In a rather neatly argued paper "Why Have the Socialist Been Winning?", George Stigler contrasts mistake theories of the growth of government with bias theories of the growth of government and ultimately with rational theories of the growth of government. I want to focus my comments on the mistake theory, mainly because it is the one that I adhere to. But Stigler suggests that perhaps people like me are not fully shouldering the burden of proof that we must. In short, Stigler's argument is making me think through my position. He has a way of reasoning and asking questions which is very helpful for testing the weak points in one's understanding of the issues in political economy and public policy.
"Overwhelmingly," Stigler states, "the most popular explanation for the growth of government, among those opposed to the trend, has been that it was a mistake: a mistake in the literal sense that a misinformed populace has acted against its own interests." But Stigler argues that we economists do not have an operational theory of mistakes, and that unless we develop a theory of the kinds of mistakes that are made in public opinion and public policy, an explanation based on a broad and sweeping claim about mistaken opinion that persists within the polity must be judged vacuous. Persistent and widespread social phenomena cannot be satisfactorily explained by mere reference to mistaken opinion. To get an satisfactory explanation we have to postulate an economic theory of mistakes -- and economics of error --- and Stigler says we haven't even developed a mistaken theory of mistakes as of yet within the economic way of thinking. We are at ground zero in this regard as a research enterprise among economists.
"The fundamental objection to the 'mistake' theory," he argues, "is that it flies in the face of both our general knowledge of society and the facts of socialization in our times. If deception by intellectuals were the motive force of social change, we would expect to observe on numerous occasions on which a group of conservatives with large powers of persuasion had captured the public's fancy, and succeeded in initiating a regime of declining governmental activity. After all, which socialist philosopher has been as profound as Hayek, which socialist propagandist has been as lucidly logical as Friedman?"
How would you respond to Stigler's questions?
Is an economically coherent theory of mistakes possible?
Can those mistakes persist without implying that our identification of them as a mistake is an illusion?
Can ideas lead societies astray, and can ideas also save a society from ruin?