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The New Religion of Risk Management

by Peter L. Bernstein, Harvard Business Review, Mar.-Apr. 1996, p. 57-51.

This is a very interesting article about the origins of decision analysis. "More than any other development, the quantification of risk defines the boundary between modern times and the rest of history."

Risk management is one of the pillars of capitalism. Risk-taking is necessary for making improvements in the world. Without risk analysis, we would be without great bridges, vaccines, and airplanes. Without fire insurance, only the wealthiest could afford to own homes.

Decision analysis allows "people to take more risks than they otherwise would - a benefit to society, which cannot progress without risk takers."

The article surveys the origins of risk management. This is immensely interesting to me, because I've found decision analysis history conflicting and difficult to obtain.

Peter Bernsein is the author of Capital ideas: The Improbable Origins of Modern Wall Street (The Free Press, 1992).

--John Schuyler June 1996