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:
“The history of the world is none other than the progress of the consciousness of freedom.”
—Georg Wilhelm Friedrich Hegel (1770–1831)
“I am not a literary man.... I am a man of science, and I am interested in that branch of Anthropology which deals with the history of human speech.”
—J.A.H. (James Augustus Henry)
“It is the true office of history to represent the events themselves, together with the counsels, and to leave the observations and conclusions thereupon to the liberty and faculty of every man’s judgement.”
—Francis Bacon (1561–1626)
“No—is a term very frequently employed by the fair, when they mean everything else but a negative. Their yes is always yes; but their no is not always no.”
—Anonymous, U.S. women’s magazine contributor. M, Weekly Visitor or Ladies Miscellany, p. 203 (April 1803)