In 1720, France suffered a banking and credit crisis, and an economic meltdown, because of a bubble in its newly contrived stock market. The crisis spread through the banking and credit systems of Europe. The super-rich, who had been speculating wildly and making money through special deals with the State, war finance, and an un-monitored and un-regulated stock market, were quick to get themselves bailed out and their interests protected, but for millions the crisis meant ruin and starvation. At the center of this story, which should be strangely familiar-sounding to a reader in 2008, was the Scottish professional gambler, John Law, who became France’s “Chairman of the Fed”, as well as the creator of the infamous Mississippi Company, which was at the center of the market bubble.
People who imagine that the Neo-Conservative clichés about a “self-regulating market” originated with Adam Smith should take note. It’s a libel on Adam Smith, who never said any such thing, and would have been utterly horrified by the crackpot bullshit spouted by today’s Conservatives. The rich and dishonest have always fervently maintained that they should not be under scrutiny, or subject to laws, and they have always propounded the notion with the same pompous sanctimony. These events took place more than half a century before Smith’s work was around to be travestied and misquoted. As sane voices questioned the absurd “bull market” he generated by manipulating stocks and France’s laws, John Law lectured to them that “constraint is contrary to the principles upon which credit must be built.”
This biographer’s interpretation is rather bizarre. She is infatuated with her subject, and determined to put him in the best possible light. This is quite a stretch, since the events make it clear that he was an utterly ruthless scoundrel who caused immeasurable human suffering. But throughout the book, she insists that he was an “idealist”, and explains away all his nastiest deeds in the most implausible ways. Sounds to me like the kind of crap that gets written about Conrad Black. But despite this, the book is a window into a period in the distant past which is.…. now.
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