The Library of Mistakes is back

As a hidden gem in Edinburgh's West End reopens its doors, I explain the history of the Library of Mistakes and five lessons I've learnt from exploring its collection of almost 4,000 books.

In 2005, Professor Russell Napier published a book with an eye-catching title. Anatomy of the Bear: Lessons from Wall Street’s Four Great Bottoms was a study by the Edinburgh-based finance expert of four huge US stock market collapses, and what we should learn from them. It was also a prescient piece of work that appeared to foretell another significant ‘bottom’ just around the corner – the global banking crisis of 2008.

Following that, Napier was disappointed, if not surprised, to see that many of the mistakes that had led to the banking crisis, were being repeated once more across the financial services sector. People had failed to learn from history – and it gave Napier an idea. He decided to establish a library full of books that would help to remind the world of the serial blunders made in finance and, more broadly, across business, politics and society.

“You may have heard of a heavyweight boxer who once said ‘everyone has a plan until they get a punch in the mouth’,” says Napier. “The books we have in the Library of Mistakes contain thousands of punches that have been dished out over hundreds of years. We set it up so that we can all learn from the mistakes of the past. If you can work out some way of reacting to a punch, you’re going to be better prepared.”

Funded by donors including Baillie Gifford, Kennox Asset Management, Artemis Investment Management and Walter Scott & Partners (see full list in picture below), the Library of Mistakes was opened in 2014. Tucked away in a charming mews building just off Heriot Row, in Edinburgh’s West End, it's beautifully designed and slightly eccentric, with quirky pieces of art and symbols of 'errorism' on display, such as a Bear Stearns baseball cap and a ticket for an Edinburgh tram. Expanded last year, it now consists of three rooms housing almost 4,000 books and is a wonderful place in which to while away a few hours. I'm lucky to have been a frequent visitor in the past couple of years, curating the library’s Twitter and Linkedin pages with content gathered from its collections.

The Library of Mistakes has been closed to visitors during the pandemic crisis but, after terrific work from Librarian Helen Williams, it reopens its doors today (by appointment and subject to sensible COVID-19 precautions). To visit, you must register as a member (it's free) at www.libraryofmistakes.com and then email the Keeper to arrange a time to visit – you simply press a buzzer on arrival and are let in remotely.

But the Library of Mistakes is more than just a wonderful place to visit – it’s a global movement. Napier is encouraging fellow thinkers around the world to open Libraries of Mistakes following the same blueprint. There are now libraries in Pune in India and Lausanne in Switzerland, with more to follow as we emerge from lockdown.

I stumbled upon the library a couple of years ago and was fascinated. I love the quirkiness, the range of books and the important message that we need to get better at learning from the mistakes of the past. The happy hours that I’ve spent there have also taught me a few lessons – here are five of them.

1 Most of us have very short memories

You only have to look at financial crashes, the collapse of RBS or Carillion, and the invasions of Iraq and Afghanistan to see that we're capable of making the same big mistakes over and over again. Some might even make the same arguments about the pandemic crisis. 

As Douglas Adams once wrote: “Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so."

For instance, when do you think this was written? “For decades, government, business and the consumer have been writing checks on empty bank accounts. No money? Get a loan! But now, like a playboy’s day of reckoning in a Victorian novel, all the bad paper is coming at once and the sheriff is at the door with the eviction notice.” 2008 would be a good guess – but The Coming Credit Collapse by Alexander P Paris was actually written in 1980.

2 We need more diversity, and less Alan Bonds

You’ll discover many sorry tales of destructive white, middle-aged men in the Library of Mistakes – indeed, men in general don’t emerge well. The evidence is damning. Men are responsible for the overwhelming majority of the really big mistakes in the world – the ones that start wars, destroy businesses and poison states.

There are three obvious conclusions:

?We need a lot more women in positions of influence in business, in government, everywhere.

?We need a lot more diversity in general.

?And we need less Alan Bonds.

“Alan Bond had plundered his public companies, crushed those little people who happened to get in his way, avoided paying taxes on a massive scale, and bent the rules at every opportunity. He stood for excess, for the idea that greed is good.” The Rise and Fall of Alan Bond by Paul Barry 1990

3 Humility is our friend

If aliens landed on planet earth and asked to be taken to our national leaders, what would they make of them? What impression of human life do the individuals who head up the world’s 196 countries convey?

I used to publish a magazine for the Danish-owned company Maersk Oil (now part of Total). Maersk’s main corporate value was humility or, as they called it, ‘humbleness’. What a brilliant value to champion as a business. If humility (rather than hubris) was embraced more widely by business people and politicians, the world would be a much better place.

As Brian Walters wrote in The Fall of Northern Rock (2008): “Money muddles always start the same way – when judgement is fuddled by greed, ambition and overwhelming self-confidence. Then, when problems arise, there follows an obstinate refusal to admit mistakes and the imminence of disaster.”

4 Mistakes can be gifts

On a more positive note, it's amazing how many inventions happened by accident because someone made a mistake and then realised something useful could be salvaged from the process. Penicillin, plastic, Post-It Notes, Scotchgard, Saccharine, Corn Flakes, the Pacemaker, LSD, choc chip cookies, crisps, microwave ovens, Slinkies, ink-jet printers and x-rays were all created from mistakes. And there are many more out there. In the words of Oscar Wilde: “Experience is the name that everyone gives to their mistakes.” 

5 Mistakes give us character

What makes humans admirable is very often not how they behave when everything is going well, but how they react when they (or others around them) make a mistake. Do we admit our mistakes or try to blame someone else? Do we learn from them? Do we support someone who regrets a mistake they’ve made, or do we chastise or mock them?

Mistakes remind us that we are human; that we are vulnerable. As the musician John Cale once said: “Mistakes make people interesting. They give them character.”

The Library of Mistakes is haunted. But rather than spectral apparitions, the ghosts are trapped within the neatly stacked books lining the shelves, left to ponder their character failures for eternity.

Some of these people are fascinating. Take James Buchanan Brady, better known as Diamond Jim. The book of the same name by Parker Morell tells the colourful tale of an Irish-American investor and businessman famed for his charisma, philanthropy, socialising, crooked deals and huge appetite. For a mid-morning snack, he would regularly consume oysters. Not just two or three oysters but two or three dozen.

“Night after night, ‘Diamond Jim’ turkey-trotted and tangoed in the cabarets and midnight roof gardens, moving slowly uptown to each club in turn as the moon sank lower in the morning sky. With his hands and shirtfront almost covered with jewels, it was often said that he carried his own illumination with him.”

We all have lightness and darkness within our characters but, with personalities such as Diamond Jim, the contrast is intensified. My final quote is from Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay. "Let us not turn with contempt on the follies of our predecessors. The study of the errors into which great minds have fallen in the pursuit of truth can never be uninstructive." Mackay’s book was written in 1852 – and that's something we can all learn from.

?Hear Professor Russell Napier explain the Library of Mistakes in his own words.