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Harvey Schachter.Wayne Hiebert/The Globe and Mail

To understand finance, a good place to start might be the writings of Jane Austen or Dashiell Hammett.

That's the seemingly odd path Harvard Business School professor Mihir Desai takes in The Wisdom of Finance, as he aims to improve financial practice by rediscovering the humanity of its core ideas.

By linking to literature, history and philosophy, he tries to build deeper resonance. It is a daring, intriguing work, offbeat and fascinating, something both practitioners of finance and the general public can learn from. Prof. Desai draws on diverse sources such as the film The Producers, Shakespeare, Samuel Johnson, George Orwell and Willa Cather.

For example, Pride and Prejudice, published in 1813, is a novel that in some ways becomes a treatise on handling risk. Author Jane Austen presents the dilemma faced by Elizabeth Bennet. In those days, young women had to rely on the marriage market for financial security. Accordingly, when Ms. Bennet rejects a proposal from William Collins, he warns: "You should take into further consideration that in spite of your manifold attractions, it is by no means certain that another offer of marriage may ever be made you."

In The Maltese Falcon, a 1929 detective novel, author Dashiell Hammett inserts the story of Flitcraft, a successful real estate executive in Tacoma, Wash. A steel beam falls eight storeys on a construction site and nearly wipes him out. Realizing life could be ended at random, he decides to flee his wife and family. Prof. Desai says the parable illustrates the dominance of chance in our life, as well as how we can't easily escape our own patterns of behaviour. After changing his name to Charles Pierce, Flitcraft winds up living an essentially identical life in a new locale.

The name of the character Flitcraft was borrowed from a legendary Pinkerton investigator who worked for insurance companies. And the real Charles Peirce (Hammett spelled the name differently in the novel) was a famed scientist/mathematician/philosopher who repeatedly turned his thoughts to insurance as a central frame for understanding life. "Each of us is an insurance company," he wrote in Grounds of Validity of the Laws of Logic, published in 1869.

Together, Hammett and Austen highlight risk and the ideas of probabilities – things we shy away from but need to understand.

Prof. Desai notes that chance is omnipresent but can be understood and analyzed rigorously. Since it's predictable in the aggregate, we can deal with it. He writes: "The tools needed to navigate a world filled with uncertainty is what finance endeavours to provide. Risk is everywhere, it is undeniable, and it shouldn't be ignored or surrendered to – it should be managed. And insurance is the primary way we manage the risks in our lives."

As for the risk management encountered by Ms. Bennet in selecting a husband, he says it symbolizes the tradeoffs we face in other aspects of our lives. Should you keep looking for the perfect job or accept the lesser offer on the table? Is continuing with further education worth the costs?

"These questions implicitly consider risk and return and require you to think about how to allocate your time, energy, and resources given a set of choices in the face of an uncertain future. This allocation problem is precisely the problem at the center of finance," he writes.

The term "high finance" implies it's higher than us: Complicated, confusing, numbers-oriented – stuff for business-school graduates to pursue on Bay Street. Prof. Desai argues it's about our own lives – risk and insurance, debt, leverage and failure.

Just as importantly, he feels practitioners of finance need to explain and justify what they do more clearly to win back confidence. "More than regulation or outrage, fixing finance requires practitioners to return to the core ideas and ideals of finance – which can help them to ensure they are creating value and not extracting it," he says.