Mihir Desai, Mizuho Financial Group professor of finance at Harvard Business School, was born in Mumbai, soon moved to Hong Kong but grew up, from the age of eight, in Madison, New Jersey. He believes that he “benefited enormously from these moves, as they provided for a great education, a solid American identity and a deep appreciation for what the rest of the world offers”.
For his first degree at Brown University, Desai majored in history, “a great discipline for learning how to write and for engendering a more subtle sense of causality”. He has always, he says, been “a voracious consumer of high and low culture. I grew up feasting on books, television and movies equally, and that pattern continued until I became a professor…As an economist, you are trained to distrust stories, but writing The Wisdom of Finance made me realise again how we create meaning out of narratives.”
With a PhD in political economy, Desai says he is “fully indoctrinated” in abstract mathematical models and produces work “built on neoclassical theory and various quantitative empirical methods. The book is not a reaction against that tradition but a complement to it. The rigour and formalised methods of economics and finance are not opposed to our humanity but actually related to it.”
Yet today, in Desai’s view, “much of finance has become about value extraction rather than value creation. The book attempts to use the humanities to demystify finance for outsiders and to humanise finance for practitioners. The discipline is reinventing itself, but I think in unfortunate ways. We have become far too enamoured of the latest behavioural bias that psychology purports to have found and randomised trials and alltoo-subtle econometric methods. In the process, we’re losing the intellectual coherence of the discipline and the ability to address the really large and pressing problems of the world.”