Studies have shown that we assess risk based mainly on what we hope to gain, not what we fear to lose. People go to casinos because of the small chance of becoming a millionaire, not because of the very large chance of losing all their money.

It’s no different with the fate of nations. War games in 1918 and 1941 showed that there was a large probability of failure. They also showed there was a very small chance of a smashing success. As for modern financial risk-management techniques, we had better pass over those in silence, out of respect for the dead.

Part of the problem is cultural. This year in Britain, people are celebrating (or in some cases not celebrating) the thirtieth anniversary of Margaret Thatcher becoming prime minister. Thatcher helped publicize the idea that uncontrolled risk-taking was brave and worthy; when in most cases, in fact, it’s either stupid or naïve. Businessmen who took insane risks were given the kind of honors previously reserved for polar explorers and war heroes.

More recently, the willingness to take risks with other peoples’ money was seen as worthy of high salaries and fat bonuses. (I sometimes think that “risk-taking entrepreneur” is a fancy way of saying “greedy idiot”, but I may be overly cynical.) There’s always risk in life, and many successful enterprises involve a degree of uncertainty , but sensible human beings, and sensible organizations, manage to keep it to a minimum.