The Man Who Invented Money

A satirical engraving showing panic in Paris following the failure of John Law’s financial scheme, 1720
A satirical engraving showing panic in Paris following the failure of John Law’s financial scheme, 1720

In 1694 a young Scotsman convicted of murder in London fled to the Continent. Two decades later he turned up in Paris, where he founded a national bank and headed a company that incorporated all of France’s overseas trading monopolies and absorbed the country’s entire national debt. The bank’s new paper notes replaced the old currency of gold and silver. The company’s stock soared extravagantly in value. The erstwhile fugitive was appointed finance minister, becoming the most powerful subject in Europe and possibly the richest man who ever lived. Daniel Defoe, a sharp observer of stock promoters (or “projectors,” as they were commonly known), expressed incredulity: in order to rise in this world,

the Case is plain, you must put on a Sword, Kill a Beau or two, get into Newgate [jail], be condemned to be hanged, break Prison, if you can,—remember that by the Way,—get over to some Strange Country, turn Stock-Jobber, set up a Mississippi Stock, bubble a Nation, and you may soon be a great Man….

Yet by the time these words were published in early 1720, the bubble was on the verge of collapse. Not long after, its creator found himself once again in exile and nearly bankrupt.

For nearly three centuries John Law, who was born in 1671 and died in 1729, has eluded biographers. The distinguished American economic historian Earl J. Hamilton reportedly spent fifty years working on a life but produced only a few papers on the Mississippi bubble. The editor of Law’s collected works, Paul Harsin, also promised and failed to deliver a scholarly biography. There have been several popular biographies—most recently Janet Gleeson’s The Moneymaker (1999)—that are rollicking reads, but all suffer from a tendency to conflate fact with legend.

The Irish historian of economic thought Antoin E. Murphy produced a detailed academic analysis of Law’s ideas and career in his biography, John Law: Economic Theorist and Policy-Maker (1997), but gave little sense of Law’s character or the times in which he lived. For years the most thorough and accessible account of this elusive Scotsman had been La Banqueroute de Law (1977) by the French politician and essayist Edgar Faure. James Buchan’s John Law: A Scottish Adventurer of the Eighteenth Century is the first English-language biography that is comprehensive, scholarly, and also readable.

One can see why the wait was so long. Little is known of Law’s early life or of his rakish sojourn in London, which ended with the young Law, then known as “Jessamy John,” killing another dandy, “Beau” Wilson, in a duel that took place in mysterious circumstances in April 1694. Law was sentenced to death but escaped from jail with help…

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