John Law
John Law was a Scottish gambler and economist who ran France's finances, invented a modern paper-money system, and destroyed it within four years. Born in Edinburgh in 1671 to a goldsmith and banker, he inherited the family estate at sixteen, moved to London, and gambled it away. In 1694 he killed a man in a duel over a woman, was convicted of murder, and escaped from prison to the continent. He spent a decade travelling European cities, gambling successfully by calculating odds, and studying banking in Amsterdam and Venice. He published Money and Trade Considered in 1705, arguing that a shortage of coin restricted commerce and that a state bank issuing paper backed by land could expand trade — a genuine anticipation of later monetary theory. Louis XIV died in 1715 leaving France effectively bankrupt from decades of war. The Regent, Philippe d'Orléans, gave Law his chance. He founded the Banque Générale in 1716, which issued notes and worked well. He then acquired the Mississippi Company, holding the trading monopoly for French Louisiana, and progressively merged into it the other trading companies, the mint, and the tax farms, and finally the entire royal debt — converting government bonds into company shares. The bank was nationalised in 1718 and printed notes to buy shares. The price rose from about 500 livres to 10,000 by late 1719, and the word millionaire was coined for the speculators in the rue Quincampoix. The company's actual Louisiana revenues were negligible. Confidence broke in 1720, the notes became worthless, and Law fled. He died poor in Venice in 1729, and France distrusted banks for a century.
- Lived: 1671 CE – 1729 CE
- Nationality: Scottish
- Roles: economist, banker
