History of The Term
According to research by Dembe and Boden, the term dates back to the 17th century and was widely used by English insurance companies by the late 19th century. 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 18th century used "moral" to mean "subjective", which may cloud the true ethical significance in the term.
The concept of moral hazard was the subject of renewed study by economists in the 1960s and then did not imply immoral behavior or fraud; rather, economists would use the term to describe inefficiencies that can occur when risks are displaced, not the ethics or morals of the involved parties.
Read more about this topic: Moral Hazard
Famous quotes containing the words history of the, history of, history and/or term:
“It gives me the greatest pleasure to say, as I do from the bottom of my heart, that never in the history of the country, in any crisis and under any conditions, have our Jewish fellow citizens failed to live up to the highest standards of citizenship and patriotism.”
—William Howard Taft (1857–1930)
“Every library should try to be complete on something, if it were only the history of pinheads.”
—Oliver Wendell Holmes, Sr. (1809–1894)
“Every generation rewrites the past. In easy times history is more or less of an ornamental art, but in times of danger we are driven to the written record by a pressing need to find answers to the riddles of today.... In times of change and danger when there is a quicksand of fear under men’s reasoning, a sense of continuity with generations gone before can stretch like a lifeline across the scary present and get us past that idiot delusion of the exceptional Now that blocks good thinking.”
—John Dos Passos (1896–1970)
“I expect to maintain this contest until successful, or till I die, or am conquered, or my term expires, or Congress or the country forsakes me.”
—Abraham Lincoln (1809–1865)