challenge -- Marginalizing government II: the rise of public choice analysis -- Legal fiction: the Coase theorem and the evolution of law and economics.