Gambling and Life

Edward O., Thorp knows a lot about math. You would expect that from a math professor.

Image result for Edward thorp

You might not expect that he would use his knowledge of math to develop systems for gambling. He did that too and he became famous for it. His autobiography is “A Man for all Markets”, and Fred Wilson endorses that book.

The book is about using math to better understand and quantify the risks of taking various actions. That might sound boring. But consider this

  • For most of our history as a species, we have doggedly tried to reduce risk through the pursuit of certainty. Our fascination with religion is jus tone piece of evidence relating to this pursuit.
  • The infatuation with certainty as an ultimate value led to the 20th-century infatuation with ideology and science and quests for the ultimate meaning of everything.
  • We are just starting to realize that humans are not capable of producing certainty on demand. We have to accept uncertainty and risk as part of our systems.

In other words, looking at things from a meta perspective, we are likely to see more and more attention paid to managing risks as part of the value creation process. Less insistence on certainty. More awareness of risk linked to reward.

So are “salaries” a social good? A “tenured positions”? A “job”? All provide a modicum of security – certainty. But compared to what? If this interests you, you might do well by checking out Edward Thorp’s autobiography as part of your summer reading.

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