Why upside down? Because that's how your eyes actually perceive the world (before your brain crunches the data, anyway). That's due to the process of refraction through a convex lens—that is, the bending of light through a surface that bows outward in the middle, like your eye or a camera lens. In the 17th century, French philosopher and scientist René Descartes proved this by replacing the retina of a dead cow's eye with a screen. The screen showed a flipped version of the scene in front of the eye.
When a baby is first born, there's all sorts of crazy stuff going on: its lungs wake up and let out a cry (but no actual tears, since baby tear ducts aren't fully formed), it's often covered in fur (called lanugo, which keeps the fetus warm in the womb), and it might even be seeing upside-down.
Which Way Is Up?
All In Your Head
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5 Amazing Facts About Babies
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Key Facts In This Video
Milk produced by mothers shortly after birth is low in fat, saturated with antibodies and is high in protein. 00:39
Babies are born with approximately 270 bones. 01:33
A baby's "soft spot" on the head is known as the fontanelle. 01:55