I just finished an extraordinary book, ‘Against the Gods: The Remarkable Story of Risk’ by Peter Bernstein.

I had always believed that the story of civilization is a story of human’s conquest of risk, or atleast a reduction in the most banal forms of risk. Unlike cavemen, we don’t worry about being eaten by wild animals. The vagaries of the weather seldom have life-threatening implications for the general populace. Every human activity, in commerce and in every day life is oriented towards minimizing unknown risks and eliminating known risks.

Bernstein’s book serves to teach you the history of how we came to understand risk, measure it and then proceed to try to eliminate it. While we have reduced risk in many natural spheres, we have created more in the process. Humans have learnt to conquer the risks caused by nature (for the most part) but how about the conquest of risks caused by the actions of fellow human beings?

Volatility is a consequence of irrationality (pause to think about this statement).

The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.

– G.K. Chesterton