usury laws create shortages, just like any other price control
 

http://www.mises.org/story/1977

In the last thread I started about the folly of price controls even when they're called "anti gouging" laws, there was a discussion about "loan sharking" ie. usury being a case where price controls achieve some good.

It just so happens that I ran across this article today that does a good job of explaining why usury laws are no more than just another price control that creates shortages. They are just another state intervention into private consensual transactions.

Price controls are almost always a well-meaning attempt to "help" others but the folly is that a third party simply cannot decide for me how much or how little I'm willing to buy/sell things for. You can't do it. You can only screw it up by intervening with your own judgment of what I should be paying or earning. It's a guaranteed failure that only serves to create shortages, black markets, and higher prices.

Even something like usury laws, which at first glance may even appear to be helpful, do nothing but harm the very people intended to help.

Enjoy the article.

natedogg