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McArdle’s Guide to Failing Well

Failure terrifies Americans into fragility, quite unnecessarily.

In The Up Side of Down: Why Failing Well Is the Key to Success, Megan McArdle, a columnist with Bloomberg View, makes a compelling case that America has failed to find a way to cope with setbacks and upheavals. McArdle draws on business case studies, academic research, and, for perspective, anecdotes from her own life to identify the individual and institutional barriers to bouncing back.

She looks at high school students terrified of taking challenging classes, for fear that a B will scupper their chances at college, the inertia and fear that lead GM to delay their inevitable restructuring, and her own tumultuous attempts to restart a relationship with an old flame rather than admit defeat. In each of these cases, a bad relationship with failure has enormous costs, even before the failure has occurred. If failure is always catastrophic, we’ll try to protect ourselves by taking minimal risk and innovating as little as possible.

But, in Hawaii, she finds a failure success story in the Hawaii’s Opportunity Probation with Enforcement (HOPE) program. HOPE is a parole program that deals out small punishments reliably for every violation of parole. Most parole systems let minor infractions slide—due to negligence or overwork—until there’s a truly egregious problem, and the parolee is sent back to jail, sometimes for years.

The HOPE program gave former prisoners consequences to learn from, but made sure that a parolee could still recover from the initial penalties meted out. The reliability of the system helped parolees confidently anticipate the consequences of their choices. Prisoners randomly assigned to the HOPE program were three times less likely to have their probation revoked as those in the regular program. Jail time and drug use plunged as well; and, although increased oversight was more expensive, the state made the money back by not having to pay the costs of incarcerating these parolees.

But these reforms haven’t caught on in other states. McArdle hypothesizes that these parole reforms remain counterintuitive because of two cognitive biases: an overactive Agent Detection system and the the Just World hypothesis. Agent Detection refers to humans capacity to recognize other agents—creatures that are capable of having goals and pursuing them. It helps us distinguish the results of blind chance or impassive processes like the weather from actions that are the results of other humans’ choices. Pair that with the Just World theory, where most things happen according to some kind of fair plan, and it’s easy to see every instance of failure as the exposure of a secret fault in a rational actor, rather than the result of chance.

It’s easy for courts outside Hawaii to assume that the criminals in their jails must be choosing recidivism, and soft nudges won’t be enough to get them back on track. Humans also have a tendency to rationalize punishment as justice—if the penalty is harsh, the prisoner must be really awful. As Eve Tushnet pointed out in her analysis of the Mississippi woman prosecuted for having a stillbirth, we even have a tendency to hope that the misfortune of others is due to some intrinsic flaw, so that we can pretend we’re exempt from bad luck.

Our society needs better social scripts for failure, since we have more power to react to upheavals than to prevent them. As McArdle narrates, institutions and individuals are blinded by biases and bad heuristics, and wind up perpetuating a throw-away culture. We struggle to prevent problems from turning into catastrophes, and we’re reluctant to sift through the wreckage to see what can be mended. And, as McArdle is willing to admit, often the very person floundering will be prone to write themselves off as unsalvageable.

McArdle’s book should be read in tandem with Nassim Nicholas Taleb’s Antifragile: Things that Gain from Disorder. While McArdle’s book sometimes seems to be cheering up the readers and encouraging them to make the best of a bad lot, Taleb manages to make preparing for failure feel like heroism in its own right, not a reaction to defeat.

Taleb uses his romantic (verging on purple) prose to highlight examples of antifragility—systems or people who don’t just minimize the harm that chaos causes, but actively benefit from perturbations. The A/B testing programs used by major technology firms and the Obama fundraising team helps users benefit from making mistakes. These programs fail fast and often on a small scale, so companies can beta test and refine their approach. Antifragility can be built in at the level of persons, communities, or nations, if people are willing to focus on something more than minimizing danger or risk.

McArdle’s book offers a primer in these habits and techniques, so that people who have suffered losses have a chance to bounce back, and those who are currently stable can better plan for the future. The book is useful for individuals but her work deserves to be read by educators, church leaders, and government officials, so they can audit their traditions and institutions to see if they’re limiting the resilience of the people they serve.