Perhaps the best general history of risk -- and presentation of the major concepts of risk -- that is understandable by all practitioners at any level.
The content is presented in a general historical order in major sections by epoch. The first being from the ancients to 1200, then the middle ages and Renaissance. Finally, then into the industrial revolution, and modern era.
Along the way, Bernstein recounts not only the emerging understanding of risk per se, but also the allied concepts of counting, numbers, chance, and of course, business management.
No math! (Almost no math)
There is not much math or statistics to trip up the qualitative mind! (Yea for that) But, the presentation of the evolution of our understanding of chance introduces many of the main characters and demonstrates their contributions with just enough math/quantitative examples to make it interesting.
Mystical and Divine... pressing on!
Much of this material describes the period 1700 - 1900 when much of the modern underpinnings of chance, probability, and statistics were developed and made understandable to the general business population. We learn, for instance, that it was in this period that the notion of risk in the modern sense emerged from the mystical and divine to the cause-effect concept.
While the parallel developments of mathematics, business practises--like insurance--and a math/cause-effect foundation for risk are presented with a storyteller's gift, I found Bernstein's recounting of the ideas that developed after 1900 to be the most interesting and insightful.
Along comes the psychologists
Of course, the story in this book ends just about the time that the ideas of Amos Trversky and Daniel Kahneman, first developed in the 1970's, are gaining popular acclaim in the 90's. Thus, in this part of the book we get a great explanation of the expansion of utility theory first developed in the 1700's but advanced into Prospect Theory by Tversky and Kahneman.
There is also excellent explanations of various biases and other cognitive maladies that intrude on the rational and objective. We learn a good deal about the failure of invariance--the idea that same manager can be risk averse and risk seeking depending on not only the point of view presented (glass half full/half empty) but also whether there is a sure loss or a sure win at stake.
Someone else likes it
Bernstein's expertise is in the financial world. John Kenneth Galbraith wrote of "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".
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