John Law (economist)

About John Law (economist)

John Law (pronounced [lɑs] in French in the traditional approximation of Laws, the colloquial Scottish form of the name; 21 April 1671 – 21 March 1729) was a Scottish-French economist and financier. He rose to power in France where he created a novel financial scheme for French public finances known as Law's System (French: le système de Law) with two institutions at its core, John Law's Bank and John Law's Company (also known as the Mississippi company), ending in the devastating boom and bust "Mississippi Bubble" of 1720. Born in Scotland, Law was an accomplished gambler with an interest in the rules of probability. After killing a man in a duel and being sentenced to death, he fled to mainland Europe. He read economics and made the acquaintance of Philippe II, Duke of Orléans, who became regent for the juvenile Louis XV in 1715. In 1716 Philippe approved Law's plan to create a private bank which would take gold deposits in return for bank notes, loaning out the gold. It was structured as a joint-stock company and was bought by the French government in 1718, becoming the Banque royale.