Against The Gods

In this unique exploration of the role of risk in our society, Peter Bernstein argues that the notion of bringing risk under control is one of the central ideas that distinguishes modern times from the more distant past. Against the Gods, a narrative that reads like a novel, chronicles the remarkable intellectual adventure that liberated humanity from the oracles and soothsayers by means of the powerful tools of risk management that are available to us today. This is a richly-woven tale of Greek philosophers and Arab mathematicians, of merchants and scientists, gamblers and philosophers, world-renowned intellects and obscure but inspired amateurs who helped discover the modern methods of putting the future at the service of the present, replacing helplessness before the fates with choice and decision.

When investors buy stocks, surgeons perform operations, engineers design bridges, entrepreneurs launch new businesses, astronauts explore the heavens, and politicians run for office, risk is their inescapable partner. Yet their actions reveal that risk today need not be feared: managing risk has become synonymous with challenge and opportunity.

Bernstein presents fascinating vignettes of such towering intellects as Omar Khayyam, Pascal and Bernoulli, Bayes and Keynes, Markowitz and Arrow, and Gauss, Galton and von Neumann. With his engaging literary style, he clarifies the concepts of probability, sampling, regression to the mean, game theory, and rational versus irrational decision making. The final sections of the book raise important questions about the role of the computer, the relationship between facts and subjective beliefs, the impact of chaos theory, the role of the burgeoning markets for derivatives, and the looming dominance of numbers.

Against the Gods: The Remarkable Story of Risk is that rare book that turns the most profound issues of our time into pure reading pleasure.

• To 1200: Beginnings
1. The Winds of the Greeks and the Role of the Dice
2. As Easy as I, II, III
• 1200–1700: A Thousand Outstanding Facts
3. The Renaissance Gambler
4. The French Connection
5. The Remarkable Notions of the Remarkable Notions Man
• 1700–1900: Measurement Unlimited
6. Considering the Nature of Man
7. The Search for Moral Certainty
8. The Supreme Law of Unreason
9. The Man with the Sprained Brain
10. Peapods and Perils
11. The Fabric of Felicity
• 1900–1960: Clouds of Vagueness and the Demand for Precision
12. The Measure of Our Ignorance
13. The Radically Distinct Notion
14. The Man Who Counted Everything Except Calories
15. The Strange Case of the Anonymous Stockbroker
• Degrees of Belief: Exploring Uncertainty
16. The Failure of Invariance
17. The Theory Police
18. The Fantastic System of Side Bets
19. Awaiting the Wildness

Everything you ever wanted to know about risk and its history. A personal favorite.