---
entity_slug: legal_rate_of_interest
evaluator: null
evaluated_at: '2026-02-23T05:41:00.445616'
overall_score: 4.4
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes legal interest rates as statutory
    maximums that regulate lending, with specific historical examples showing the
    evolution from 10% to 5%. The concept is well-bounded and avoids circularity,
    though it could be slightly more precise about enforcement mechanisms.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This entity is directly grounded in Smith's detailed historical analysis
    in Book I, Chapter 9, where he explicitly discusses the progression of legal interest
    rate statutes from Edward VI through Queen Anne. The examples and timeline provided
    match Smith's actual text closely.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Regulation" is the correct domain assignment, as legal interest rates
    represent government intervention in market mechanisms through statutory controls.
    This clearly falls under regulatory policy rather than pure market operations
    or monetary theory.'
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity maps well to S3 (internal regulation/audit) as it represents
    the regulatory system's attempt to control and monitor lending practices within
    the economic system. It also has some S2 coordination aspects in dampening market
    oscillations.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity illuminates an important regulatory mechanism and Smith's
    insight that effective regulation follows rather than leads market conditions.
    It demonstrates the relationship between statutory controls and market dynamics,
    providing genuine analytical value beyond mere description.
---

# Evaluation: Legal Rate Of Interest

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes legal interest rates as statutory maximums that regulate lending, with specific historical examples showing the evolution from 10% to 5%. The concept is well-bounded and avoids circularity, though it could be slightly more precise about enforcement mechanisms.

## source_grounding — 5.0 / 5.0

This entity is directly grounded in Smith's detailed historical analysis in Book I, Chapter 9, where he explicitly discusses the progression of legal interest rate statutes from Edward VI through Queen Anne. The examples and timeline provided match Smith's actual text closely.

## domain_placement — 5.0 / 5.0

"Regulation" is the correct domain assignment, as legal interest rates represent government intervention in market mechanisms through statutory controls. This clearly falls under regulatory policy rather than pure market operations or monetary theory.

## vsm_relevance — 4.0 / 5.0

This entity maps well to S3 (internal regulation/audit) as it represents the regulatory system's attempt to control and monitor lending practices within the economic system. It also has some S2 coordination aspects in dampening market oscillations.

## explanatory_value — 4.0 / 5.0

The entity illuminates an important regulatory mechanism and Smith's insight that effective regulation follows rather than leads market conditions. It demonstrates the relationship between statutory controls and market dynamics, providing genuine analytical value beyond mere description.
