JOB PAPER
Adam Smith, Jeremy Bentham, and Usury Laws: “Projectors” Reconsidered in their Eighteenth-Century Context
Abstract
Scholarship dates the defeat of economic arguments supporting usury laws in Britain to the publication of Jeremy Bentham’s “In Defense of Usury” in 1787 where Bentham employs Adam Smith’s own language and reasoning in the Wealth of Nations against him. While doing so, Bentham defines the “projector”, a major source of economic hardship for Smith, as an entrepreneur. This paper reconsiders Bentham’s definition in context from the word’s origin in 17th century France to contemporary usage by philosophers, in publications, and by Smith himself. Such context reveals Bentham’s definition of “projector qua entrepreneur” to be anachronistic and suggests a new reading of Adam Smith’s support for usury laws: the 18th century British projector was an undercapitalized designer of large-scale investments either explicitly or tacitly allied to powerful aristocratic interests who, in the likely event of failure, used his alliances to protect his own personal wealth; Adam Smith’s argument for usury laws amounts to credit rationing away from these individuals, preventing circumstances where investments became Too Connected to Fail.
DISSERTATION
Chapter 1:
Adam Smith, Jeremy Bentham, and Usury Laws: “Projectors” Reconsidered in their Eighteenth-Century Context
Chapter 2:
Non-binding Usury Laws as Prudential Credit-rationing
Abstract
The effects of price ceilings are most commonly discussed when that ceiling is below the prevailing market price. This paper addresses the theoretical consequences of non-binding interest rate ceilings on investment outcomes with non-uniform distributions of quality debtors.
Chapter 3:
Entangled Political Economy in Failed Eighteenth Century British Investment Projects: Case Studies
Abstract
This paper considers the relationship between British nationalization of private debts and the political connectedness of the debtors. The cases considered are the response to the Ayr Bank failure; the construction of canals; and the nationalization of the British East India Company.
PRESENTATIONS
Projectors as Men of System: Adam Smith's Advocacy for Usury Laws
Presented at the International Adam Smith Society conference, Glasgow, July 2015
Adam Smith, Jeremy Bentham, and Usury Laws: “Projectors” Reconsidered in their Eighteenth-Century Context
Abstract
Scholarship dates the defeat of economic arguments supporting usury laws in Britain to the publication of Jeremy Bentham’s “In Defense of Usury” in 1787 where Bentham employs Adam Smith’s own language and reasoning in the Wealth of Nations against him. While doing so, Bentham defines the “projector”, a major source of economic hardship for Smith, as an entrepreneur. This paper reconsiders Bentham’s definition in context from the word’s origin in 17th century France to contemporary usage by philosophers, in publications, and by Smith himself. Such context reveals Bentham’s definition of “projector qua entrepreneur” to be anachronistic and suggests a new reading of Adam Smith’s support for usury laws: the 18th century British projector was an undercapitalized designer of large-scale investments either explicitly or tacitly allied to powerful aristocratic interests who, in the likely event of failure, used his alliances to protect his own personal wealth; Adam Smith’s argument for usury laws amounts to credit rationing away from these individuals, preventing circumstances where investments became Too Connected to Fail.
DISSERTATION
Chapter 1:
Adam Smith, Jeremy Bentham, and Usury Laws: “Projectors” Reconsidered in their Eighteenth-Century Context
Chapter 2:
Non-binding Usury Laws as Prudential Credit-rationing
Abstract
The effects of price ceilings are most commonly discussed when that ceiling is below the prevailing market price. This paper addresses the theoretical consequences of non-binding interest rate ceilings on investment outcomes with non-uniform distributions of quality debtors.
Chapter 3:
Entangled Political Economy in Failed Eighteenth Century British Investment Projects: Case Studies
Abstract
This paper considers the relationship between British nationalization of private debts and the political connectedness of the debtors. The cases considered are the response to the Ayr Bank failure; the construction of canals; and the nationalization of the British East India Company.
PRESENTATIONS
Projectors as Men of System: Adam Smith's Advocacy for Usury Laws
Presented at the International Adam Smith Society conference, Glasgow, July 2015
