Against the Gods

I must say I admire people who name their books Against the Gods just like Peter L. Bernstain has done it. And the fact that You put Rembrant's Storm on the Sea of Galilee on it as well, is not bad marketing. As a matter of fact, I think this book has one of the most intriguing titles and covers I’ve seen.

So what about the contents? The book takes a journey that begins with the importation of the Arabic numbering system to the West and ends with modern chaos theory. Bernstein makes surveys of all the intellectual contributions of each great figure of risk as they strive to understand basic probability, the law of large numbers, bell curves, regression analysis, uncertainty theory etc. Basically the first half of the book or maybe tree quarters of it was nothing new to me (except stories about authors), especially having just finished lectures in risk management and statistics last term. But Bernstein also spends the latter quarter of the book on risk and probability theory in the financial world, where theorists have developed portfolio analysis, volatility studies, hedging and side bets and other quantitative market plays, which I wasn’t very familiar with.

Overall, the book was an interesting read, however I must say that risk in nowadays world doesn’t really border only with probability theory in the financial world (although it is a big chunk of the picture). There are other pieces of the puzzle, like technological risks, environmental risks etc, which are all-important to the whole story and maybe shouldn’t be disregarded. But then again, maybe one must draw a line somewhere and bound it only with financial part of the story. If one look's at Bernstein's past, one can easily make that assumption...

And what about game theory? I really enjoyed the Keynes’s vs. Jevon's contradiction in the 14th paragraph- the man who counts everything except calories. I think I’m more of the person who falls into the Keynes paradigm- we simply do not know kind of bounded rationality. But then again, I totally agree with the fact that there is this mysterious power in numbers...