More than 2,000 volumes telling tales of mismanagement, from the Parable of the Talents through the Great Depression of the 1930s to the 2008 credit crunch, have been collected.
While guests enjoyed a few glasses of wine at the upbeat launch, Lord Lamont of Lerwick made a wry speech suggesting that a wing of the library should be devoted to the euro.
However, the former Conservative chancellor might have also been reflecting on his own role in recent financial history.
As the man who was forced to withdraw sterling from the ERM (exchange rate mechanism), he seemed an appropriate figure to announce the creation of the new resource.
“You might find a little mention of myself in there,” he said, perhaps looking back to Black Wednesday.
Similarly, Edinburgh might be seen as the right place for such an institution, being the base of Fred Goodwin while he presided over the fall from grace of the Royal Bank of Scotland.
That, however, would be to miss the point. The purpose of giving the public access to an unrivalled collection of economic mishaps is to guide people towards the sort of economic performance associated with the more successful side of Edinburgh’s thriving financial sector.
“At the Library of Mistakes we can see the beauty in mistakes,” explained Russell Napier, keeper of the library and a consultant to Asia’s largest stockbroker, CLSA.
“Mistakes can sometimes be serendipitous, but even when they are not, their study still has value as human progress is based upon learning from mistakes.
“The more we know about why smart people do stupid things, the fewer stupid things we might do. The Library of Mistakes provides a resource for the study of such mistakes as we fulfil our motto Mundum mutatu errore singillatim – changing the world one mistake at a time.”
The charitable venture has been established thanks to the generosity of several donors and its contents will be available to those who register as readers.
Mr Napier is himself a keen student of financial mistakes. His acclaimed book The Anatomy of a Bear: Lessons from Wall Street’s Four Great Bottoms was published in 2005. By examining the lessons from Wall Street depressions, he foretold the financial implosion of 2008.
With a congenial reading room at Wemyss Place Mews in the heart of Edinburgh, the Library of Mistakes is building up an unparalleled reference library and online catalogue.
With George Osborne’s most recent Budget giving people the power to cash in their pension funds, Mr Napier is hopeful the Library of Mistakes will guide the public through that minefield. “This is a free resource to the public. The public is making very serious decisions about their personal finances and they are not well-informed,” he said.
Another aim is to move the study of economics away from the dry mathematical models, characterising the “dismal science” in school and university.
Mr Napier added: “I want to stress that the audiences are the professions – that would be bankers and fund managers, students and the public.
“We want to lure students out of the universities and away from writing lots of economic equations and get them down here to study things that have actually happened.”