John Law

Book excerpt: John Law (1671-1729) left a remarkable legacy of economic concepts from a time when economic conceptualization was very much at an embryonic stage. Yet he is best known-and generally dismissed-today as a rake, duellist, and gambler. This intellectual biography offers a new approach to Law, one that shows him to have been a significant economic theorist with a vision that he attempted to implement as policy in early-eighteenth-century Europe. Law's style, marked by a clarity and use of modern terminology, stands out starkly against the turgid prose of many of his contemporaries. His vision of a monetary and financial system was certainly one of a later age, for Law believed in an economy of banknotes and credit where specie had no role to play. Ultimately Law failed as a policy-maker, in part because of the entrenchment of the financiers and their aristocratic backers and in part because of theoretical flaws in his vision. His struggle for power took place against the background of Europe's first major stock boom and collapse. The collapse of the Mississippi System, which he had conceived, and the South Sea Bubble led to a lasting impression of Law as a failure. It is this impression that Antoin Murphy seeks to dispel.