The Barnes & Noble ReviewWhat is it that distinguishes the thousands of years of history from what we think of as modern times? This is the question Peter L. Bernstein asks in the beginning of his new book, Against the Gods, and the answer put simply is...risk management.Risk management? Well, that's not very poetic, is it? But as Bernstein points out, risk is essential to the development of our society; this is as true as the maxim 'nothing ventured, nothing gained' is old. But how did we discover the proper method for calculating insurance premiums in the first place? At what price should a crop future be set so as to be fair to both buyer and seller? It is questions like these that Bernstein, the author of a number of books on economics and finance, answers as he traces the emergence of risk management from calculating the probability of dice games to insuring investment portfolios. Risk management by definition has to do with 'maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and linkage between effect and cause is hidden from us.' But at the end of the day, a risk is still a risk no matter how carefully measured, so where does the time-honored 'gut feeling' come into play? This is the central question of Against the Gods, and the answers are enlightening.We have Blaise Pascal and his probability triangle to thank for the birth of risk management. Pascal solidified the notion that there was a difference between playing games and thinking about playing games. His triangle of numbers is ageometric algebraic equation that can be employed to calculate, for instance, the odds that a team down one game to zero in the World Series has of coming back to win the pennant. (There are 22 combinations of wins and losses out of a possible 64 that the underdog will come back to