2024 APRIL ISSUE
LIBRARY OF
MISTAKES
Written by Andrew Sia
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From the Desk of the Publisher
I came across this purely by chance. Then I went on the website and discovered more. After entering into deep thoughts, I came up with the following conclusions that I have made.
– Even if we know how the mistakes were made, we would still unable to avoid them.
– There won’t be a total solution for everything because it will never be a perfect world.
– We are human unfortunately. It is part of our natures.
I also came up with an idea that in every library, a special section can be dedicated for those so called “mistakes”, and we should welcome reports and papers to be dedicated from the professionals and specialists. It will be an area where people can sit down and flip over the papers and learn from the contents.
I can point out to several areas, such as the industrial disasters, rescue work for any calamity, airplane crashes, and like I said this can continue on and on.
The library should sit together with the institutions and put those documents that they have done the research, and even can take out those thesis, and if we don’t put them to practice they would remain in the archives collecting dust. We have to put knowledge to work.
On January 16, we came across the Bible study with the title “Learn from Mistakes” and it brought out a library set up in Edinburgh, Scotland where they have 2,000 books all related to the times between 1929 to 2008 when the global economy fell into recessions due to some bad economic decisions. The library was meant for helping and educating the next generation of economists . It is also meant to learn from past mistakes and not repeat them.
The story started in 1772, when Douglas Heron & Co, more known as the Ayr Bank named after the town where its head office was located, went busted. It was formed only three years earlier, backed by some largest landowners in Britain, and used this seemingly solid foundation to expand rapidly. Using a mixture of discounted bills and cash borrowed from the London money markets, it quickly became one of the largest banks in the country. Its sudden collapse bankrupted dozens of its shareholders and cast a black cloud over the Scottish economy for decades.
Decades later the Western Bank of Scotland which took on the industrial boom in Glasgow and expanded its lending aggressively. Again, using paper and borrowed money, it was caught by a downturn in the market and because of its poor lending, it was gobbled by bad debts and bankrupted many of its shareholders. The year was 1857.
In 1878, the City of Glasgow Bank who had grown faster than its rivals, suddenly failed and triggered a chain of bankruptcies among its shareholders and creditors.
In 2008, Royal Bank of Scotland and Halifax Bank of Scotland went belly up.
It is said that if the regulators or the boards and executives could have learned from these failures, the subprime crisis of 2008 could have been avoided on both sides of the Atlantic Ocean.
The Library of Mistakes was opened in March 2014, established in the wake of the 2008 financial crisis. It is used to promote the study of the financial markets and to improve financial understanding of banking mistakes. The library serves as a repository of knowledge about financial crises, market bubbles, regulatory failures, and other errors in the realms of economics and finance.
The library provides a valuable resources from researchers, policymakers, and practitioners to learn from past mistakes in the field of finance and economics. In the library you can find a collections of books, journals, reports and other materials related to economic and financial history with a focus on understanding the causes and consequences of past errors.
It also organize events, seminars and workshops to facilitate discussions and debates on topics related to financial and economic mistakes. It promotes critical thinking, risk awareness, and responsible decision-making in the fields of finance, all for reference and dedicated to the prevention of future mistakes.
You can visit their website: www.libraryofmistakes.com for more information.
Today in our schools the textbooks on financial matters are all based on economic theory and the efficient markets hypothesis. There is no practical experience taken from any historical examples. It is important to study history now.
In the finance market, there are few new things other than innovation products in the market. The same patterns of causes and effects for any financial mistakes have repeated time after time. There is a saying from an American author James Grant: “Progress is cumulative in science and engineering, but cyclical in finance.”
I feel that if we can put together those papers that have reflected our past mistakes and apply the artificial intelligence, this can help us further in our critical thinking. This will be extremely helpful to the world as we are facing an aging population problem. All those investment funds need regulatory control to ensure adequate funds to support our older generations.
In our life we have come across many libraries, but this Library of Mistake has made the strongest impression on us. We must make sure that we have learned these mistakes so we will not make them again.
I also think that the “mistakes” shouldn’t be only limited to financial and economic mistakes. We can expand our thinking to the mistakes we have made that have caused the battles and wars, human relationship, and I can go on and on. We can use artificial intelligence to help us and to transform our world into a better and kinder world. Amen!