Peter L. Bernstein - Against the Gods. The Remarkable Story of Risk [1996, 1998][A]

Book Description
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 distant past. Against the Gods chronicles the remarkable intellectual adventure that liberated humanity from oracles and soothsayers by means of the powerful tools of risk management that are available to us today.

Editorial Reviews
Amazon.com Review
With the stock market breaking records almost daily, leaving longtime market analysts shaking their heads and revising their forecasts, a study of the concept of risk seems quite timely. Peter Bernstein has written a comprehensive history of man's efforts to understand risk and probability, beginning with early gamblers in ancient Greece, continuing through the 17th-century French mathematicians Pascal and Fermat and up to modern chaos theory. Along the way he demonstrates that understanding risk underlies everything from game theory to bridge-building to winemaking.

From Publishers Weekly
Risk management, which assumes that future risks can be understood, measured and to some extent predicted, is the focus of this solid, thoroughgoing history. Probability theory, pioneered by 17th-century French mathematicians Blaise Pascal and Pierre de Fermat, has made possible the design of great bridges, electric power utilities and insurance policies. The statistical sampling methods invented by dour Swiss scientist Jacob Bernoulli undergird diverse activities such as the testing of new drugs, stock-picking and wine tasting. Bernstein (Capital Ideas) animates his narrative with a colorful cast of risk-analyzers, including gambling addict Girolamo Cardano, 16th-century Italian physician to the Pope; and John Maynard Keynes, whose concerns over economic uncertainty compelled him to recommend an active, interventionist role for government. Bernstein also traces the development of business forecasting, game theory, insurance and derivatives, and surveys recent advances in risk forecasting made possible through chaos theory and by the development of neural networks.Copyright 1996 Reed Business Information, Inc.

From Library Journal
For several centuries, mathematics has been the language of the exact sciences. Only in the 20th century has mathematics become predominant in other fields, particularly economics and finance. In this book, Bernstein (Capital Ideas: The Improbable Origins of Modern Wall Street, LJ 12/91), head of an economic consulting firm, traces the development of probability theory from its beginnings in analyzing games of chance, through its application to statistical theory and insurance, up to its present use in developing investment strategies to control risk. He includes excellent sections on portfolio analysis and on investments in derivatives. Bernstein clearly describes the people, their work, and the events that have revolutionized the thinking on Wall Street. A worthwhile acquisition for business and math collections.?Harold D. Shane, Baruch Coll., CUNYCopyright 1996 Reed Business Information, Inc.

From Booklist
Bernstein's lively history chronicles a profound transformation in attitudes about the future. How one's fate changed from depending less on capricious outcomes and more on predictable ones forms the backbone of the narrative. His central characters are mathematicians who began pondering the statistics of gambling, or gamblers pondering the risks of gambling: about one sixteenth-century polymath, Girolamo Cardano, Bernstein writes that his "credentials as a gambling addict alone would justify his appearance in the history of risk," and that comment is typical of Bernstein's engaging presentation. Amid his recounting of the insights into probability from Pascal to Keynes, he touches on an array of modern fields in which risk analysis is crucial--insurance, commodities futures, stock markets, and that old standard, gambling. This cornucopia of biographical sketches, mathematical examples, and reflections on the nature of human expectations about the future faces little risk of idling in libraries; patrons of the business section might be keenest to read it. Gilbert Taylor

Reviews
"...provides an excellent history about risk and it's vital role in markets." (Wall Street Journal, August 7, 2006)

“…an excellent book on what can be a dry subject…” (Financial World, 1st December 2005)

"A comprehensive history of man's efforts to understand risk and probability, from ancient gamblers in Greece to modern chaos theory." (The Washington Post Book World, September 20, 1998)

"I must say that I enjoyed the book, it was written in a light-hearted manner". (Money Matters, April 2001)

No. 7 bestseller in 'Risk' (erivativesreview.com, December 2001)

From the Publisher
To what degree should we rely on our past to determine our future? This riveting book describes how the rational process of risk taking propelled the progress of science and enterprise into the modern world of speed, power, instant communication, and sophisticated finance. Risk management is now an indispensable skill whose applications range from allocating wealth through planning a family to wearing a seatbelt. Drawing upon history and biography to trace the development of its concepts, the author explains the origin of risk management--the basics of probability, sampling, regression to the mean, game theory, and rational versus irrational decision making. Bernstein introduces complex concepts via an accessible, entertaining narrative between the great minds behind the ideas. Against the Gods features the epic quests and questions of great thinkers such as Pascal, Fermat and von Neumann who have embarked on a reworkable adventure of intellectual discovery, proving that the future is more than just the whim of the gods, that men and women are not passive before nature.

From the Back Cover
A Business Week, New York Times Business, and USA Today Bestseller

"Ambitious and readable . . . an engaging introduction to the oddsmakers, whom Bernstein regards as true humanists helping to release mankind from the choke holds of superstition and fatalism."
—The New York Times

"An extraordinarily entertaining and informative book."
—The Wall Street Journal

"A lively panoramic book . . . Against the Gods sets up an ambitious premise and then delivers on it."
—Business Week

"Deserves to be, and surely will be, widely read."
—The Economist

"[A] challenging book, one that may change forever the way people think about the world."
—Worth

"No one else could have written a book of such central importance with so much charm and excitement."
—Robert Heilbroner author, The Worldly Philosophers

"With his wonderful knowledge of the history and current manifestations of risk, Peter Bernstein brings us Against the Gods. Nothing like it will come out of the financial world this year or ever. I speak carefully: no one should miss it."
—John Kenneth Galbraith Professor of Economics Emeritus, Harvard University

"An extremely readable history of risk."—Barron's

"Fascinating . . . this challenging volume will help you understand the uncertainties that every investor must face." —Money

"A singular achievement." —Times Literary Supplement

"There's a growing market for savants who can render the recondite intelligibly—witness Stephen Jay Gould (natural history), Oliver Sacks (disease), Richard Dawkins (heredity), James Gleick (physics), Paul Krugman (economics)—and Bernstein would mingle well in their company." —The Australian

About the Author
PETER L. BERNSTEIN is President of Peter L. Bernstein, Inc., economic consultants to institutional advisors and corporations. His semimonthly analysis of the capital markets and the real economy, Economics and Portfolio Strategy, is read by managers and owners of investments totaling over one trillion dollars. Mr. Bernstein is the author of many articles in the professional and popular press, as well as six books in economics and finance, including the bestselling Capital Ideas: The Improbable Origins of Modern Wall Street. He is the coeditor of Investment Management (Wiley), and was the first editor of The Journal of Portfolio Management.