the.com/moral hazard
insured against consequences, so consequences stop mattering.
means the tendency to take bigger risks when someone else bears the cost of failure.
from coined in 19th-century insurance underwriting to describe policyholders who got careless once losses were covered, later hijacked by economists to explain why safety nets can breed recklessness.
pre-dates economicsinsurers used the term in the 1600s
not immoralityoriginally just meant behavioral risk, not sin
2008 poster childtoo big to fail became shorthand for it
for instance
parental safety nets — trust fund kids taking wild career swings with no downside
war risk insurance — wwi shipowners overloaded vessels once lloyds covered the losses