Review of Against the Gods: The Remarkable Story of Risk (Hardcover)

Bernstein has written a thorough book that traces the linear progression of man's understanding of probability and risk.

This is a journey that begins with the importatioin of the arabic numbering system to the West andends with super-computer crunched chaos theory.In between lie the fathers(all men) of mathamatical understanding.These individuals are the storyof AGAINST THE GODS.Bernstein survey's the intellectual contrubutions ofeach as man strives to understood basic probability, the law of largenumbers, bell curves, regression analysis, uncertainty theory andeverything else you dimly remember from college statistics classes.Hespends the latter quarter of the book on risk and probability theory in thefinancial world, where theorists have developed portfolio analysis,volitility studies, hedging and sidebets and otherquantatative marketplays.

Credit to the author for balancing his story against the very highprobability that much of what these thinkers sought may be unattainable. He frequently mentions the humanity that these people try to explain withlaws formulated from observations in the natural world.Although rightlyimpressed with his intellectual frontiersmen, Bernstein has no problemrecognizing that the uncertainty that has always eluded explanation is usand that it helps make life worth living and progress possible.

This bookis interesting for what it is.A story of the development of theories.Iwould have enjoyed more of a focus on the applications of this intellectualprogression that led to the development of insurance and financial markets. Though these elements are mentioned often, they provide the backdrop forBernsteins survey of theory.I suspect another book awaits someone whowill reverse the order and use theory as a backdrop forthe mechanismsthat have allowed the modern economy to flourish and develop.The story ofinsurance, speculation, the beginning of capital markets, a monied economyand the like spring from the intellectual movements so well chronicled byBernstein.However, they are not the focus, which has the habit of makingthe reading dry and sometimes uninteresting to those not captivated by theactual numeric analyses and proofs which are amply offerred over the courseof the book.

If you like intellectual history and are looking to tie thebuilding blocks of probability and risk analysis together over the lastfour centuries than this book may well captivate you.If you are seekingan understanding of how these discoveries were applied to forge the moderneconomy we now take for granted you will find parts interesting but maywell feel that the story is incomplete.



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