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The Book Making Us Re-Think The World Of Finance

September 2017Words by Mr Adam Welch

Illustration by Mr Giordano Poloni

Finance is much cooler than you think it is. At least, this is the argument being made by Harvard Business School professor Mr Mihir Desai in his book The Wisdom of Finance, a strikingly involving, strangely life-affirming new tome about – and, yes, it feels odd to say this – the world of insurance, stock options, leverage, mergers and acquisitions.

According to Mr Desai – who spent his early career on Wall Street before making the move into academia with a PhD in political economy at Harvard  – our contemporary understanding of finance often fails to engage with the essentially moral, human concepts that have always informed it. In fact, he says, finance has an awful lot more in common with the kind of ideas we find in the humanities – art, philosophy, literature – than most people would give it credit for. The problem is, he says, that we simply don’t have a good cultural frame of reference for finance. If it’s not greed, excess, hubris and tragedy, we don’t tend to see it.

“I think people organise their lives around stories, and most people in finance have really bad stories,” says Mr Desai. “Stories of Bernie Madoff, or Gordon Gecko, or The Wolf of Wall Street, or Don Dellillo’s Cosmopolis. They’re terrible stories. I mean they’re cautionary stories, of what can go wrong, but they're not stories of what can go right.”