I still have my doubts about the morality of short selling. You can only practice short selling in the finance economy. Try doing it with cars, appliances and other assets.............see what happens.
Not true. Think commodity futures! Short-selling exists where there is sufficient suply of units that can be treated as of identical quality/usability over prolonged period of time. This applies to equity stocks.. but it also applies to iron ore and pig bellies. It doesn't applie to home appliances or cars because manufacturers can't be arsed to keep making the same less than popular model for decades to come.
my thoughts are that shorting should be kept to derivative, if you want to bet on something going down have at it, but you should not be able to directly effect prices by selling something you don't own
Definately options, ETF's, mutual funds. Derivatives were used to eliminate risk. Forwards and futures do this. Forwards the direct relationship with other companies and futures liquidate the market. Option are not necessary, due to the right but not obligation they actually create more problems than they create. short selling isn't actually a derivative, unless it is levered.