Part I

THE HISTORY

Mathematical models of nature’s wonders generally come along after a great deal of experience and observation. Mathematical enlightenment of the wonders of chance and luck arose out of the gaming rooms and coffeehouses of seventeenth- and eighteenth-century Europe, when the common person on the street believed his or her destiny was preordained by astrology, tarot and palm reading were the custom, amulets and crosses were worn to ward off the evil eye, and the momentous ideas of mathematical probability were still in their infancy.

In America the gambling experience spread from New Orleans, where life itself was a game of chance; it moved up along the Mississippi on riverboats paddling from Vicksburg to Cleveland. By 2008, gambling had reached Wall Street, where the hard-won mathematical insights into the complexities of risk behavior were ignored, as even shrewd investors turned into reckless gamblers and financial markets reverted to the naive and reckless illusion of luck and unchecked opportunity. In this modern era, with its hard-won insights into the mathematics of probability and risk assessment, this illusion of luck is inexcusable.