A Good Definition of "Moral Hazard."

The definition that I like appears on pp. 783-4 in the masterful biography of Ludwig von Mises, Mises: The Last Knight of Liberalism, written by Guido Hulsmann. Here it is:

"Artificial markets would make managers irresponsible. Some of the benefits of successful management would still be private (the increased reputation and career advancement of successful managers), but all of the costs of mismanagement would have to be borne by the citizenry at large. As a consequence, the managers of the state could take excessive risks; they would squander society's capital."

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Moral Authority Resides In The Free Market Economy.

Pure and simple - there is no moral authority for ego-driven intervention and the only source of an ego-less economy is a free market economy. That is not to say that a free market economy is absolutely perfect, because it is simply a mirror image of the relatively imperfect state of development of human civilization.

However, the advancement of individuals and of civilization towards perfection is dependent upon the flow of information and that is only at its optimal in a free market economy.

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Liberty Is Not Concessionary.

This is very similar to the emphasis that I give in MORE THAN LAISSEZ-FAIRE. Laissez-faire is not merely a philosophical point of view to be defended or not. It is an expression that was used in the past (and up to the present) to indicate that there is no moral authority to meddle in the economy.

This is the esence of the divine economy theory although the theory itself proves unequivocally that there is no moral authority to meddle in the economy. Upon this foundation rests all of the other new and exciting discoveries!

Follow me on Twitter @DivineEconomy

For more information go to my newly renovated website.

If you know of anyone interested in ethics and economics,
or liberty and justice, please send them this link:
http://divineec.ipower.com/2/