The Online Library of Liberty

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• Associate Editors
• Editorial
• Bibliographic Essay: Forrest Mcdonald, a Founding Father's Library
• Bibliographic Essay: Murray N. Rothbard, Modern Historians Confront the American Revolution
• I: Paradigms of Freedom
• Conflicting Paradigms
• Paradigms As Procrustes' Bed
• Interest and Ambition
• Thesis and Antithesis
• Freedom and Authority
• Sin and Society
• Autonomy and Authority
• Virtue and Status
• Utility and Progress
• Diversity and Equality
• II: Nonspontaneous Order
• State Vs Society
• The Therapeutic State
• Order and Elites
• Order and Virtue
• Self-perfection
• Socialism and Freedom
• Market Socialism
• Centralism Vs Decentralism
• Voluntary Servitude
• Authority and Obedience
• Social Control
• Power and Ideology
• Hegemony
• III: Spontaneous Order
• Freedom and Knowledge
• The Case For Government
• The Case Against Government
• Community Vs. State
• State and Morality
• Freedom and Creativity
• Order Without State
• IV: Individual and Social Good
• The Right to Privacy
• Autonomy and Psychiatry
• Personal Choice
• Individuals, Groups, and States
• Social Dynamics
• Social Engineering
• Individuals and Groups
• Personal Vs. Social Goods
• Individual Rationality
• Self-interest and Social Good
• Self-interest Vs. Slavery
• Art and Autonomy
• Radical Individualism
• V: Ethics, Rights, and Freedom
• Objective Values
• Natural Law
• Preambles to Freedom
• Social Sciences and Values
• Reason and Change
• Reason and Choice
• Economics and Values
• Legal Naturalism
• Justice As Restitution
• Justice As Punishment
• Rights and Contract
• Virtue In the Market
• Justice Under Capitalism
• Profits and Choice
• Social Framework and Prosperity
• Ecology and Rights
• Business' Social Ethics
• VI: Equality
• Problems With Inequality
• Equality, Power, and Values
• Unequal Income
• Equal Opportunity
• Equal Liberty
• Equality of Condition
• The Egalitarian State
• Sexual Equality
• VII: Power
• Empire, Equality, and Envy
• Imperial Presidency
• Empire and Inflation
• Watergate As a Symptom of Empire
• The Pragmatic Presidency
• “absolute Power” and Corruption
• VIII: Planning Vs. Choice
• Origins of Planning
• Bureaucratic Growth
• Prediction and Control
• Government Planning
• Government Experts
• Useless Usury Laws
• Wartime Regulation
• Government Inflation
• Neomercantilism
• Compulsory Schooling
• Planning In Nonprofit Agencies
• Private Capital and Education
• Choice and Spontaneous Order

Useless Usury Laws

Oeltjan, Jarret C.

• Florida State University, Law School

“Usury: Utilitarian or Useless.” Florida State University Law Review (USA), 3 (1975): 169–235.

Debtors pay the direct and indirect costs for complex usury statutes. To determine this, we can survey the current system of credit regulations, including the historical development of modern credit transactions, the escalated use of credit cards, and the contemporary hodgepodge of legislative and judicial exceptions to the usury laws. We can also examine the methods used to avoid usury laws.

Current usury laws constrict certain types of credit. Supporters of these regulations have often based their arguments on myopic views of society and its needs. They have devised hypothetical arguments to justify a system of ad hoc regulations detrimental to the financial and social structure. Neither the educationally and economically deprived (the supposed beneficiaries of protective or low-rate usury laws) nor those sophisticated enough to avoid the pitfalls, benefit from the present arrangements.

One can develop five models of a credit system: (1) organized inaction (a stopgap arrangement that ideally would unify all rate ceilings, rates, exceptions, and complexities into a single comprehensive statute); (2) loan sharking plus (a system that traditional usury laws have stimulated rather than restricted); (3) public utility (increased regulation would be a drastic error because of the constant tug of war between consumer groups for lower rates and industry for higher rates); (4) free market system (which opts for maximum competition); and (5) compromise (which would allow parties to agree but would give courts retentive power to declare contracts usurious if excessively harsh).

The free market model would best fit the needs of the general population. The goal should be to stimulate competition among lenders. All institutions should be free to enter and compete in the lending area with little government intervention. The present system should be revamped in the direction of the free market model.