I recently wrote that one of the lazy assumptions of the political-media class is the belief in perfectibility and inability to see that failure is very common. Since writing that, we've seen two examples of what I mean: reports that the cost of two new aircraft carriers is double its initial estimate; and the PAC's claim that the implementation of the new universal credit has been "extraordinarily poor".

Such episodes confirm my prior, that mismanagement of big projects should be regarded as the norm and success as the exception. This is simply because such things are more complex than any single individual can possibly manage; bounded knowledge isn't an individual weakness to be deprecated but rather an ineliminable fact about the human condition.

Our inability to see this leads to the planning fallacy. Imagine that, for a project to come in on time and on budget, 50 separate elements must come together, and imagine that each has a probability of success of 98%. Basic maths then tells us that the probability of the project succeeding is only 36.4%. Sadly, though, many politicians don't know basic maths.

You might think that this just shows us how inefficient the public sector is - which is only to be expected given that incentives are weak and departments are run by the sort of people who give mediocrity a bad name.

I fear, though, that this is too glib.As Paul Ormerod has said (pdf), "failure is pervasive" in the private sector too, and for the same reason - that managers' ability to know enough is severely limited (pdf). For example, around 10% of firms cease trading every year, which means that the chances of long-term survival are very slim.

And bosses are like politicians in at least two respects; they too misunderstand the basic maths which warns that planning is failure-prone. And they too are selected to be overconfident about their chances of success.

Perhaps, then, politicians, journalists and the media share a common ideology - a presumption that top-down management can competently oversee complex events to a greater extent than is the case. This presumption leads then to fail to see that what makes the private sector successful - insofar as it is - is not so much the quality of management as the existence of markets. The general public might have anti-market attitudes - but so too does the ruling elite.