In Purchases essay, “Mortal Hazard,” he explains how our society runs on a system of “Moral hazard” which the author describes as: “[W]henever decision makers in risky situations reap the rewards from their decisions without bearing all of the costs.” (Purchase 1). The author explains why we continue using this defective system as well as the problem it has created with sub-prime mortgages and the energy crisis (Purchase 2). Purchase further explains that political decision-making is also flawed due to the ignorance of the voters whom vote out of emotion rather than intelligence (Purchase 3). Purchase concludes that until moral hazards are removed from society, social progress cannot be made (Purchase). Purchases main argument is that our institutions are not designed for prudent action but rather facilitate taking and deal with the negative consequences later on (Purchase 1). Purchase explains that the architecture of our decision-making focuses on privatizing …show more content…
To begin, voters are ignorant of the complex structure of public policies, thus, they focus more on the character rather than the policies (Purchase 3). Hence, why political speeches are directed to persuade the voters’ emotion rather than their intellect (Purchase 3). Secondly, the issue that candidates act opportunistically to win the next election causes politicians to pursue policy options and offer the least short-term cost or the greatest short-term benefit (Purchase 3). Consequently, politicians tend to throw tough decisions into the future, which in turn makes government incompetent in taking action unless they face a widely recognized issue (Purchase 3). Lastly, the rule that allow 3/5th of senators to force a closure and the rule that requires 2/3rd of senators to allow ratification of an international treaty means that no progress can be made in addressing global warming (Purchase