The Wisdom of Finance: Discovering Humanity in the World of Risk and Return

"This is a slightly quirky book, which I really enjoyed reading. It’s about getting over some messages about financial markets using stories. The idea of storytelling and economics is gaining ground. Robert Shiller , the Nobel Prize winner, is doing a book now about narratives. I think this is partly because economists have come to realise, in the past few years, that the way we talk to people analytically doesn’t resonate with many of them. Almost all economists said Brexit was going to be really bad for the economy and that message didn’t get through at all. It didn’t speak to people. So, for a number of reasons, I think this idea of narrative has become more salient. This is just a very nice book that uses different kinds of stories to make points to students. It started as a lecture course—a single lecture even—just to make some points to students about how the financial markets operate and how people who work in them ought to behave. So it’s a somewhat moralistic book as well—about doing good finance and not bad finance. It’s just an incredibly, incredibly enjoyable read. Again, finance isn’t my area so I couldn’t comment with expertise on how good he is at financial economics, but I really enjoyed reading the book. That really bugs me. I put a lot of effort into trying to communicate clearly about economics in ways that will speak to people. But just like it’s okay to say ‘I’m no good at maths’ it seems to be okay to say, ‘I don’t understand finance.’ But it shouldn’t be okay. It’s bad enough when it’s the general public and it matters to them personally. It’s even worse when it’s other social scientists. Remarkably few sociologists or anthropologists have looked at financial markets. I can think of a few books, but there haven’t been all that many. These really basic explanations are incredibly important to people. I do think this is a very good book for that. It’s up there with the John Lanchester book a few years ago, Whoops!, which I thought was another great, complete introduction to what had happened in the financial crisis. Definitely this one. The Andrew Lo one does assume much more knowledge about financial markets."