Product Details

• Amazon Sales Rank: #31790 in Books
• Published on: 1995-02-16
• Original language: English
• Number of items: 1
• Binding: Paperback
• 192 pages

Customer Reviews

A book that must be read
Anyone who can grasp the concepts discussed in this book should read it; it has universal relevance. Adams strips bare the very shaky assumptions upon which much risk assessment is based in the world. It was a shock to me, and I expect it will be a shock to most people. To use a cliche: This book changed my life. More accurately, it changed my world-view. If you need more convincing, take a look at the commendations on the back cover. Any book that can debunk so much of conventional doctrine on road safety, environmentalism, medicine, and so on, yet draw such acclaim from such a diverse range of specialist publications is a book to be reckoned with! As a final note, the book is really very small. However, it is brief and to-the-point; his two hundred pages are worth a thousand from most writers.

The argument for rational fatalism
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply a superb book.
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.