Continuing Conversation... McArdle on Failure, Success, and the Up Side of Down
By Amy Willis
Megan McArdle spoke to Roberts this week about her new book, The Up Side of Down. Let’s keep the conversation flowing; we love to hear from you, your students, your kids, your friends…
Questions below the fold.
Check Your Knowledge:
1. What does McArdle mean by “self-handicapping,” and why does she suggest people use it so frequently? Do you self-handicap? Why?
2. Roberts says, “Sunk costs are sunk, and it’s best to move on” in the context of personal relationship failures. In what other circumstances would this be good advice, and why?
3. Roberts pushes back on the value of failure by suggesting “survivorship bias.” What does he mean by this, and how might it suggest that the value of failure may not be as strong as McArdle asserts?
4. McArdle and Roberts agree that the culture of entrepreneurship differs from the larger society in that failure is honored. What evidence do they suggest to illustrate? To what extent do you agree that this subset of our culture is indeed different? What do you make of their example of Steve Jobs?
5. McArdle points admiringly to the U.S. bankruptcy system as the most generous in the world. Why does she regard the system as “a neat little natural experiment,” and what value does she argue it provides?
6. Roberts notes his concern with the notion of expected punishment, as used in Law and Economics. What constitutes expected punishment, and what do Roberts and McArdle think is wrong with this formula?
Perhaps individuals are not alone in being susceptible to failure. In 2011, Roberts interviewed another “fan” of failure, Tim Harford. Harford’s interview focused more on failure at the macro level, though some of the examples he discussed are also present in McArdle’s interview. To what extent is failure recognized in the world of regulatory policy? Which of McArdle’s “lessons” on failure apply equally to institutions and individuals? Should failure be tolerated less in such sectors as nuclear power and warfare? Why?