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. (Reviewed Sept. 15, 1996)

A history of probability from an economist and author of a history of Wall Street (Capital Ideas, 1991). Modern risk theory dates from a little geometric model invented in 1654 called Pascal's Triangle, which Blaise Pascal used to address a perennial intellectual question: If two participants quit a game of chance before finishing, how is the pot divided? Pascal's Triangle answered the question by showing the proportions of probable outcomes at any given stage of a game. Games dominated theories of risk for a long while, until the English began analyzing death records, resulting in the first actuarial tables, and the Dutch did the same with the successes and failures of merchant shipping. The bell curve and the concept of standard deviations arrived, after much tedious experimentation, in the 19th century—and are very much with us still, in political polling, for instance, and in the analysis of stocks. These classical concepts retain their value, but the irrational, catastrophic events of the 20th century led economists such as John Maynard Keynes to discard the past as a reliable gauge for the future and embrace uncertainty as the only real operating principle. Chaos theorists are presently engaged in an attempt to computerize the minutiae of reality, arguing the need for ongoing, ever-changing models of the future, and rejecting the mean of the bell curve, because the mean changes even as it is identified. There is no norm, in other words, but Bernstein argues that this is cause for hope, rather than despair. He concurs with Keynes that probabilities exist; we simply do not know enough to find them. Therefore, an informed decision matters all the more: A calculated risk is superior to a fool's wager. A dense but compelling model of how the world works."