Jeremy Bentham and Adam Smith on the usury laws: a 'Smithian' reply to Bentham and a new problem

Samuel Hollander

The European Journal of the History of Economic Thought, 1999, vol. 6, issue 4, 523-551

Abstract: Adam Smith justified the contemporary usury laws and was severely criticised by Bentham and most modern writers with the important exception of J.M. Keynes. We argue that pace Bentham, Smith did not intend to preclude loan financing of all 'risky' ventures and give a 'monopoly' to safe investments and did not neglect the potential emergence of black credit markets. Yet Smith ought to have modified his position independently of Bentham's criticism, considering a marked rise in the rate at which governments borrowed in the late 1770s.

Keywords: usury laws; Adam Smith; Jeremy Bentham; classical economics; entrepreneurship; risk (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/10427719900000042

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