on February 11, 2014
I received a free copy of this book from the publisher in exchange for an honest review.
I have to say I started this book expecting a touchy-feely, "when life gives you lemons, make lemonade" tome full of inspirational stories and ten point lists of Things You Can Do To Turn Your Life Around.
Instead, the book turned out to be a thoughtful, well researched discussion of failure, from medical mistakes to personal job loss to the economic crash of 2008.
As it turns out there is a lot of useful information in this book. It's presented in such a way that you understand why you handled your own mistakes and failures the way you did, as well as offering advice that could help you change the way you handle things in the future.
There are times where I disagreed with McCardle's reasoning (cutting off employment benefits for example). She is a Libertarian blogger, so she does show her bias. But she makes her case without resorting to vitriol or disrespect.
I volunteer with an organization that helps unemployed people find jobs and I plan on donating my copy of "The Upside of Down" as a reference book.
on February 13, 2014
Failure. We've all experienced it. Can we benefit from it? The answer is maybe, depending on the costs of failure.
If the costs of failure are high, e.g., repaying debts for the rest of life, people will avoid taking risks. As a result, society will stagnate, because few take risks.
But if the costs of failure are low, people will take more chances, start more businesses, try experiments that might prove something bold. That is one great thing about America; the penalties for failure are low. Some have said we are the land of unlimited second chances. After resigning from the presidency, Richard Nixon became an influential voice on foreign policy.
Megan McArdle uses her own life and many other societal problems to illustrate how a proper use of failure can benefit individuals and society as a whole. Failure is how we learn. As some have said, "The wise learn from the failures of others, normal people learn from their own failures, but the stupid don't learn."
I enjoyed this book a great deal, but I want to point out a few of the chapters that particularly struck me.
In Chapter 8, she described the various ways that ideologues described the causes of the financial crisis. The Left and the Right chose their own monologues to explain the economic failure that occurred. The truth was far more banal, as average people bought into a housing mania, with financial institutions more than willing to facilitate it, levered as they were. When the bull market ended, many people found themselves with too much debt relative to the value of their houses.
Chapter 9 was the one from which I learned the most, as it described a probation method used in Hawaii, that I would describe as the judicial equivalent of spanking. When one on probation violates a term of probation, he gets sent to a rather grim prison for a short period of time. Like spanking, it is short, and sharp. Those on probation get tested randomly and regularly. Most quickly get the idea that they need to change their lives. The recidivism rate on this program is low. Small failures get punished. Resistance to the system means permanent jail. No failures means freedom.
But what I really appreciated in the book was the willingness of the author to expose her own life failures -- jobs, caring for her mother's health, bad relationships, etc. She learned from her mistakes, and ended up with a husband who loves her, a good job, and a home in DC, where there is not much debt on the property. Well done.
My own life has had its share of failures, and they have all taught me something. The question to you, reader, is what have you learned from your failures? Memorialize failures, so that you can avoid them and their cousins in the future. In that sense you can fail well.
There is not a bad chapter in this book. I recommend it highly, and you will learn a lot. I learned a lot.
Who would benefit from this book: Anyone could benefit from this great book.
on February 11, 2014
The Up Side of Down argues that we all must learn to fail a little better, a little faster and to, most importantly, learn from the experience. There is no growth without failure, whether we’re talking economies or individuals.
McCardle bolsters her case with examples from business, medicine, physchology and economics. Discussing everything from the learning styles of children to the Solyndra debacle, she offers a kaleidoscope-look at the varieties of American failure.
And she makes a really important point on failure – we’re a nation founded by people who couldn’t hack it in the Old World. It wasn’t comfortable lords who built this country but starving peasants willing to risk a sea voyage for the opportunity to start anew. These failures created the greatest nation on earth.
One of the best chapters in the book discusses the plague of long-term unemployment, a problem once unique to Europe that has become an American scourge. McCardle writes with great compassion about people who have been unemployed for longer than a year, and the cruelties of the job market that keep them that way. She likens unemployment to a dark room that you’ve stumbled into. The people who get out are the ones who keep moving, pursuing multiple opportunities in hopes that one of them will pay off.
This is not a gooey self-help book. Instead, it's a master class on the benefits of failure, exploring research and case studies to make the argument that failure is a great teacher and an inevitable step on the road to success.
on March 23, 2014
"Multiple iterations almost always beats single-minded focus around a single idea." We don't have to get it right the first time, or even a majority of times. Instead, it is in getting things wrong that we learn to ultimately get them right. Megan McArdle writes a fun, engaging, and convincing book that tells us success is often learned through failure.
While most of us pay lip service to the value in making mistakes, few of us truly live this out functionally in our lives. We are not talking in this book about minor lapses in judgment; we are talking about full-blown failure -- a collapsed company or a bankrupt individual. If we really believed failure was actually beneficial to us, we would have started that business, begun writing that blog, asked out that attractive girl/guy, or flailed in front of the entire company for the big presentation.
Her style reminded me of Gladwell - her writing is readable, and loaded with relevant, interesting stories. It's a non-fiction book that reads like fiction. McArdle's book could benefit anyone, regardless of vocation or political beliefs. While she is a libertarian blogger, McArdle was willing to point out the good and the bad of both conservatives and liberals. In other words, she does not come off as a "bunker mentality" libertarian (I myself am a libertarian, so I make that comment from inside the camp).
There are ten chapters in the book, and every one of them was interesting to me. I will comment briefly on the three chapters I found most beneficial.
In chapter one, "Failure is Fundamental", we see the difference between those that "think talent is a fixed thing that you're either born with or not", versus the people that think talent is "something you can nourish by doing stuff you're not good at." Applying this to parenting, McArdle explains we should praise children for how hard they worked at something -- rather than telling them how pretty or smart they are. The kids did nothing to learn or develop those latter qualities, hence leading them to believe giftedness is inherited (false). Clearly, the viewpoint that failure is critical runs counter to today's public school system and community sports leagues, where every kid is "special" and a "winner".
In chapter nine, "Punishment", McArdle recounts the dramatic success of Hawaii's Opportunity Probation with Enforcement Program (HOPE). HOPE has drastically cut incarceration rates and drug use among probationers in the program, using the principle that punishment (i.e. consequences) must be applied swiftly, consistently, and with an eye toward the future (hope for the prbationer's future success, not on their past mistakes). McArdle dovetails this story with the applications for parents in disciplining their children.
In chapter ten, "Forgiveness: How I Learned to Stop Worrying and Embrace Easy Bankruptcy (Though Not Personally)", the content is framed by the story of Dave Ramsey, one of America's foremost personal finance gurus. McArdle shows us that easy bankruptcy laws in the US are surprisingly a boon to entrepreneurship. Entrepreneurs can take a big risk on starting a company - with bankruptcy as a viable last resort if things go wrong. She points out that many European nations have extremely stiff bankruptcy laws (that is, laws making bankruptcy follow a person their entire life), and what follows these tight laws is a much lower level of entrepreneurs in those countries.
While I was generally positive on this book, there were times I felt the book contained too many anecdotes. If anecdotes are accompanied by plentiful hard data, that's great. But sometimes in this book, McArdle seemed content to let the anecdotes stand alone for her views. For instance, in the "Forgivness" chapter dealing with debt, she recounts the story of Kennet, a Danish photographer. In short, Kennet went bankrupt after the housing market crashed and his business income faltered (partly thanks to the rise of digital photography, a game-changer for his industry). Kennet was saddled with an "$80,000 debt, and thousands in annual interest payments." Kennet is made out to be a sad story of helpless citizens being unable to shed their debt. Rather than change careers, add a second job, or cut his spending to the bone ("beans and rice", in the words of Dave Ramsey), he wanted to keep on as life was before it all went south. Yet, anyone who has seen or heard of the powerful debt turnaround stories of people following Dave Ramsey's message would quickly realize than $80K of debt is anything but insurmountable. Kennet's story was brought up repeatedly throughout the chapter, which gave it much more weight (in McArdle's eyes) than I felt it merited. Check out the website No More Harvard Debt, then tell me if $80,000 of debt is the equivalent of lifelong servitude to creditors. No way.
The major takeaway for me is to take more chances. Heck, even writing this book review is me risking failure. Because I know the unwritten review in my head is always going to be better than the mediocre review that is typed onto my computer screen. But the act of doing - and sometimes failing - will refine me in the process, and lead me closer to success.
on February 11, 2014
Ms. McArdle has a wry, sometime cynical sense of humor. Her own story of how she did NOT get married is insightful, once you get past the fact that it can't have been much fun at the time. Same with Megan's mom's appendix. Interesting now. Then, ick. What makes this book so terrific, though, is the way the author actually does connect with her central theme of learning from failure. Her fiance didn't fight because he didn't really want to get married. Her mom's appendicitis felt better because her appendix had burst. A wonderful, warm book. I alternated between laughing out loud and writing down a list of "things to do from now on" while I read it.
on November 6, 2014
I kept waiting for this writer to get to the point. She has loads of interesting anecdotes and examples, but... at the end of every chapter, I kept wondering, "what am I supposed to 'take away' from this?" She keeps promising to "tell us what to do about the problem" but never really does.
To sum up as best I can the premise here, it is that we are becoming a risk-averse society, and that has profound consequences for our future. Helicopter parenting, the absolute fear of failing to get into the best schools, the aversion to bad grades, all lead to an inability to take chances in adult life. The author correctly points out that innovation is only achieved through taking risks.
Part of the problem is that the author sometimes seems confused about the difference between "calculated risk" and "failure." Sometimes a "failure" is foreseen, or rather, built into the plan - this might work, it might not, I'll take the chance, OK, it didn't work, next idea... That to me is not a "failure." It's a calculated risk - it's something that one undertakes KNOWING that it has a good chance of not working, but that you're going to learn from the attempt regardless of whether it works or not. "Failure" is when you think you are doing everything right, and it goes tragically wrong. Distinguishing between calculated risk and "making a huge mistake" would be helpful in the book.
I think the author's bottom line is that being willing to fail, and being able to get back up and move on from failure, is the key to long-term success, innovation, entrepreneurship, and so on. That's all true but not a blindingly new insight. The author also shows many ways in which Europe stifles innovation and entrepreneurship by reducing "risks" -- how good plans fail, in other words -- while elements like America's ability to easily declare bankruptcy actually improves the economy in the long term.
I enjoyed reading the book. I just didn't get a huge sense of having learned anything significant, or getting a "call to action" that might help me either learn more from my own failures or improve the state of the world at large.
on March 16, 2014
While the book presents an interesting range of observations and theories around the concept and handling of failure I felt that it suffered from a surfeit of anecdotes that distracted from the core message. This is not to deny that the book is well researched and referenced and often does cite research, but it is sometimes easy to get lost in the "human interest" that takes up a significant part of the text. I think the book would be better in a more concise version or with the addition of a concluding summary chapter that ties together the points of the individual chapters.
on March 23, 2014
You know you're off to a good start when you find a gem in the preface.
"The metaphor for our age is the disappearance of high monkey bars from playgrounds across the country. We have made it impossible for children to fall very far-- and in so doing, we have robbed them of the joys of climbing high."
This is a must read for "Generation Entitled", of whom 29% are still living with Mommy and Daddy, afraid to step into the void and see if anything will catch their foot.
on July 21, 2016
I'll admit that I came into this book with a low opinion of the author. Reading it was an act of curiosity. Megan McArdle has a history of denying that she's ever made any mistakes (be they erroneous forecasts or professional/ethical lapses), so the nature of the book was intriguing. But the book is such a mess that it's hard to learn much of anything from it. I'm quite certain the author didn't.
The Upside of Down is amazingly disjointed and meandering, more a collection of vaguely relevant studies and anecdotes than a book with a unifying thesis. The first chapter introduces this junk drawer approach, containing assorted stories from the business world, a discussion of mindset theory, a bit of "everyone gets a trophy" mythmaking and an irrelevant conclusion about arcade games. It doesn't improve from there. Much of the book is internally inconsistent. The author argues in one chapter that large organizations are so complex that there's no way to fully understand why they fail, and in the very next she professes to know unambiguously why General Motors had financial troubles. She's claimed at length (in the book and elsewhere) that you have to study failure because success is systemic and you can't learn anything from it, only to turn that around in the chapter on the 2008 financial crisis and claim that it's actually failure that's systemic and there's no point in trying to figure out what went wrong - apparently the worst financial crisis in recent history is just one of those things that happens.
The writing is similarly incoherent. The style is odd - it's meant to be a business book, but it's laced with long personal asides and partisan political arguments that don't fit that theme at all (Does a chapter on bailouts really need five pages on the author's love life?). At the same time, there's too much business-oriented content for it to have much appeal to a general audience. Some chapters even veer into an incongruous narrative style that stands out even more. She often makes note of counterarguments to her theories, only to move on without ever addressing them. In fact, argument is one of the weakest aspects of her writing - in Chapter 8, she refuses to even name any of the economists who disagree with her theory that no one was at fault for the economic crisis, content to give broad synopses of their arguments and then liken them to 9/11 Truthers.
The only way I can find to make a coherent thesis out of The Upside of Down is by splitting it into two separate sets of advice for two separate groups. One group must be given freedom, allowed to take big risks and forgiven their failures and missteps. The other group would succumb to moral hazard if given such freedom and must instead be kept to a risk-mitigating process through regimentation and punishment. It's not hard to imagine with which group the author associates.
In sum? There's nothing in The Upside of Down that you couldn't read in any number of other books written by authors who know how to make a coherent case. If this is meant to be McArdle maturing as a journalist, then she's got a long, long way to go.
on February 17, 2014
I have long been an avid reader of Megan's blog, first at the Atlantic, and now at Bloomberg (skipping over her brief interlude at the print version of MSNBC). She has a distinctive voice - educated yet not condescending, with wit and irony and an ear for the fatuousness that fills up so much public discourse. So I was delighted to see she had written a full-length book - until I saw the title and description of the subject, which frankly seemed a well-worn one to which little could be added. Nonetheless, I decided to buy it to show my support for her work, which I have long valued.
To my surprise, I found the book much stronger than I had feared. It is a somewhat loosely related set of essays on different aspects of failures, including sections on "blame", "punishment" and "bankruptcy". Her overarching thesis is that success and progress result mainly from trial and error; failure is therefore valuable as long as lessons are learned; so, failures, at least those of an entrepreneurial or personal scale, need to be put in the overall context of striving and not become lifelong burdens and deterrents, either in one's personal life or in the society one lives in. I just finished reading "Mass Flourishing" by Edmund Phelps and this book seems to me in the same vein albeit much more informally written.
Her lively, witty and pithy writing style makes the subject come alive, and in several instances, she draws upon personal experience to illustrate her themes. I felt the middle chapters, especially the one on Dan Rather's and CBS' 2000 fiasco were unexpectedly powerful.
OTOH, as they say in blogger land, her use of that episode illustrates that the book is a little loosely organized. Her chapter on bankruptcy was a little superficial as well (bankruptcy is not just a choice between chapter 13 and being harassed by your creditors; chapter 7 is usually available and often the best available alternative, but she underplays that complicating factor). Towards the end she gets a little too far into public policy, discussing the financial crisis, the incentive effects of unemployment benefits, and also an apparently successful probation system in Hawaii, which again illustrates a certain looseness of organization; each is connected with the theme of failure in some way, and none of her discussions was unwelcome, but the overall impression was of a person spreading her analysis a little too thin.
But overall, the book reads very, very briskly and is full of insights and witty phrases that I wound up highlighting (Interestingly, I found few if any other-reader highlights after the first couple chapters which may indicate a lack of finishing, which is too bad because, as I said, the middle chapters carry the most punch; if you buy it, I encourage you to read the whole thing).