Defence of Usury

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June 25, 2026

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Jeremy Bentham's Defence of Usury (1787) argues against legal restrictions on interest rates. Usury, in modern law, refers to charging an illegal rate of interest on a loan. Historically, any interest was considered usury, but this definition evolved with trade to encompass exorbitant rates.1

Bentham, influenced by Adam Smith, believed individuals are best judges of their own advantage and should be free to lend money at interest without legal hindrance. He contended that financial markets and instruments, including interest-bearing securities, are essential for separating capital control from ownership and facilitating economic activity. Bentham's work advocates for a laissez-faire approach to lending, suggesting that the market, rather than legislation, should determine interest rates.23

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Jeremy Bentham
Early life and works
…Russia that he wrote his Defence of Usury (published 1787). This, his first essay in economics, presented in the form of a series of letters from Russia, shows him as a disciple of the economist Adam Smith but one who argued that Smith did not follow the logic of his…
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…Russia that he wrote his Defence of Usury (published 1787). This, his first essay in economics, presented in the form of a series of letters from Russia, shows him as a disciple of the economist Adam Smith but one who argued that Smith did not follow the logic of his…
Read More