The Necessity of Finance

A basic text about financial concepts that strives to elevate finance to the status of a science.

Ever since the 2008 recession, the financial world has achieved prominence, if not notoriety. Many casual observers have become more aware of the general financial health of the country, but they may be largely ignorant of relevant financial concepts. Criniti, a professor of finance, investor and former financial consultant, offers a primer written with uncluttered clarity which explains in simple language the difference between finance and economics. He also defines terms such as “financial manager,” “financier,” “financial statements,” “financial planning,” and “risk and return.” For example, investing, writes Criniti, “is the act of currently owning any asset, tangible or intangible, that is not associated with playing any perceived ongoing game of chance and is intended to maximize wealth based on acceptable levels of time and risk.” The author also addresses aspects of finance that other authors tend to overlook; for instance, Criniti points to “a high correlation between finance and health.” Referring to America’s health insurance challenge, he writes that “under the current American healthcare system, the wealthier you are the healthier you could be.” In another chapter, “Finance and the Environment,” Criniti postulates that “[e]nvironmental goals can only be accomplished when more wealth is directed toward them.” Throughout the book, Criniti lobbies for finance to be accepted as a full-fledged science, separate and apart from economics. He even wonders, “Where is the real Nobel Prize in finance? It doesn’t exist unless you call it financial economics.”

A well-crafted work for general readers that could serve as a basic textbook on the fundamentals of finance.