Against the Gods: The Remarkable Story of Risk

Chapter 2

As Easy as I, II, III

Without numbers, there are no odds and no probabilities; without odds and probabilities, the only way to deal with risk is to appeal to the gods and the fates. Without numbers, risk is wholly a matter of gut.

We live in a world of numbers and calculations, from the clock we squint at when we wake up, to the television channel we switch off at bedtime. As the day proceeds, we count the measures of coffee we put into the coffeemaker, pay the housekeeper, consult yesterday’s stock prices, dial a friend’s telephone number, check the amount of gas in the car and the speed on the speedometer, press the elevator button in our office building, and open the office door with our number on it. And the day has hardly started!

It is hard for us to imagine a time without numbers. Yet if we were able to spirit a well-educated man from the year 1000 to the present, he probably would not recognize the number zero and would surely flunk third-grade arithmetic; few people from the year 1500 would fare much better.

The story of numbers in the West begins in 1202, when the cathedral of Chartres was nearing completion and King John was finishing his third year on the throne of England. In that year, a book titled Liber Abaci, or Book of the Abacus, appeared in Italy. The fifteen chapters of the book were entirely handwritten; almost three hundred years would pass before ...