In certain ways, that’s true. I’m not completely sure what Dave means by “win” and “lose”, but yes, moral hazard is created when you remove risk but allow the potential to profit to remain. There are things the individual can do to minimize risk on his own, but of course these come with costs. The unethical part comes in when force is involved…such as the bailouts. When the government takes your money under threat of force (i.e. you have no choice) and then hands it over to someone else, obviously that is wrong. (See “George Ought to Help”).
Not so fast. As Thomas Sowell has pointed out (I think in this interview actually, and elsewhere) people believed the same thing about the Jews in the past…that they were just useless middlemen who provided no value at all…they just shoved themselves in the middle of transactions and took a piece of the action withtout adding anything…but when all these money merchants were shoved out of town, the economies fell apart. There is a social function of stock speculators, as well as insurance, futures markets, credit default swaps, and banks.
The tough part comes in when you have to account for gains made by money being printed out of thin air…and then, not only that, but money being printed and then “lent” to an organization with the monopoly power of force, which then uses that power to steal money from a bunch of other people to pay back its debt. That’s where it gets hard to really talk legitimacy of profit, because at the root of the whole system lies illegitimacy.
You’re close. As Clayton points out, it’s not the fact that you’re charging interest…it’s the fact that money has been created out of thin air to begin with. That’s when it became unethical…
Basically, yeah. You can definitely get into more detail and specifics, but that’s basically it…
(unfortunately that is more than likely the only part of the “Four Horsemen” film worth watching. So if you’re interested in a documentary, we can recommend quite a few.)
P.S.
This may prove helpful too: