Home » John Law – The First Financial Engineer – A History of Paper Money and The Mississippi Bubble financial history

John Law – The First Financial Engineer – A History of Paper Money and The Mississippi Bubble financial history

by myyachtguardian123



John Law was a Scottish monetary reformer and originator of the “Mississippi scheme” for the development of French territories in America.

After killing an adversary in a duel, he fled to Amsterdam, where he was a professional gambler and learned about banking operations. A decade later he returned to Scotland and wrote his best-known work, Money and Trade Considered, with a Proposal for Supplying the Nation with Money (available on Amazon at this link He submitted his banking reform plan to the English and Scottish parliaments, but it was rejected.

After several other rejections, Law received permission in 1716 to try his plan in France. The French government was heavily in debt as a result of the extensive wars of Louis XIV, who died in 1715; and Law’s program, which promised to reduce the public debt, held obvious appeal. With Law, however, lowering the public debt was somewhat incidental. He shared with his mercantilist contemporaries a belief that money is a creative force in economic development and that an increase in its quantity would stimulate a larger national product and would increase national power. He differed from other mercantilists in looking upon a central bank as an agency for manufacturing money in the form of bank notes that would circulate in place of gold and silver, which were scarce.

In Paris, Law founded a bank with authority to issue notes. Later he combined with his bank the Company of the West (better known as the Mississippi Company), which had exclusive privileges to develop the vast French territories in the Mississippi Valley of North America. Law’s plan worked well for a few years but ran afoul of speculative complications and political intrigue, neither of which were directly attributable to Law. As the author of the program, popularly known as the “Mississippi Bubble,” Law was responsible and was forced to flee France in 1720. He died in Venice a poor man.

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29 comments

Patrick Boyle 16/09/2021 - 12:25 Sáng

Thanks to our growing list of Patreon Sponsors and Channel Members for supporting the channel. https://www.patreon.com/PatrickBoyleOnFinance: WIlam, Robertas, Hernan Merino, Random Encounter, Nieuwsbrief Ikwil, Bee Positive Consulting, hyunjung Kim, John Cadena, Ian Tracey, A Smith, Callum McLean, Oscar, Simon Pena, Alexander E F, Cyrus Yari, Ed, Pavle Obradovic, Erik Van Ekelenburg, David O'Connor, Zak Patterson, Ki Ryu Chan, Pjotr Bekkering, Drew, Ivaylo Kunev, Alex, Robert W Proudfoot, EatEmAll, Michael Boensel, pooh shmoo, Robert Muller, Andre Michel, Ivan Iliev, Gopaljee Atulya, Milan Tomic, Mark Hooker, Artem Vasenin, P H, Mathews Sebonego, Sebastian, Michal Lacko, Shamikh Rana, Friday Guy, Marc De Mesel, Augusto Ramos, Soy Boomer Doomer, Bob Slartabartfast, Robert Feiler, Camil Dbouk, Erik Montesinos, Matthew Loos, Az Indragiri, Aman Bali, Lautaro Parada, Pratap, Deborah Joseph, Robin Sung and Kurt Johnston

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Doug Jenkins 16/09/2021 - 12:25 Sáng

Thank you for a great story. Being part of the unwashed masses I will need to view the video more than a few times to pick up all the details
Please keep up your fantastic work

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Demitrios Karagiannis 16/09/2021 - 12:25 Sáng

How do you think John Law would have viewed Bitcoin?

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Paul Proulx 16/09/2021 - 12:25 Sáng

And all the stock copy there Law's genius. 😇

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Alexus Harrison 16/09/2021 - 12:25 Sáng

Well I learned how central banks came to exist. It's a good idea in theory. In concept, it's way too easy to get in bed with the government and make hella money. It would be almost stupid not to. There's gotta be a better way

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Sam Law 16/09/2021 - 12:25 Sáng

No way, great great great great great great Grandpa is a legend

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Warrick Terry 16/09/2021 - 12:25 Sáng

2nd watching, still think this is the best and most relevant video you have done. Btw why is it the Scottish who seem to be so involved in finance history?
Oh I learned a conspiracy theory on why the Australian government wants to limit cash😉 very much worth my time!

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Markus Felchner 16/09/2021 - 12:25 Sáng

Exceptional, really great contribution, thank you! 👍👍

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Para Mocro 16/09/2021 - 12:25 Sáng

Massively interesting and well-researched. Amazing!

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Bradley Johnson 16/09/2021 - 12:25 Sáng

Great video Pat.

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Christoph Mahler 16/09/2021 - 12:25 Sáng

Comments are blocked.

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Steve H 16/09/2021 - 12:25 Sáng

This was excellent. The thoroughness was unexpected but very appreciated.

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Company Man 16/09/2021 - 12:25 Sáng

First learned about the Mississippi Bubble from "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay. Although the sources are not the most accurate from it being written in 1841, it was still an exiting read.

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Peter Thomsen 16/09/2021 - 12:25 Sáng

This is exactly what is happening now, there is no difference other than “time”.

Unbelievable that people have learned nothing from the past, but still crazy stupid!

BTW: Very excellent video, thank you 🙏

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Hot Metal Knives HMK 16/09/2021 - 12:25 Sáng

These are really high quality documentaries

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Mmathulo Sejake 16/09/2021 - 12:25 Sáng

This is the best video I've heard all year

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Antonomase Apophasis 16/09/2021 - 12:25 Sáng

Explanation of why Law could not invest in Bank of England, a lovely segue into the murder charge.

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davesy 16/09/2021 - 12:25 Sáng

Fascinating stuff.

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Kent H 16/09/2021 - 12:25 Sáng

Your channel is awesome. Keep up the good work.

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Jerome’s Bowell movements 100x longrrr 16/09/2021 - 12:25 Sáng

This sounds exactly like 2020-2021

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EyesWideOpen 16/09/2021 - 12:25 Sáng

… PERFIDIOUS ALBION STRIKES AGAIN !!

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Peter Hall 16/09/2021 - 12:25 Sáng

I love the hunchback vignette! It has all been done before if one bothers to look at history.

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Happy Puppy 16/09/2021 - 12:25 Sáng

Fantastic video. I learned a lot. Thanks ever so much from San Clemente, California.

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Dhruv Gupta 16/09/2021 - 12:25 Sáng

Patrick, thanks for all the research and such great content 🙂

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Nemesishk 16/09/2021 - 12:25 Sáng

Awesome knowledge in this video, I do like Patrick's style a lot.

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justsome guy 16/09/2021 - 12:25 Sáng

Thanks Patrick, really enjoyed this and learned a lot.

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Peter Chaloner 16/09/2021 - 12:25 Sáng

Excellent! Scotch rebellions of 1715 and 1745… how did they affect Law?

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Ray Lopez 16/09/2021 - 12:25 Sáng

John Law, founder of Modern Monetary Theory.

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YouTube Life 16/09/2021 - 12:25 Sáng

Thank you for the video. Amazing.

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