13 of 13 people found the following review helpful
1.0 out of 5 stars
Woeful! But a good insight into the mentality of pre-crash neoliberal economists, 21 Nov. 2013
You might think from the title that you are getting a sweeping story of risk from ancient games of dice through renaissance ideas of probability through to modern ideas of risk management in all areas of life, and the opening chapters also give that impression.
You get good little potted histories of several mathematicians at the start, and you tend to forgive his naive attempts to explain away historical attitudes to risk even though he seems to be embarking on a historical journey.
Then he starts getting onto the real mathematics. Bernstein is clearly one of those people who think "it's better that I'm not an expert in this as it will make me more able to explain it to a lay audience". Peter, Peter, Peter... you can't explain something if you don't understand it. Bernstein is all at sea from the moment he references the earliest and simplest writings on probability and risk, but when it comes to more subtle stuff he is terrible. For example, he is happy to go on and on about the normal distribution when he clearly does not understand what produces a normal distribution and when and where it is applicable, and then later he goes on at even greater length about regression to the mean, which he fundamentally does not understand either.
This book contains numerous boring digressions including his own tedious and naive numerical experiment, some of his irrelevant experiences in investing, and a foggily-understood political hobby horse.
Eventually you slog through to what this book is really about. He believed that risk had been banished from the stock markets. He has a good few examples that demonstrate palpably that this is not the case, and yet he fails to come to his own conclusion; no - risk is dead. Long live everlasting prosperity!
So then you understand what the earlier part is about. Little potted histories of great men of mathematics and science, poorly argued historical arguments, dimly understood mathematics, the silent dropping from the story of risk management in the areas of medicine, social policy, foreign policy, business and everything else that isn't finance; it's all an attempt to lend the weight of history to this (with hindsight clearly bizarre) conclusion.
And so now we know the truth! This book (apparently Bill Clinton was a fan) and the sort of thinking it contains is part of the cocksure mindset of neoliberal economists who drove the western world to and then off a financial cliff.
So read it if you want an insight into that mentality. Avoid if you actually want to know anything about risk.