The Wisdom of Finance: Discovering Humanity in the World of Risk and Return
May 30, 2017
Harvard Business School professor Mihir Desai reminds us that finance can and should reflect the best of humanity, and our core values.
The Wisdom of Finance: Discovering Humanity in the World of Risk and Return (Houghton Mifflin Harcourt), by renowned economist and beloved Harvard Business School professor Mihir Desai, has been attracting some very nice media coverage, including Forbes, and The Boston Globe, Harvard Magazine, and Bloomberg.
Born out of his popular “last lecture” to the graduating Harvard MBA class of 2015, The Wisdom of Finance takes up the cause of restoring humanity to finance, an industry whose reputation has been bruised and battered from the greed and gluttony of the' 80s/'90s and the corruption of the '00s. Desai's position—that finance is inherently moral and deeply rooted in our very humanity—directly and boldly challenges the widely-held attitude of finance as inherently unethical and an industry rife with greed and corruption.
He draws on a rich knowledge of literature, film, history, and philosophy to show how some of the most fundamental teachings of philosophy, psychology, and religion are embedded in markets, finance, and business, and to work in finance is to live and to breathe some of the most core moral principles.
Among the many parallels and examples he considers:
- Jane Austen’s Lizzie Bennet as risk manager
- The Wire on diversification
- Working Girl, and the lyrics of Kanye West and Ray Charles, on the connection of mergers and marriages
- Jeff Koons vs George Orwell on leverage
- Saul Bellow and Herman Melville on options
- Mel Brooks as a guide to corporate governance
He also uses these cultural touchstones to distill the basic tenants of finance for readers outside the industry and also shows how those principles can help us navigate life’s problems. For example:
- Insurance can help us make sense of and confront the disorder of the world
- Bankruptcy can help us react to failure theories of leverage can teach us about the value of commitments
- The Capital Asset Pricing Model can allow us to realize the value of relationships and the nature of unconditional love
Already embraced by CEOs and academics alike (see praise below) The Wisdom of Finance offers a refreshing new perspective on one of the world’s most complex and misunderstood professions.
ABOUT THE AUTHOR
Mihir A. Desai was born in India and raised in Hong Kong and New Jersey. As a professor and award-winning teacher at Harvard Business School and Harvard Law School, Desai teaches finance, tax law, entrepreneurship and has recently developed an online finance course for the HBX platform. His scholarship on corporate finance, international finance and tax policy has prompted several invitations to testify before the U.S. Congress and serves as the basis of his advisory role to leading global companies and organizations.