---
entity_slug: market_rate_of_interest
evaluator: null
evaluated_at: '2026-02-23T05:47:57.613431'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes market rate from legal rate and
    identifies the key mechanism (supply and demand for capital). It could be slightly
    more precise about what constitutes "the marketplace" but otherwise captures a
    distinct economic concept.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This entity is directly grounded in Smith's text from Book I, Chapter
    9, where he explicitly discusses market rates versus legal rates and provides
    concrete examples from Scotland and France. The concept emerges clearly from Smith's
    actual analysis rather than being imposed from external frameworks.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Regulation" is the correct domain assignment since this concept specifically
    concerns how market forces interact with and often circumvent legal attempts to
    control interest rates. The entity sits at the intersection of market mechanisms
    and regulatory policy.'
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: This entity has moderate VSM relevance, mapping primarily to S4 (intelligence/environmental
    adaptation) as it represents how economic actors gather information about actual
    lending conditions and adapt to regulatory constraints. It also touches S3 (internal
    regulation) regarding the tension between legal and market controls.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides strong explanatory value by illuminating the mechanism
    through which market forces assert themselves despite legal restrictions, demonstrating
    a fundamental principle about the limits of price controls. It reveals structural
    relations between legal frameworks and actual economic behavior rather than merely
    naming a phenomenon.
---

# Evaluation: Market Rate Of Interest

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes market rate from legal rate and identifies the key mechanism (supply and demand for capital). It could be slightly more precise about what constitutes "the marketplace" but otherwise captures a distinct economic concept.

## source_grounding — 5.0 / 5.0

This entity is directly grounded in Smith's text from Book I, Chapter 9, where he explicitly discusses market rates versus legal rates and provides concrete examples from Scotland and France. The concept emerges clearly from Smith's actual analysis rather than being imposed from external frameworks.

## domain_placement — 5.0 / 5.0

"Regulation" is the correct domain assignment since this concept specifically concerns how market forces interact with and often circumvent legal attempts to control interest rates. The entity sits at the intersection of market mechanisms and regulatory policy.

## vsm_relevance — 3.0 / 5.0

This entity has moderate VSM relevance, mapping primarily to S4 (intelligence/environmental adaptation) as it represents how economic actors gather information about actual lending conditions and adapt to regulatory constraints. It also touches S3 (internal regulation) regarding the tension between legal and market controls.

## explanatory_value — 4.0 / 5.0

The entity provides strong explanatory value by illuminating the mechanism through which market forces assert themselves despite legal restrictions, demonstrating a fundamental principle about the limits of price controls. It reveals structural relations between legal frameworks and actual economic behavior rather than merely naming a phenomenon.
