Against the Gods: The Remarkable Story of Risk

by Peter L. Bernstein

The word “risk” derives from the early Italian risicare, which means “to dare.” In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about. And that story helps define what it means to be a human being.

The unique quality of the Greek spirit was the insistence on proof. “Why?” mattered more to them than “What?” The Greeks were able to reframe the ultimate questions because theirs was the first civilization in history to be free of the intellectual straitjacket imposed by an all-powerful priesthood.

Why, given their advanced mathematical ideas, did the Arabs not proceed to probability theory and risk management? The answer, I believe, has to do with their view of life. Who determines our future: the fates, the gods, or ourselves? The idea of risk management emerges only when people believe that they are to some degree free agents. Like the Greeks and the early Christians, the fatalistic Muslims were not yet ready to take the leap.

The “Venus” throw, a play in which each of the four faces—1, 3, 4, 6—appear, earned the most, although equally probable throws of 6, 6, 6, 6 or 1, 1, 1, 1 earned less.5

it should be less probable to get all 6 or all 1. and should pay more