>
> Yes, but what does that have to do with moral hazard? The whole concept was
> dreamed up by law& econ types who thought they had stumbled upon a
> valueless way of reasoning, or something close to it. You could call it
> externalized risk and it would mean the same thing, just as you could rename
> morale enthusiasm or whatever.
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http://en.wikipedia.org/wiki/Moral_hazard
According to research by Dembe and Boden,[14] the term dates back to the 1600s, and was widely used by English insurance companies by the late 1800s. Early usage of the term carried negative connotations, implying fraud or immoral behavior (usually on the part of an insured party). Dembe and Boden point out, however, that prominent mathematicians studying decision making in the 1700s used "moral" to mean "subjective", which may cloud the true ethical significance in the term.[15]
The concept of moral hazard was the subject of renewed study by economists in the 1960s, and at the time did not imply immoral behavior or fraud; rather, economists use the term to describe inefficiencies that can occur when risks are displaced, rather than on the ethics or morals of the involved parties.
[snip]
Be that as it may; as someone noted in a book titled "Wall Street" there's too much moralizing when talking about finance and, by extension the larger issues of capitalism's supposed self-legitimation in the eyes/brains of the public and "the left." This would seem to touch upon the issue of how apologists for capitalism drift towards purging their discourse of moralese, except and until it undermines their own justificatory approach.
The work of Henry Manne is pivotal on this issue.