Abstract
There are many parallels between the central bankers in the USA and Europe who eventually responded to the financial crisis of 2008 with ‘quantitative easing’ and John Law, who was heavily involved in financial innovation the excesses of which produced the Mississippi boom and collapse, excesses mirrored in the rise and fall of the South Sea Bubble in Great Britain later in 1720. Law had many of the characteristics of the twenty-first-century banker in the form of a self-interested drive to enrich himself and spend the proceeds of this personal enrichment in equities, real estate, futures bets and art. But Law, like his twenty-first-century counterparts, also understood that the regulation and supply of money do matter for the real economy.
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Notes
- 1.
For a recent assessment of Alan Greenspan as Chairman of the Federal Reserve System, see Mallaby (2016).
- 2.
Matthew Parris, The Times, 18 December 2008.
- 3.
Ibid.
- 4.
Frontispiece from Arlequin Actionist, a short play by Pieter Lagendyk (Amsterdam, 1720).
- 5.
Murphy (1997, pp. 4–7).
- 6.
Bibliothèque Méjanes, Aix-en-Provence, Ms. 614. John Law’s Letter Book. Letter from Law in Venice to the Marquis de Lassay, 14 June 1721, f. 71 r.
- 7.
Gazette de la Régence, Janvier 1715–Juin 1719, ed. Le Comte de Barthélemy, Paris, 1887, translation.
- 8.
Archives Nationales Paris, V7 255. Extrait des registres du Conseil d’Etat, 15 September 1722.
- 9.
Journal du Marquis de Dangeau, Paris, 1859, XVII, pp. 295–296.
- 10.
Ibid., pp. 150, 163.
- 11.
Bibliothèque Méjanes, Aix-en-Provence, Ms. 614. Law to M de Bully, 26 February 1722, letter 135.
- 12.
Ibid.
- 13.
See also ‘John Law, Jacques Gabriel et la place Vendôme’ in Pons (1986).
- 14.
Archives Nationales Paris V7 254–258.
- 15.
Murphy (1986, pp. 88–104).
- 16.
Neal (2012, p. 53).
- 17.
Murphy (1997).
- 18.
Archives Nationales Paris, V7 254.
- 19.
Sani (1988).
- 20.
Bibliothèque Méjanes, Aix-en-Provence. Ms. 614. Letter from John Law to the Duc de Bourbon Venise le 1 Juin 1721:
Monseigneur. Le Sr Pelegrini qui a peint la galerie de la banque est presentement a Venise et s’adresse a moy pour regler ce que luy est due pour cette ouvrage.
Lorsque je l’employa il me demanda cent mille livres, je ne fis aucun marché par ecrit, mais je luy promis que si l’ouvrage etoit bien fait, il seroit content du payement.
Il a recue de moy mille livres sterlin, et neuf mille livres de France lors qu’il s’est engage avec moy, les cent mille livres valoient entre trois et quatre qu’il sera paye avec mille livres sterline de plus de ce qu’il a deja recue, et il me paroit qu’il en sera content.
Comme je ne doute pas que Mgr le Regent n’agree la proposition que j’ai eu l’honneur de luy faire touchant mes biens; par cette offre la nouvelle Compagnie des Indes deviendra proprietaire des hotels de Mazarin et de la banque; et ce sera a cette compagnie a payer au Sr Pelegrini les mille livres sterline qui luy seront dues. Cela repond meme aux intentions du Regent, qui avoit envoyé son placet aux directeurs, comme il paroit par ce placet qui est joint a ma lettre.
- 21.
Jolyn Edwards ‘John Law and his Painting Collection: Conoisseur or Dupe?’ (Goodman 2001).
- 22.
Montesquieu (1950, vol. 2, p. 776). My translation.
- 23.
Law, Oeuvres, III: 371.
- 24.
Murphy (1997, p. 216).
- 25.
Martin (2013, p. 225).
- 26.
Ibid., pp. 225–226.
- 27.
Bibliothèque Méjanes, Aix-en-Provence, Ms. 614. ff.99 v and r.
- 28.
Ibid. Letter from Law to Rosemberg, 15 May, 1722, letter 163.
- 29.
Paris, AAE CP Venise 183, fos. 90–92.
- 30.
Montesquieu (1950, vol. 2, p. 1007).
- 31.
Bibliothèque Méjanes, Aix-en-Provence, Ms. 614. Letter to M de Rosemberg, 15 May 1722, Letter 163.
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Murphy, A.E. (2018). John Law: A Twenty-First Century Banker in the Eighteenth Century?. In: Costabile, L., Neal, L. (eds) Financial Innovation and Resilience. Palgrave Studies in the History of Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-90248-7_12
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