The recent New York Times article “Insurance 101: Butler Undergrads Write Coverage for Dogs and Pianos,” about Butler University’s student-run insurance company, brings to mind the 2017 book The Wisdom of Finance: Discovering Humanity in the World of Risk and Return, by Mihir A. Desai, an economist and professor at both Harvard Business School and Harvard Law School.

Desai’s book is worthy of all the considerable praise it has received, including various best of the year lists, and being long-listed for the coveted Financial Times and McKinsey Best Business Book of the year. He devotes considerable space to insurance, delivered in a style representative of the entire book: thoughtful, subtle and representing more than one point of view on the subjects he covers. “Most of my students,” he writes, “flock to finance—but often for the wrong reasons…I am delighted and surprised when a student walks into my office interested in venturing down the path less taken—finance within corporations in the real economy, or, even better, insurance.”

Desai indeed humanizes finance throughout, and readers within that discipline, and outside of it will benefit from reading the book, which is relatively brief (223 pages), but packed with interesting material. A major point is that finance is not just about numbers, goals and deals, but about the human creativity, thoughts, emotions and motivations behind what we see in the headlines; or numbers in stock tables. He believes that the demonization so many people feel for the financial sector is unwarranted and unhelpful. Both sides need to understand each other better, and people in finance should be seen as doing worthy and necessary work. He reflects on his own experience teaching these subjects, and his professional life as a whole.

The mechanism here is explaining financial concepts through the lens of art and literature. Desai remains an engaging personality; eloquent and user-friendly, yet not dumbing down his material. He is a terrific storyteller, and strives to not just give easy explanations of business-related stories, but to make them nuanced and worthy of balanced thought from the reader. Here is a brief sample of some of the topics, and a few of the people and works of art he draws on for explanations:

Insurance: author Dashiell Hammett; philosopher/mathematician Charles Sanders Peirce; poet (and insurance executive) Wallace Stevens.

Risk: authors Jane Austen and Anthony Trollope; the 6th century BCE Greek philosopher Thales of Miletus

Asset Pricing: the Biblical Parable of the Talents; poet John Milton

The Principal-Agent Problem: Mel Brooks’ play The Producers; novelist E.M. Forster

Mergers and Acquisitions: A journey to “the center of the Renaissance, fifteenth-century Florence.”

Debt: Shakespeare; the contemporary artist Jeff Koons

Impressions of Finance: Authors James Joyce, Theodore Dreiser, and Willa Cather.

The Wisdom of Finance has inspired interesting coverage in the press, including:

Bloomberg: “When Finance Is a Character in a Novel”

Financial Times/Gillian Tett: “‘The Wisdom of Finance,’ by Mihir Desai”

Forbes/Steve Denning: “Why Wall Street Went Astray: Eight Ways To Humanize Finance”

The Globe and Mail: “Understanding finance in the context of art, history and humanity”

Times Higher Education: “Book of the week: Great writing can enlighten and encourage dialogue between disciplines”

For further amplification, there are a number of Desai’s own articles/interviews available online, including:

The Atlantic: “Capitalism the Apple Way vs. Capitalism the Google Way: Whichever company’s vision wins out will shape the future of the economy.”

Harvard Business Review: “Finance Can Be a Noble Profession (Yes, Really)”

Harvard Business School Working Knowledge interview: “What Jane Austen and Mel Brooks Can Teach Us About Finance”

The Harvard Crimson: “The Trouble With Optionality”

NPR/All Things Considered Q&A: “Latest College Graduates Enter A More Optimistic Economy”

Desai concludes with a detailed and extensive section of the resources he drew on, both online and in print. In the spirit of his book, I’d like to offer my own humble, brief poem:

Mihir A. Desai.
I’d definitely take a course from this guy.

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