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John Law baptised 21 April — 21 March was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself and that national wealth depended on trade. He was appointed Controller General of Finances of France under the Duke of Orleansregent for the youthful king, Louis XV. He was responsible for the Mississippi Company bubble and a chaotic economic collapse in France, which has been compared to the earlyth century tulip mania in Holland.

Law was a gambler and a brilliant mental calculator.

He was known to win card games by mentally calculating the odds. He originated economic ideas such as "The Scarcity Theory of Value" and the " real bills doctrine ".

Law's views held that money creation will stimulate the economy, that paper money is preferable to metallic money, and that shares are a superior form of money since they pay dividends.

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Law was born into a family of bankers and goldsmiths from Fife ; his father, William, had purchased Lauriston Castlea landed estate at Cramond on the Firth of Forth and was known as Law of Lauriston.

Law joined the family business at age fourteen and studied the banking business until his father died in Law subsequently neglected the firm in favour of more extravagant pursuits and travelled to London to live the "British Dandy " lifestyle.

He subsequently lost large sums of money in gambling. On 9 AprilJohn Law fought a duel with another British DandyEdward "Beau" Wilson in Bloomsbury Square in London. Law killed Wilson with a single pass and thrust of his sword. Wilson's brother appealed and had Law imprisoned, but he managed to escape to Amsterdam. Law urged the establishment of a national bank to create and increase instruments of credit and the issue of banknotes backed by land, gold, or silver.

The first manifestation of Law's system came when he had returned to Scotland and contributed to the debates leading to the Treaty of Union He published a text entitled Money and Trade Considered: He spent ten years moving between France and the Netherlandsdealing in financial speculations.

Problems with the French economy presented the opportunity to put his system into practice. He had the idea of abolishing minor monopolies and private farming of taxes.

He would create a bank for national finance and a state company for commerce, ultimately to exclude all private revenue. This would create a huge monopoly of finance and trade run by the state, and its profits would pay off the national debt.

The council called to consider Law's proposal, including financiers such as Samuel Bernardrejected the proposition on 24 October Law made his home in Place Louis-le-Grand, a royal square where he could host and entertain various Parisian nobles.

Gaining the attention of such notable people as the Duke of Orleans, Law quickly found himself a regular in high-stakes gambling parties attended by only the most affluent of Paris.

His tall stature and elegant dress allowed Law to charm his way across Europe's financial hubs, ranging from Amsterdam to Venice. These travels heavily influenced Law's theories on monetary policies and the importance of paper money as credit.

Law's idea of a centralized bank which would deal in a new form of paper money was years ahead of its time. Despite this forward concept, Law still championed mercantilist beliefs with the promotion of monopolistic companies through government charters.

The wars waged by Louis XIV left the country completely wasted, both economically and financially. The resultant shortage of precious metals led to a shortage of coins in circulation, which in turn limited the production of new coins.

With the death of Louis Binary option volatility seventeen months after Law's arrival, the Duke centralized futures trading host Orleans finally presented Law with the opportunity to showcase his ingenuity.

On May 1,Law presented a modified version of his centralized bank plan to the Banque Generale which approved a private bank that allowed investors to supply one-fourth of an investment in currency and the other parts in defunct government bonds. The second key feature of the proposal centered on the premise that this private bank was able to issue its own currency backed by Louis of gold.

This enabled the currency to be redeemed by the weight of silver from the original deposit instead of the fluctuation of livres which had been devaluing rapidly. The foundation of the Mississippi Company, which was later renamed the Occident Company and eventually became a part of the Company of the Indies, was financed in the same way as the bank. The rapid ascension of this new global monopoly led to massive speculation and stock prices ballooned to over sixty times their original value.

As Controller General, Law instituted many beneficial reforms some of which had lasting effect, others of which were soon abolished. Since, following the devastating War of the Spanish SuccessionFrance's economy was stagnant and her national debt was crippling, Law proposed to stimulate industry by replacing gold with paper credit and then increasing the supply of credit, and to reduce the national debt by replacing it with avis broker hotforex in economic ventures.

Inthe French government allowed Law to issue 50, new shares in the Mississippi Company at livres with just 75 livres down and the rest due in nineteen additional monthly payments of 25 livres each. The share price rose to 1, livres before the second installment was even due, and ordinary citizens flocked to Paris to participate. Based on this success, Law offered to pay off the national debt of 1. By mid, the Mississippi Company had issued more thanshares and the par value of the company stood at million livres.

That summer, the share price skyrocketed from 1, to 5, livres and it continued to rise through year-end, ultimately reaching dizzying heights of 15, livres per share.

The word millionaire was make money ezine articles used, and in January Law was appointed Controller General.

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The spillover to the economy was immediate and most notable in food prices. By May 21Law was forced to deflate binary trading no minimum deposit value of banknotes and cut the stock price.

As the public rushed to convert banknotes to coin, Law was forced to close Banque Generale for ten days, then limit the transaction size once the bank reopened. But the queues grew longer, the Mississippi Company stock price continued to fall, and food prices soared by as much as 60 percent. The fractional reserve ratio was one fifth, [15] and a Royal edict to criminalise the sale of gold was decreed.

Forex vladimir ribakov gave way to panic as people flooded the market with future shares trading as high as fifteen thousand livres per share, while the shares themselves maintained at ten thousand livres each.

The rush to convert paper money to coins led to sporadic bank hours and riots. Squatters now occupied the square of Palace Louis-le-Grand and openly attacked the financiers that inhabited the area. It was under these circumstances and the guise of night that John Law fled Paris some seven months later.

The meteoric rise of a relatively unknown man came as fast as his descent as an economic power vacuum was left in the wake. Law's theories live on years later and "captured many key conceptual points which are very much a part of modern monetary theorizing". Law initially moved to Brussels in impoverished circumstances. He spent the next few years gambling in Rome, Copenhagen and Venice but never regained his former prosperity. He lived in London for four years and then moved to Venice where he contracted pneumonia and died a poor man in Sharon Condie and Richard Condie 's National Film Board of Canada NFB animated short John Law and the Mississippi Bubble is a humorous interpretation.

The film was produced by the NFB at its newly opened Winnipeg studio. It opened in Canadian cinemas starting in September and was sold to international broadcasters.

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The film received an award at the Tampere Film Festival. From Wikipedia, the free encyclopedia. John Law John Law, by Casimir Balthazar.

Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. Office of the National Illustrated Library. Letters to John Law. Money and Trade Consider'd with a Proposal for Supplying the Nation with Money, First Published in Edinburgh in Retrieved 26 June An inquiry into the meaning of money.

A Voyage through the Worlds of the Slave Trade. The Madness of Crowds". National Film Board of Canada. Retrieved 22 June Finance Ministers of France list. Pleven Diethelm de Murville France. Fabius Mer Sarkozy Gaymard Breton Borloo Lagarde Baroin Moscovici Sapin Le Maire. Authority control WorldCat Identities VIAF: Retrieved from " https: Pages using ISBN magic links Use dmy dates from May Wikipedia articles incorporating a citation from the Encyclopaedia Britannica with Wikisource reference Wikipedia articles incorporating citation to the NSRW Wikipedia articles incorporating citation to the NSRW with an wstitle parameter Wikipedia articles with VIAF identifiers Wikipedia articles with LCCN identifiers Wikipedia articles with ISNI identifiers Wikipedia articles with GND identifiers Wikipedia articles with BNF identifiers Wikipedia articles with BIBSYS identifiers.

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