Dear EH-Listers,  
   
I have been following the exciting debate on "the history of error." My PhD dissertation
is about a close subject, so I wanted to write down what I think about it. Here is how I
understand the issue.
  
1. I personally think errors are not really important in our intellectual lives - they are
not important insofar as we are not stuck with errors and their consequences. For errors
are sometimes corrected. Academic journals, for instance, publish rejoinders, reminders,
and commentaries. And there are long-lasting debates in sciences and philosophy, too.
This, to my view, is a sign that we can achieve some "progress" in sciences and
philosophy. In fact, we now can do open heart operations. We travel around the world in
less than eighty days. Marginalist theory in economics found a solution to why diamonds
are more expensive than water (the theory, of course, created other problems, but it is
another story). In such cases, errors in their history don't really matter much. After
all, if we are getting close to Truth, how can one call something a "mistake"?
   
2. But the situation is more difficult, I think, because we are not always on the path to
Truth. In other words, we are not able to get rid of such errors and failure in the
institutional evolution of sciences. One example is the "Coase Theorem" in economics: In
the third addition of *The Theory of Price* George Stigler writes that "[t]he Coase
theorem thus asserts that under perfect competition private and social costs will be
equal. It is a more remarkable proposition to us older economists who have believed the
opposite for a generation, than it will appear to the young reader who was never wrong,
here" (Stigler, (1966) p.113). The quotation may seem bizarre to economists who have
sincerely read Ronald Coase, especially his _The Nature of the Firm_ (1937). His point in
the article was that we were not living in the best of possible worlds but in a world of
transaction costs. Contrary to what Adam Smith said, Ronald Coase argued, we were living
in a world where markets sometimes did not clear off therefore private and social costs
would not be equal. The naming of the "Coase Theorem" was then basically wrong (for
further argumentation, see an article by Deirdre McCloskey "Good Old Coase Theorem" 1997).
In fact Ronald Coase raised the issue in _The Firm, the Market, and the Law_ (1988, p.15)
and wrote that he actually argued the opposite.
   
When this is the situation the undesirable consequences of such errors accumulate in an
unusual manner - they accumulate in such a way that we cannot correct the errors and
mistakes in the past. In other words, contributing to the literature of the Coase Theorem,
we may be making it harder for ourselves to break free from the "once-secure path," so to
speak.
   
It is very "human all too human," as Nietzsche once said: we make mistakes. We sometimes
correct them, but usually we cannot. I am sure in the history of science and economics
there are more examples of error and mistakes which negatively affect the quality of our
intellectual lives today. Therefore, they, in this respect, are existent and important.
Thus we should teach the history of errors (or, we should be taught, I should say, as I am
still a graduate student).
   
3. And there is one even more difficult and interesting issue: Sometimes we do everything
correctly. We *optimize* while spending our money in supermarkets; we engineer bridges in
the most *efficient* way. But we still have erroneous consequences in the end. This type
of error occasionally appears unintentedly. That is to say, they are never anticipated. We
take all the precautions in life to prevent bad consequences from happening, but still
there may be things, consequently, making us unhappy. The Q-type keyboard is one example
(see Paul David's "The Economics of QWERTY"). The design *was* actually a remedy to a
problem. It *was* a smart design, it *was* efficient. But it was based on a problem (that
is clashing and jamming of mechanical parts of keyboards) which we don't have in digital
systems today. It now causes problems (at least David believes so). And Thorstein Veblen's
"silly little bobtailed" wagons were also an "error" of the same kind. Van Vleck showed
that British carriages were not economically *inefficient* or *irrational* but merely
substitutes for more costly distribution and delivery means such as horses, hay and oats,
trucks, and petroleum fuel. Small wagons were used because they suited to the existing
infrastructure and not because they were economically at the margin (See Veblen in his
Imperial Germany + Van Vleck, "Delivering coal by Road and Rail in Britain: The Efficiency
of the 'Silly Little Bobtailed' Coal Wagons", Journal of Economic History, 57(1), 1997
JEH). Nevertheless it *was* an error simply because Britain wasn't at the forefronts of
the industrial race anymore, and Germany took it over. The examples in this category are
usually those which are produced by the theorists of path dependence and institutional
economics.
   
To conclude: Many economists are uncomfortable with what is happening in economics today
because there are error and mistake in its institutional evolution. Some of them are
correctable; some are not. Incorrectable errors and mistakes are important for various
reasons. One reason is, as all the examples above point at, that we cannot have solutions
to practical problems today and we think reason lies somewhere in history. Obviously the
models of, say, rational choice and overlapping generations did not offer considerable
insight, say, for the Oil conflict in Iraq and the past genocide in Rwanda. It lacks
ethics; it lacks culture. No this and no that. I think we cannot prevent errors and
mistakes from happening. They are in a sense inevitable because economics has become an
institution itself, featuring path dependent properties, producing erroneous consequences.
This is the reason, I think, we should be more knowledgeable about the history of error in
economics.
   
And finally not only errors in history matter. Wrong-headedness, whim, idiocy, irony, and
so forth are important, too. That is to say, they all produce alike consequences...
   
Regards,  
   
Altug Yalcintas