Defence of Usury [6]
for example 11 per cent, six per cent is as well adapted, as 5 per cent is to the situation of him who can make but 10; to that of him who can make 12 per cent seven and so on. So, in the case of his wanting it to save himself from a loss, (which is that which is most likely to be in view under the name of exigency) if that loss would amount to 11 per cent 6 per cent is as well adapted to his situation, as 5 per cent would be to the situation of him, who had but a loss amounting to ten per cent to save himself from by the like means. And in any case. though. in proportion to the amount of the loss, the rate of interest were even so great, as that the clear saving should not amount to more than one per cent or any fraction per cent yet so long as it amounted to any thing, he would be just so much the better for borrowing, even on such comparatively disadvantageous terms. If, instead of gain, we put any other kind of benefit or advantage -- if: instead of loss. we put any other kind of mischief or inconvenience, of equal value, the result will be the same. A man is in one of these situations, suppose, in which it would be for his advantage to borrow. But his circumstances are such, that it would not be worth any body's while to lend him, at the highest rate which it is proposed the law should allow; in short, he cannot get it at that rate. If he thought he could get it at that rate, most surely he would not give a higher: he may he trusted for that: for by the supposition he has nothing defective in his understanding. But the fact is, he cannot get it at that lower rate. At a higher rate, however he could get it: and at that rate, though higher, it would be worth his while to get it: so he judges, who has nothing to hinder him from judging right; who has every motive and every means for forming a right judgment; who has every motive and every means for informing himself of the circumstances, upon which rectitude of judgment, in the case in question, depends. The legislator, who knows nothing, nor can know any thing, of any one of all these circumstances, who knows nothing at all about the matter, comes and says to him -- "It signifies nothing; you shall not have the money: for it would be doing you a mischief to let you borrow it upon such terms." -- And this out of prudence and loving-kindness! -- There may be worse cruelty. but can there be greater folly? The folly of those who persist, as is supposed, without reason, in not taking advice, has been much expatiated upon. But the folly of those who persist, without reason, in forcing their advice upon others, has been but little dwelt upon, though it is, perhaps, the more frequent, and the more flagrant of the two. It is not often that one man is a better judge for another, than that other is for himself, even in Cases where the adviser will take the trouble to make himself master of as many of the materials for judging, as are within the reach of the person to be advised. But the legislator is not, can not be, in the possession of any one of these materials. -- What private, can be equal to such public folly? I should now speak of the enterprizing class of borrowers: those. who, when characterized by a single term, are distinguished by the unfavourable appellation of projectors: but in what I shall have to say of them, Dr Smith, I begin to foresee, will bear so material a part, that when I come to enter upon that subject, I think to take my leave of you, and address myself to him.
LETTER V Reasons for Restraint.-Protection of Simplicity.
I come, lastly, to the case of the simple. Here, in the first place, I think I am by this time entitled to observe, that no simplicity, short of absolute idiotism, can cause the individual to make a more groundless judgment, than the legislator, who, in the circumstances above stated, should pretend to confine him to any given rate of interest, would have made for him. Another consideration, equally conclusive, is, that were the legislator's judgment ever so much superior to the individual's, how weak soever that
LETTER V Reasons for Restraint.-Protection of Simplicity.
I come, lastly, to the case of the simple. Here, in the first place, I think I am by this time entitled to observe, that no simplicity, short of absolute idiotism, can cause the individual to make a more groundless judgment, than the legislator, who, in the circumstances above stated, should pretend to confine him to any given rate of interest, would have made for him. Another consideration, equally conclusive, is, that were the legislator's judgment ever so much superior to the individual's, how weak soever that