Philosophy 2074F/G Chapter Notes -Finance Capitalism, Moral Hazard, Cronyism
1 May 2013
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High leverage finance capitalism: ethical issues and potential reforms neilson. Poverty, like war, often brings out the worst in people. Schumpter analyzed how all forms of capitalism have important creative and destructive phases and that there has been no golden age of capitalism without important destructive elements. Capitalism is by nature a form of method of economic change that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. Leverage generally refers to the amount of money borrowed by an investor/;trader relative to the amount of secure capital owned or invested by the investor/trader. Leverage also can enable business investors to start and expand businesses and economic development projects with only ten to twenty percent of the cost of the investment project. Originally, hedging referred to an investment strategy designed to reduce rather than increase risk by investing some portion of investment resources in a direction relatively opposite to the main investment.
