An engaging, enlightening biography of the Scottish financial genius Law (1671–1729), whose innovations created for 18th-century France a remarkable but evanescent economic boom.
Gleeson (The Arcanum, 1999) is a storyteller with uncommon gifts: here he unsnarls the complicated tale of a complex man who revolutionized the way people think about money. The son of a prominent goldsmith in Edinburgh, Law showed early promise in fencing and tennis—but most notable were his formidable mathematical talents, which enabled him to profit substantially from a variety of games of chance. In 1694, however, he killed the son of a powerful London family in a duel and soon found himself convicted of murder and sentenced to hang. Friends arranged for his escape, and he crossed the Channel to the Continent, where he began life anew. In Genoa, he eloped with another man’s wife. In the Hague, he befriended a nephew of Louis XIV—a connection that would eventually result in his rise to the top of the French financial bureaucracy and make him “the richest subject in Europe.” With lucent wit, Gleeson chronicles Law’s rise and fall. Most intriguing are her accounts of his creation of the Mississippi Company, a stock venture that generated one of history’s greatest boom-and-bust stories. Law, who had already convinced the French government to begin issuing paper money (to compensate for the critical shortage of coins and precious metal), sold shares in France’s holdings in America. Soon people from all walks of life made enormous fortunes as the price of the stock skyrocketed (occasioning a new word—“millionaire”). But all collapsed when word spread that no large deposits of gold or silver had been found in the New World. During one of the ensuing “runs” on the banks, a dozen people died, trampled underfoot by the stampede of fearful depositors eager to reclaim their investments. Law, his life at risk, fled the country in disgrace and died broke in Venice.
A brilliant cautionary tale whose relevance to the volatile economies of today is remarkable—and alarming.