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The passage discusses the concept of luck and uncertainty in measurement and risk management. It argues that ascribing events to luck obscures the truth and separates events from their causes. It suggests that until we can distinguish between truly random events and events that are the result of cause and effect, we will never fully understand outcomes or how we got them. The essence of risk management lies in maximizing control over outcomes while minimizing areas where we have no control and the cause and effect relationship is hidden.

The passage references the perspective of Laplace, who believed that there is no such thing as luck and that all events have a cause. Laplace argued that present events are connected to preceding events and that everything, even seemingly insignificant events, are a result of cause and effect. Laplace saw uncertainty as a result of insufficient information or understanding, rather than true randomness. He believed that with more knowledge, human beings could achieve the same level of intelligence as a “vast intelligence” that understands all causes and effects.

The passage also discusses the views of Poincaré, who believed in the importance of cause and effect and the role of information in decision making. Poincaré emphasized the power of cause and effect in predicting outcomes and argued that what appears to be chance to the ignorant is not chance to the scientist. He recognized that some events that seem fortuitous are actually the result of small disturbances or variations in energy.

The passage then introduces the concept of risk management as a practical art. It highlights the limitations of knowledge and the need to make decisions under conditions of uncertainty. It suggests that risk management involves evaluating probabilities and making choices based on the degree of uncertainty that is acceptable. The passage uses examples from finance, insurance, and public health to illustrate the challenges of managing and understanding risk.

Overall, the passage explores the relationship between luck, uncertainty, and risk management. It argues that luck is often used as an explanation for events when the true causes are unknown. It emphasizes the importance of understanding cause and effect and making decisions under conditions of uncertainty. The passage also introduces the idea that risk management is a practical art that involves evaluating probabilities and balancing the need for control with the reality of limited knowledge.

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