A Lever Trades Distance for Force
A lever is a bar that pivots to move a load. Archimedes described the principle, which multiplies force at the cost of distance.
A lever is a rigid bar turning about a pivot to move a load. It multiplies force but never energy: pushing a lever ten times further to lift a load a tenth of the distance is exactly the trade being made, which is why Archimedes could claim to move the earth given a place to stand but never claimed to do it quickly. *Leverage* in finance uses the same image — a small amount of capital moving a much larger position, with the same risks a long lever brings.
- A pivoting bar. *Pull the lever.*
- To prise. *Lever the lid off.*
- Leverage — mechanical advantage. *More leverage.*
- Fulcrum — the pivot point. *The fulcrum.*
- Latin — *levare*, to raise. *The source.*
Word forms
| Form | Word | Example |
|---|---|---|
| Noun | lever | A long lever. |
| Plural | levers | Two levers. |
| Verb | lever | Lever it open. |
| Noun | leverage | Financial leverage. |
| Latin | levare | To raise. |
- He levered the crate open.Verb.
- A longer lever gives more force.Physics.
- The fund is highly leveraged.Finance.
The three classes of lever
- First class — fulcrum in the middle, as in a seesaw or crowbar
- Second class — load in the middle, as in a wheelbarrow
- Third class — effort in the middle, as in tweezers or a forearm
- All three trade distance for force or the reverse
- No lever creates energy — it only redistributes it
Old French *leveor*, a lifter, from *lever*, to raise, from Latin *levare*, from *levis*, light in weight.
Does a lever create force?
No. It multiplies force while reducing distance, so the total work done stays the same.
What is leverage in finance?
Using borrowed money so a small amount of capital controls a much larger position, magnifying both gains and losses.