By Mihir Desai
The finance industry is widely thought of as being morally suspect. Even those who work in finance tend to compartmentalize between their personal lives and how they get ahead professionally. Mihir Desai argues in The Wisdom of Finance that not only is this preconception completely false, but it’s detrimental to those who work in finance as well as the industry itself.
In this provocative work, Desai deftly sets out his unexpected thesis: there is actually a deep connection between finance and morality. At its root, these two worlds are both animated by the same question: How do we pursue and create value? Through the use of entertaining case studies, Desai shows how finance professionals can find a way to see their work as uplifting rather than dispiriting. Readers will rethink the way everyday business is done to reflect the core moral principles on which the financial field is truly based.
This game‐changing philosophy—part call to action and part prescriptive advice—urges those just entering the field as well those already enmeshed in the profession to entirely rethink their work in a way that will change their personal and professional lives for the better.
Oliver Wiseman on CapX ("For Popular Capitalism") wrote:
"The Wisdom of Finance offers a thoughtful explanation of how money works that recognises how perverted the industry can be, but which also argues that 'there is great value — and there are great values — in finance'. Desai does this by using a clever and unusual device: literature. [...] the wider philosophical point is, Desai argues, that one of the great failings of our modern world is a 'chasm' between the arts and science, and between finance and humanities. This prevents financiers from understanding the social context in which they operate. It also means that non-financiers do not understand how finance drives our world, or the fact that money encapsulates and crystallises social patterns and values. [...] This is a charming, provocative and readable book. For non-financiers, it can be a great teaching tool; for financiers, it is a badly needed rap on the knuckles, and perhaps an inspiration."
"Desai casts a wide net. The result is a lively book full of surprising references. The Wire’s Stringer Bell and Pride and Prejudice’s Lizzy Bennett are your guides to mitigating risk. The accidental success of Springtime for Hitler in The Producers explains the principle-agent problem. An episode of The Simpsons demonstrates how insurance can create moral hazard. But it is when Desai uses finance as a window on life – rather than the inverse – that he writes with the most insight. [...] I asked Desai what he thinks the most common misconception people have about finance. His answer is blunt: 'I think they think it is evil.' [...] Paradoxically, after eight chapters about 'how great finance is', Desai ends The Wisdom of Finance with a chapter on what has gone wrong with it."
Short Video on The Wisdom of Finance
Or watch this longer lecture (58 minutes) lecture by the author on the book
About Mihir Desai
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.
Table of Contents
- Introduction: Finance and the Good Life
- Chapter 1 - The Wheel of Fortune
- Chapter 2 - Risky Business
- Chapter 3 - On Value
- Chapter 4 - Becoming a Producer
- Chapter 5 - No Romance without Finance
- Chapter 6 - Living the Dream
- Chapter 7 - Failing Forward
- Chapter 8 - Why Everybody Hates Finance