The Anatomy of Uncertainty and Risk:
From Sumerian Mythology to the Present
Day
PART ONE, The Ancient Face of Uncertainty: Sumer
"Fate in Sumerian Mythology: The Limits of Divine Decree and
Humanity"
1. Writing
Sumerian cuneiform was born around
3400–3200 BCE in Uruk. It most likely emerged from the needs of the temple and
palace economy, to record quantities of grain, numbers of sheep, and who owed
what to whom. The vast majority of the earliest written documents probably
began this way: as accounting records, not as poetry, hymns, or mythological
tales.
When we invented writing, what we first
tried to say was not a story or a prayer. It's strange to think that the first
thing we wrote was about keeping accounts: this much is mine, this much is
yours, the quantity is such-and-such. When we set aside the legends and myths
we associate with Sumerian history, this is what remains.
Of course, not everything was written
simply to record what already existed, the real point was to fix future
uncertainties before they could arise, to resolve potential disputes before
they emerged. In this sense, writing was a tool developed against the erosive
effects of time.
When the Sumerians did this, a mythological
world stretched around them from the sky to the earth to the underworld. The
gods ruled over everything; they determined the future. And yet the merchant or
temple scribe bent over their tablet, carving out debts, credits, and
contracts.
2. Divine Hierarchy and Mythology
2.1. An, Enlil, Enki
At the very top of the Sumerian divine
hierarchy stood An (Akkadian: Anu). As the first mover of the heavens, in
Platonic or Aristotelian terms, he occupied the most transcendent tier of
divine order. Yet despite this elevated position, the true master of everyday
workings and order was Enlil. Enlil was, in short, the executive. As the god of
wind and air, his decisions carried an irrevocable sovereignty; it was
unthinkable for other gods to challenge him. Beside Enlil stood Enki, the god
of fresh waters, wisdom, and intelligence, that ancient figure who represented
flexibility and creativity within the rigid lines of order.
At the center of all this hierarchy stood
the Tablet of Destinies (Sumerian: dub namtarra), the embodiment of the
authority to determine fate. No text says exactly what was written on the
tablet, because what mattered was not its content but its very existence.
Whoever carried it held absolute sovereignty over destiny. But being made
physical in this way also meant it could be stolen.
In the Legend of Anzu, that enormous
silhouette, half lion and half eagle (the Sumerians called it Imdugud), which
once gathered its courage and snatched the reins of fate from Enlil's hands,
the universe experienced something like brain death. Rivers stopped flowing,
the earth grew sullen, the gods' thunderous voices sank into deep silence.
Because when the Tablet of Destinies was stolen, order itself, fate itself, had
been suspended. Until Enlil's son Ninurta appeared and brought this ancient
thief to heel, the world held its breath and waited. When the tablet was
returned, life began to flow again from where it had left off, as if it had
never stopped.
The Sumerians had not left uncertainty
abstract, they had transformed it into something tangible, something you could
hold in your hands.
2.2. Namtar
Among Enlil's children, there is one we
cannot pass over without mention: Namtar. In Sumerian, the name directly means
'fate' or 'destiny.' But Namtar is not the abstract concept we might imagine,
it is a personified, tangible being that keeps walking until it arrives at your
door. When we say in everyday speech 'evil has found us,' the ancient hand that
seeks and finds, that never misses its mark, that is precisely Namtar itself.
Namtar is fate knocking at the door, and the Anunnaki are the assembly that stamps
its seal beneath that fate.
Namtar was the messenger of Ereshkigal, the
goddess of the underworld. It was Namtar who brought disease and death into the
world. In Sumerian poetry, illness is sometimes referred to as 'the hand of
Namtar.' The healing goddess Ninisina is summoned in ritual texts specifically
against Namtar, meaning the oldest form of medicine was born from within this
very conflict.
There were no temples built for Namtar, no
statues erected, and almost no prayers directed at it, until someone arrived at
the threshold of death. In the deathbed narrative of Gilgamesh, and in the
funeral poem of Ur-Namma, offerings to Namtar are mentioned. He was turned to
only at the very last moment, when no other option remained.
When you think about it, this is a very
familiar psychology. To postpone confronting the inevitable for as long as
possible, to keep it outside the bounds of daily life, to build no temple for
it. But turning one's back on that door does not mean the door does not exist.
2.3. Enki: If Fate Is Inevitable, What Can We Do?
Enlil set the rules. Namtar executed the
final verdict. Enki, between the two, searched for a gap, an opening within the
system.
In the Atrahasis Epic, Enlil can no longer
bear the noise humanity makes. He sends plague first, then famine, then the
flood. Each time, it is Enki who saves humanity, not by directly opposing
Enlil, but by finding ways around him. When the plague comes, he tells people
to direct all their offerings to the single god responsible for the plague,
that is, to Namtar. That god is overwhelmed with gifts, grows ashamed, and
withdraws the plague. They survive the famine by a similar method. When it
comes to the flood, Enki whispers to Ziusudra, the Sumerian version of Noah, in
a dream: Build a ship. Enki does not directly defy Enlil's command, but finds
within that command an opening through which life can continue.
This narrative pattern says something very
modern: You cannot reduce risk to zero, but you can redirect it. You cannot
change the shape of fate, but you can choose how to respond to it. Every
intervention by Enki is precisely the exercise of this choice. In modern
language we call this 'risk management'; in the Sumerian experience, it was
called 'Enki's whisper.'
3. Evil
3.1. Evil Was Also Part of the System
From today's perspective, one of the
strangest concepts in Sumerian mythology is 'Me', the totality of divine
decrees that sustain the workings of civilization. It had more than a hundred
entries: kingship, priesthood, wisdom, music, lamentation, crafts, victory...
Up to this point, the concepts feel close to our own. But the list also
contains surprising items: the destruction of cities, lies, enmity. The
Sumerians had not kept evil outside the system, they had taken it inside.
These, too, were decrees to be accepted, not questioned. The Sumerians had
domesticated negative situations by embedding them within the system rather
than pushing them to its margins. For them, risk and evil were not malfunctions
but operating principles of the universe.
Enki was the guardian of the 'Me.' The
goddess of love and war, Inanna, steals them. According to the legend, Inanna
visits Enki and they drink together. Enki becomes generous and offers the Me
one by one as gifts. Inanna loads them onto her boat and sets out toward her
city, Uruk. By the time Enki sobers up, it is too late. Fate and decrees were
not fixed, they could be negotiated, even stolen. They contained both good and
evil within them. Risk was not a malfunction outside the system; it was part of
the system itself.
(Note: Let us not confuse the Me with the Tablet of Destinies.
While the Tablet of Destinies is a single object determining cosmic fate and
the ultimate authority of the gods, the Me are plural and encompass both the
creative and destructive rules of civilization. Both are embodied powers, but
they play different roles.)
These 'Me', the divine operating system of
civilization, might have been carried in celestial boats and passed between
gods, but they found their true echo in the dusty streets of the earth. As
Gönül Tekin said in a program: what exists in the sky also exists on earth. (We
will later encounter this approach in Greece as a Platonic perspective.) The
abstract tablets of destruction or wisdom that Inanna brought to Uruk were not
mere legends for a mortal Sumerian, they were the backdrop of very concrete life
struggles: a ship sinking, a harvest failing, an inability to repay a debt. As
this cosmic gamble among the gods merged with humanity's daily struggle for
survival, the metaphysical began to yield its place to mathematics. While the
great and heavy tablet of fate hung suspended in the heavens, the Sumerian man
would take another tool into his own hands to manage his small, personal fate,
tablets of clay, wet and ready for him to carve his own signature.
PART TWO, Practical Tools of Risk
4. Reading the Liver of the Sky
For the Sumerians, managing uncertainty was
not merely a matter of scratching figures and writing into clay. They believed
the universe was a vast 'writing tablet,' and that the gods left their
decisions about the future as coded messages in every corner of this tablet.
Divination for them was not 'predicting the future' but 'reading the codes the
god has written into the universe.' At this point, professional
diviner-priests, the Baru class, entered the scene, working much like today's
risk analysts.
The Baru priests carried out a highly
technical and observation-based reading. Before a caravan set out or a
strategic move was made, they used the following methods as decision-support
tools:
One method was Liver Divination: They
examined the contours of the liver of a sacrificed sheep. The liver was where
the god had written its current intentions. A spot on the liver was read as a
'bug' in the system or an approaching 'crisis' signal, and the operation was
halted. 'If there are two furrows on the right side of the liver, the enemy
army will attack the kingdom from two directions.' These texts show that the
Baru priests were not making arbitrary interpretations but acting on records
and experience accumulated over thousands of years. Another method was Oil and
Water Divination: They poured water into a vessel, dripped oil on it, and
analyzed future possibilities by observing the shapes the oil formed on the
water.
Unlike the Oracle of Delphi in Ancient
Greece, which was perhaps the most centralized and well-known, Sumer's system
did not operate through a single centralized 'divination monopoly.' Instead, it
was a widespread network dispersed across cities like Ur, Uruk, and Nippur,
permeating daily life. While kings sought the approval of priests in major
temples for great affairs of state, a merchant could consult the priests in
their own local temple.
One of the most intimate and effective
methods in this decision-support process was the Dream Incubation (Incubation)
ritual. Sumerian kings, before embarking on a large construction project or
going to war, would fall asleep in a sacred corner of the temple and await a
direct sign from the gods. The clearest example of this institutionalized dream
divination is King Gudea of Lagash, who received the plan and instructions for
the temple he would build directly from the god Ningirsu in a dream.
In fact, this tradition is the exact
archetype, five thousand years old, of the practice still alive in Anatolia's
collective memory: 'istikhara' (seeking divine guidance through sleep), or in
popular usage, 'rüyaya yatmak' (lying down to dream). If we still lie down to
seek a dream when faced with an indecision we cannot resolve, we are displaying
the same ancient reflex as that Sumerian king: entrusting the uncertainty our
consciousness cannot solve to the guidance of the unconscious or the divine, and
seeking a kind of support.
While Delphi's prophecies were deliberately
ambiguous and open to interpretation, this decision-support mechanism in Sumer
functioned like a 'database of events' recorded on thousands of tablets.
Expressions such as 'If there is a spot on the right side of the sheep's liver
(risk), the king's army will be defeated (outcome)' transformed divination from
a ritual into a kind of early statistical science based on accumulated past
experience.
The Sumerian, by writing a promissory note
on a clay tablet, was fixing the risk created by human agency; by having the
Baru priest read a liver, or by lying down to dream, they were trying to
measure the uncertainty created by nature and the gods. One was
calculation-based, the other ritualistic, but the purpose was the same: to
transform the darkness of the future into manageable data.
5. The Tablet of Enlil, the Tablet of the Merchant
All of this, the gods, the myths, the
beliefs about fate, was genuinely believed. Enlil's decision was irrevocable,
Namtar was unavoidable, the content of the 'Me', both good and evil, was
unchangeable. Despite this, or perhaps precisely because of it, the Sumerian
merchant would bow to Enlil's capricious fate at the temple in the morning, and
then at their shop in the evening, lean over a clay tablet to secure themselves
within that fate. The Sumerians knew how to fit both of these into the same
world.
In tablets from the 3rd millennium BCE, we
see interest-bearing loan contracts. Thirty-three percent on barley, twenty
percent on silver. These rates were not set by gods, but by humans. In
subsequent centuries, the Code of Hammurabi went a step further: if goods were
lost on a trade expedition, cancellation of the debt became possible. The
version of maritime insurance from four thousand years ago. Assyrian merchants
recorded every transaction in clay along the caravan routes stretching to
Anatolia. The world's first known promissory note was written within this
network.
So this is what happened: The Sumerian
merchant left fate to the gods, but took responsibility for risk themselves.
The two were not the same thing. Fate was on Enlil's tablet; Risk was on the
merchant's tablet, and thus uncertainty was on record. Enlil could send a storm
(fate), but who would pay the debt for the ship that sank in that storm was
written on the merchant's tablet (risk).
This distinction may seem small, but it is
not. Making peace with what you cannot control, and putting what you can
control into writing, the fact that both of these acts were performed
simultaneously, by the same person, is perhaps one of the most important mental
steps in the history of humanity.
5.1. The Flood: Reducing Risk to Zero, or Making It Livable?
In the flood section of Atrahasis, Enlil
has grown weary of humanity's noise and decides to send a great flood. His
solution might seem a bit radical: eliminate the threat entirely, wipe out
uncertainty, destroy humanity, start from scratch. Enki, however, says no, not
to Enlil, but to the outcome. He has Ziusudra build a ship, saving humanity,
animals, and seeds. The flood passes.
Enlil's logic: Reduce risk to zero. Enki's
logic: Make risk livable. These two approaches still confront us today. Should
a system be shut down completely, or designed to remain standing even in the
worst-case scenario? In finance and technology, we call this resilience. In
politics, sustainability. In engineering, fail-safe. Sumer posed the first
question, and Enki's answer aligns with the fundamental logic of modern risk
management. The goal is not zero risk, but the ability to live within risk.
5.2. Inanna's Descent to the Underworld
One of the oldest narratives in Sumerian
mythology is the story of a goddess who willingly goes to the threshold of
death. Most Sumerian texts tell us of the heroic deeds of gods or the
establishment of cosmic order. Inanna's descent to the underworld (Kur) departs
from this pattern. There is no conquest here, no victory. What happens is
stranger and more human: a goddess, without anyone forcing her, descends to Kur
of her own free will.
Although the text does not clearly state
why she went, some interpretations read this as an attempt at a power grab;
others point to something more indirect, the desire to see death firsthand, to
know it. Perhaps both at once. But the ambiguity of the reason does not weaken
the story; on the contrary, it makes it more realistic. Because people, too,
often cannot fully explain what draws them in a particular direction.
The underworld has seven gates, each with a
price. At each gate, Inanna is forced to surrender one of the powers she
possesses to the gatekeeper: first the crown, then jewels, her staff, and
finally her royal garments. This slow stripping can be read symbolically, but
the real power of the text lies elsewhere. With each gate, Inanna's
invulnerability also melts away. When she passes through the final gate, the
figure before us has completely lost her divine status, she is open and
defenseless.
When she appears before Ereshkigal, the
queen of the underworld, seven judges cast the 'gaze of death' upon her, and
Inanna dies. She is hung on a hook and left there. In ancient Near Eastern
texts, this scene has been repeatedly depicted as the symbol of absolute
helplessness. But what is striking here is that death is portrayed not as
instantaneous but as a suspended state, not an ending, but a waiting.
The portion of the story up to this point
is dramatic, but not surprising, mythology is full of death scenes. The truly
interesting detail is given before Inanna even sets out: the instructions she
leaves for her faithful servant Ninshubur:
'Wait three days. If I do not return, go
first to Enlil, then to Nanna, and finally to Enki. One of them will surely
find a way.'
These instructions lift the text to another
plane. While plunging into uncertainty, Inanna has already thought about the
conditions of her return. Against the possibility that she herself could not
activate the divine system, she has left a mechanism outside. This is not
weakness, it is a sign of awareness. If the worst case comes to pass, the next
step is already known.
In the end, help comes from Enki. He
creates two small beings from the dirt under his fingernails and sends them to
Inanna's side. These beings soften Ereshkigal, and Inanna is taken down from
that hook and returned to life.
But the return is not a full-blown rescue
either. Alchemists would call this 'equivalent exchange': to gain something,
you must leave behind something of equal value. The underworld applies this law
to the letter, Inanna can ascend, but she must leave someone to take her place.
Nothing is returned without cost. The underworld is meticulous about this.
Inanna pays this price, but that is another story.
5.3. Filing a Dissent Against Fate
Sumerian mythology was not written as a
guide to risk management, yet within it, both mythologically and practically,
lie the earliest traces of humanity's relationship with uncertainty.
Enlil's tablet of destiny could not be
changed, but it could be stolen. Namtar was unavoidable, but healing goddesses
could be summoned against it. The 'Me' contained evil too, and could change
hands. In every impasse, Enki searched for a new path. Inanna prepared her plan
before descending to the underworld. And throughout this divine framework, the
Sumerian merchant was transferring risk from fate to writing.
The Sumerians left fate to the gods and
kept risk for themselves. God's portion to God, humanity's portion to humanity,
this distinction had already been made more than five thousand years ago.
The first notch the Sumerian scribe carved
into clay looks, in hindsight, like the beginning of a long road. Pascal's
probability calculations at the gambling table, Kahneman's experiments, the
algorithms that fill our financial screens today, all of them circle back to
roughly the same question: How do we eliminate uncertainty? What do we do with
it? The Sumerians' answer was very simple: We make the distinction, we put it
in writing, we measure and manage it.
Setting aside what was written on those
tablets, this attitude is simultaneously the story of humanity's stance, its
fear, its calculation, and its hope in the face of the unknown. Now let us
fast-forward a little, leaving Sumer's skies, dusty streets, and seas behind,
to look at the rational labyrinths of the modern world, to Bernstein's triumph,
and to our minds' games with uncertainty.
PART THREE, On Living with Uncertainty
Risk, Modern Humanity
Between the Sumerian merchant's clay tablet
and today's stock exchange lie five thousand years. But the distance between
what that merchant did and what an investor does today is far shorter than we
might imagine.
Some time ago I read Peter Bernstein's
Against the Gods: The Remarkable Story of Risk. The book was written thirty
years ago, but what it describes, 'humanity's relationship with uncertainty',
feels so fresh. The uncertainty of the future, the not knowing, the not knowing
what to do with that uncertainty.
When risk management is mentioned, finance
immediately comes to mind: stock markets, portfolios, insurance policies. But
Bernstein is speaking of something far more fundamental. What he describes is
humanity's effort to wrest fate from the hands of the gods, or more precisely,
the never-ending struggle it has waged in that pursuit.
6. Probability
We said that five thousand years passed
from Sumer to Pascal, and for most of those five thousand years, uncertainty
was firmly within the domain of the gods. In Ancient Greece, Tyche,
blindfolded, rudder in hand, distributed fortune capriciously and unpredictably.
For the Romans she became Fortuna; they erected her statues, sacrificed to her.
You cannot know the future, so make peace with the powers that rule the future.
Fulfill your obligations so that the powerful stand by your side. By their own
lights and the spirit of their time, it was a coherent worldview.
The contradiction Bernstein draws attention
to is this: The Greek world borrowed geometry and astronomical calculation from
Egypt and Mesopotamia. Even Thales, considered the founder of philosophy, was
from the Ionian coast of Anatolia, most likely of Phoenician origin, he studied
in Egypt and taught in Miletus. I write this to show the flow of knowledge. The
Greeks' original contribution was not taking this knowledge but what they did
with it: their effort to tie natural events not to the whims of gods but to
unchanging principles. Proof, deduction, induction, the question of 'why', but
it was precisely this question that blocked the path toward probability
calculation. To express the future in numbers, to open it to discussion, meant
stepping into the domain of the gods. Some doors remain unopened, not because
they shouldn't be opened, but because the time has not yet come.
The paradox of the Greek world: having
inherited knowledge and being capable of doing so much with it, yet coming to a
stop precisely on the matter of calculating risk. This, of course, does not
mean the Greeks lived at peace with uncertainty. On the contrary, they
developed an extraordinarily sophisticated system for managing it, not merely
mathematical, but institutional.
6.1. Delphi
To think of Delphi simply as a place of
prophecy is to sell it short. From today's perspective, a more accurate
description might be: the most effective uncertainty management institution of
the ancient world.
From the 8th century BCE onward, for
roughly a thousand years, the Greek world did not declare war, establish
colonies, form alliances, or make major commercial decisions without consulting
Delphi. The Pythia, the priestess at Apollo's temple, would enter a trance
state on a tripod and give her response. The answers were almost always
ambiguous, and this ambiguity was not a flaw but the very heart of the system.
(Note: According to legend, Apollo killed the giant serpent Python that
inhabited the sacred site at Delphi in order to claim it. The name 'Pythia'
derives from this serpent. Apollo's defeat of chaos to bring order, and
prophecy, symbolizes the taming of wild nature.)
The story of Lydian King Croesus is one of
the most striking tragedies in the ancient world concerning the management of
uncertainty and the misreading of knowledge. According to Herodotus, before
taking action against the rising Persian threat, Croesus subjects the leading
oracular centers of the age to a 'truth test,' sending emissaries to seven
different centers and asking them to name what he is doing at that very moment.
Only the Pythia at Delphi passes this impossible test, by knowing that the king
is at that moment boiling a turtle and lamb in a bronze cauldron, and thereby
earns his unshakeable trust. Intoxicated by this 'verified' knowledge, and
after making enormous golden donations to Delphi, the king asks his famous
question: 'Should I make war on the Persians?' The Pythia's reply, 'If you
cross the Halys (the Kızılırmak River), a great empire will be destroyed', is
interpreted by Croesus as a prophecy of his own victory. But when the king
crosses the Halys with his army and loses the war, he learns bitterly that the
empire destroyed was not that of the Persians but his own. This narrative is
the oldest example of how information, even when technically correct, can
become the instrument of systemic ruin when interpreted through subjective
desires and a one-sided perspective, a 'self-fulfilling prophecy of one's own
downfall.'
It is possible to read this story as an
account of a bad prophetic system. But it can also be read differently: the
Pythia did not give Croesus certainty, she returned uncertainty to him as it
was. The sentence 'An empire will fall' did not make clear which empire was
meant. Croesus's error lay in his interpretation, his raw courage, his desire
to transform uncertainty into prediction. In a modern analogy: the model gave
the correct signal, but the decision-maker turned it into determinism.
Esther Eidinow's research on this subject
reveals something striking: Greeks typically went to an oracular center to have
a decision they had already made validated. The questions were most often
phrased as 'Should I do this?', that is, in a yes-or-no format. This turned the
oracle not into a decision-making tool but a decision-legitimizing tool.
Uncertainty was not eliminated; it was simply made easier to carry. The god had
approved it, even in the worst case, responsibility was shared.
Looking from Eidinow's ancient perspective
back toward the Sumerians, they offer a magnificent answer to the second half
of this article's question: 'How did humanity take fate from the hands of the
gods?' The Sumerians, by recording risk, provided a tremendous response.
For the Sumerians, writing was a way of
freezing uncertainty by transforming it into a universal library (alamatu),
they saw the world as a vast tablet to be read. For the Greeks, while writing
was an advanced tool, the real authority at the moment of risk was not the
fixed text but the text's immediate and ambiguous interpretation. While the
Sumerian archived risk as 'past data,' the Greek constructed it as a 'future
narrative.'
Sumerians managed risk like a statistical
archive (an enormous catalogue of past events). Greeks managed risk through
narrative legitimacy (immediate interpretation and political approval). Modern
humanity manages risk through probabilistic simulation (mathematical
calculation of future scenarios).
Alongside this, there were curse tablets,
katadesmoi. Eidinow describes these as the exact reverse side of the oracle:
while with the oracle people tried to look past uncertainty, with curse tablets
they tried to preemptively prevent possible future harm. For a rival to fail,
for a lawsuit to be won, to return safely from a journey. The common ground:
both were practical responses to the anxiety created by uncertainty. The oracle
and the curse, two hands trying to hold the two faces of fortune.
In Rome, the same function was performed by
augurs, priests who interpreted the flight of birds, the direction lightning
struck, and the internal organs of animals. Before battle, a sacrifice would be
made, the liver examined, and a decision reached. This too was an ambiguous
system, open to interpretation, and therefore seemingly infallible. But
functionally it was no different from the oracle: taking uncertainty and
placing it within a ritual, making it manageable.
No one in the ancient world tried to reduce
uncertainty to zero. They tried to place it within a legitimate framework, and
by their own standards and time, it was well constructed.
6.2. Pascal, Fermat
In 1654, letters were exchanged between
Blaise Pascal and Pierre de Fermat over a gambling problem posed by a French
nobleman. How should the stakes be divided in an unfinished game? Today we
might call it a middle school math problem. But in those letters, one of the
most critical ideas in the history of humanity was born: Can the probability of
something that has not yet happened be calculated?
Until that moment, the word 'probable' was,
as described above, almost a philosophical abstraction. What Pascal and Fermat
did was to render it in numbers. It was not possible to know the future
perfectly, but it was possible to measure the uncertainty of the future.
Bernstein calls this 'a triumph over the
gods.' I am somewhat more cautious. Was it a triumph, or was it reinventing
them in a different guise?
PART FOUR, The Blind Spots of Reason
For three hundred years, probability theory
made enormous strides, Bernoulli, Gauss, the portfolio theorists of the 20th
century. At one point it seemed as though the work was done; we could now put
risk into numbers.
Before Kahneman and Tversky disrupted this
picture, everyone believed it. The experiments they conducted in the 1970s were
unsettling: people did not make rational decisions in the face of uncertainty,
and experts behaved the same as ordinary people. Similar errors, the same
patterns, occurring not randomly but in predictably consistent ways. For
example: Winning 100 lira and losing 100 lira looks mathematically equivalent,
but our brains do not perceive it that way. The weight of losing is roughly
twice the lightness of gaining, a small asymmetry that explains a great deal.
Why do we hold onto a losing stock? Why do
we sell a winning one too early? Why does eighty percent success not feel the
same as twenty percent failure, even though the mathematics is identical? It is
clearly about how our brains work.
Kahneman speaks of two systems. One is
fast, one is slow; the slow one makes better decisions but tires quickly. After
that, the fast one takes over, and what we often think of as intuition turns
out to be fear. Does knowing this save a person? Probably not, but it is better
than going in blind.
7. The Modern World's Flood: Black Swans
For the Sumerians, the Flood was not simply
a destructive natural event, it was the moment when the entire order of the
'Me' collapsed entirely, when unpredictability reached its peak, that 'moment
of absolute uncertainty.' Thousands of years later, when Nassim Taleb
introduced the concept of the 'Black Swan' into modern literature, he was
speaking of the same ancient fear: those great rupture moments when the future
cannot be predicted by looking at past data.
The famous 'turkey problem' Taleb uses to
explain this theory illustrates statistics' greatest blind spot: For a turkey
that has been fed by its owner for a thousand days, the probability of the
thousand-and-first day also being a feeding day is, by past data, perfect, but
that day is Thanksgiving, and the turkey's throat is cut. The turkey's tragedy
lay not in its statistics being wrong, but in not knowing that a catastrophe it
had never experienced (the act of being slaughtered) could not be captured by statistics.
When we place Taleb's famous triad, rarity,
enormous impact, and the post-hoc rationalizations of 'it was obvious all
along', beside the descriptions of the Flood in Sumerian tablets, we see that
our fears have not changed at all. The Sumerians had tried to impose a logic on
the Flood by attributing it to a momentary burst of rage from Enlil, a divine
caprice. Today, with a similar reflex, we find it difficult to acknowledge that
we view economic crises or global upheavals as minor deviations from our models,
and that those models were built from the start with 'turkey logic', believing
that looking at yesterday's sunshine could predict tomorrow's flood.
Yet Enki's secret plan, whispered to
Ziusudra, is in fact humanity's very first genuine 'Plan B.' You cannot know
when the Black Swan will beat its wings, but you must have already built a ship
that won't sink when it arrives. Risk management is never about trusting those
arrogant statistical calculations that claim the storm will never come, it is
about accepting the inevitability of the storm and building a resilient,
adaptable structure that will remain above water.
7.1. Money, Portfolios, and the Arrogance of Models
Financial risk management gained genuine
maturity in the 20th century. Harry Markowitz developed portfolio theory:
holding assets that move in opposite directions reduces total risk. With each
step, uncertainty seemed to be coming a little more under control.
Then 2008 arrived.
The world's largest financial institutions
collapsed at the very heart of their mathematical models. Things that the
models said were 'a one-in-a-trillion chance' came to pass. Nassim Taleb, as
mentioned earlier, called this the 'black swan.' Models cannot see what has
never been seen before, because models learn from the past, and things that
have never existed in the past have no statistics.
This does not mean mathematics is useless.
It means that risk measurement has a structural limit. Bernstein says the same:
even the most sophisticated tools ultimately have to rely on human intuition,
habit, and experience. Risk management is a science, but it is also an art.
For everyday life, this means: don't put
all your savings in one place. This applies not only to stocks but to sources
of income, skills, and relationships as well. Diversification is portfolio
theory's most powerful idea, one that extends far beyond the stock market.
PART FIVE, Environmental and Existential Risks
8. Climate: What We Cannot Calculate
Climate change is one of the most important
topics of recent years, and perhaps one of the most complex areas for risk
theory, one of those domains where conventional approaches don't quite fit. In
normal risk scenarios, we learn from the past and try to predict the future.
For earthquake insurance, for instance, there is seismic data going back more
than a hundred years; for life insurance, actuaries have mortality tables. But
when it comes to climate risk, we find that records of past events are sparse.
We are trying to predict the future behavior of an environmental and natural
system we have never experienced before, and we don't know, or barely know,
whether the system itself will remain stable.
Economist Nicholas Stern, in the Stern
Review, defined climate risk as the greatest externality in the history of
markets. One of his examples is this: a factory emits carbon without paying for
it; the cost is passed forward into the future, dispersed, rendered ambiguous.
Not one of these companies records this as a balance sheet item, until they are
forced to see it.
When we add Kahneman's findings here, we
see that people systematically underestimate distant and uncertain risks.
Something that will happen in 2100 does not feel real to our minds, does not
register emotionally. This is precisely where the mechanics of climate risk
matter. As I mentioned above, climate risk works like compound interest, a
small negligence today returns decades later as a compounded headache, a
compounded burden.
The human mind that has evolved risk
management is, ironically, also coded to feel this type of risk lightly. We
respond to near, concrete, immediately felt threats, but we are blunted to
distant and uncertain ones. Is this a moral problem, then, or a cognitive
design flaw? The two are entangled.
Cognitively, the brain we inherited from
ancestors who were chased by lions on the savanna cannot perceive slow-fuse
bombs that will detonate centuries from now. Let alone that, in our world
shaken by computerized warfare, we cannot even register deaths in other
countries. We are blunted to what is not at our doorstep. Morally, we find
ourselves inside a crime whose perpetrator is lost among papers and made
ambiguous, whose victim will not be born for centuries. We hide and disperse
responsibility so subtly across space and time that our conscience is not
crushed beneath it. With these design flaws (let us not fall into the trap here
of saying: what can we do, that's just our nature. No, because we know what we
are doing, because we are aware, this burden remains with us), that is, in the
shadow of the enormous risks we ourselves have created, one question looks
forward: If our nature cannot grasp the future on this scale, how do we save
that future?
8.1. Life, Uncalculated
When we reflect on the subjects we have
covered, from the Sumerian merchant's clay tablet, to probability calculations,
to how the human mind works, to the 2008 crisis, we must historically ask: How
do we live without knowing the future?
Risk management is our longest-running
answer to this question. We poured uncertainty from the gods onto tablets, into
papers, into probability calculations, we put a price on it. Portfolio theory
(don't put your eggs in one basket, diversify) laid out the mathematical
dimension of this process. Kahneman showed us our own mental shortcuts. All of
these have taken their rightful place in our history as real achievements.
But when we got here, we learned something
else as well: every new tool we developed also brought a new blind spot with
it. Probability calculation arrived, and we began to more comfortably ignore
risks we couldn't measure. Portfolio models arrived, and we became more exposed
to shocks outside the model. Artificial intelligence entered our
decision-making processes, and finding where responsibility lies became even
harder.
Let's return to Bernstein's title: How much
progress have we made against the gods, does it look like we can win? We cannot
control the dice, but we can calculate probabilities. We cannot topple Fortuna,
but we can found insurance companies to protect ourselves from her. We may not
be able to stop climate catastrophe, but we can build carbon models.
We see that risk management does not
eliminate uncertainty, but it does make it livable, it places it before us in a
visible form. To exist by thinking with the future rather than fearing it is a
new kind of risk, but we can also call it a human one.
8.2. What Remains
So what might lie beyond what Bernstein
called 'triumph'?
At this stage, our approach to uncertainty
appears one-directional: reduce it, manage it, transfer it. Collect more data,
build better models, predict more precisely. We have seen that uncertainty is a
problem, a condition to be solved, and how it has been handled from the
Sumerians onward.
In the 20th century, physics showed us
something else. Heisenberg's uncertainty principle reveals that you cannot
simultaneously know both the position and the velocity of a particle with
precision. This arises not from measurement error but from the structure of the
universe itself. In other words, uncertainty is not merely a product of our
ignorance, it is a property built into reality itself. Accepting this is quite
a different starting point, isn't it.
The second issue is psychological. The
brain tries to quickly eliminate that cognitive tension, the sense of threat,
that uncertainty creates. This is why, instead of waiting for a rational
analysis, it latches onto the first certainty it finds, even if that certainty
is wrong, and silences the voice of uncertainty. To build a different
relationship with uncertainty, one must first recognize this reflex. Psychology
calls this 'Tolerance of Ambiguity', but even 'tolerance' is the wrong word. It
implies that uncertainty is a pain to be endured. Yet some people, some
cultures, carry it differently: with curiosity, openness, even as a source of
energy. The same uncertainty paralyzes one person while it spurs another into
motion. The difference is not outside, it is within. (Tolerance of Ambiguity: a
concept introduced by Else Frenkel-Brunswik in 1948. The central question: what
do people do when they encounter situations with no clear answer?)
A writer, for instance, sits down at the
desk without knowing what the outcome will be, and writes; sometimes they veer
off into new directions along the way, and this propels them forward rather
than stopping them. Feynman considered saying 'I don't know' a virtue. The best
risk managers are also those who accept that the model does not cover
everything. The Japanese aesthetic of wabi-sabi sees imperfection as beauty;
Taoist philosophy considers uncertainty the natural state of things,
recommending flow instead of resistance. The Western world's (which is the side
I have been presenting throughout this text, I hope on another occasion I can
bring in other cultures as well) quest for certainty is not a universal,
singular truth.
The third issue is practical. Current risk
management is largely defensive: prevent the bad, minimize the loss, prepare
for the worst-case scenario. But there is another question worth asking: What
would we lose without uncertainty? Entrepreneurship finds its greatest returns
in the most uncertain fields; science is born in questions whose answers are
unknown. Uncertainty is not merely a risk to be managed, it is also the ground
from which everything emerges.
Perhaps the story of the war waged against
the gods is not a victory narrative. Everything we thought was a triumph
brought with it a new question. We measured uncertainty, and the unmeasurable
grew. We built models, and what lay outside the models struck us.
But we also saw this: the greatest things
were born in that very dark space. Science in questions without answers, art in
beginning without knowing the end, entrepreneurship in uncertain steps.
The Sumerian merchant knew this
instinctively, bowing to Enlil in the morning, then bending over their own
tablet in the evening. They left fate to the gods and stayed with risk
themselves. Perhaps that is still the point: knowing what to hold onto, and what
to let go.
